The most exciting market for any eCommerce retailer out there has got to be Asia by a long way.
Throughout 2019, we’ve seen some huge sales events, the most rapid growth in internet and mobile use, and all the potential for it to get even bigger come 2020.
Across the entire continent, there’s been a dramatic growth in the number of people getting plugged into the digital marketplace, with well over 2 billion people using the internet regularly.
The number of smartphone users in the continent, while sitting behind with 1.5 billion users, it’s forecasted to reach 62% of the entire population by 2025.
So with 2019 coming to a close, we take a look at some of the big trends taking place in the eCommerce world of Asia. While it would be challenging for us to dig into each of these countries right here, we’ll be taking a look at just some that have been showing dramatic growth over this year alone.
Popular eCommerce platforms:
Alibaba – 785 million MAUs
TaoBao – 666 Million MAUs
Tmall Global – 600million MAUs
Out of all the regions to talk about, China is the single largest market when it comes to eCommerce in every metric.
With a population of over 1.4 billion, China has transitioned to become a retail economy over the past few years with a great deal of success.
In 2018, China’s internet penetration rate hit a spectacular milestone, reaching nearly 60% of people in the country, which translated 804 million, almost three times the size of America’s internet-using population.
Businesses looking to enter this area of the world needs to bear in mind this one thing – as a market, it’s big, is powerful, and it’s digital.
To really thrive, your business needs to have the ability to appeal to a market that regularly uses mobile and a wide array of payments through super-apps like WeChat Pay and AliPay as examples.
With hundreds of millions of potential customers, your platform also needs to have the power to scale to meet demand.
The big Opportunities
It would be remiss not to discuss the vast potential that 5G technology presents for Chinese consumers and eCommerce businesses looking to enter the country.
With such a massive proportion of its population already online, the race to implement 5G would see this same consumer-base spike at an unprecedented rate.
With so much of the market being online and mobile, having 5G available will provide businesses with the ability to make use of immersive marketing tools like Augmented and Virtual Reality to appeal to consumers.
Innovations – Voice Command and Immersive Reality
Along with the growing accessibility of eCommerce to the public, and the increasing costs attached to having a brick and mortar store, immersive techs like Augmented/Virtual Reality and Voice Commands will see an increase in popularity.
Virtual & Augmented Reality
While digital businesses don’t have the luxury of space like brick and mortar retail does, Virtual and Augmented Reality have steadily been closing the distance between the two, providing customers with a more profound feeling of immersion in the process.
For customers, merely having these features will endear your brand to them – with 61% of them having a preference towards those businesses that offer either or both.
So what do they allow businesses to do? For starters, they allow customers to find out whether certain products would fit in specific sizes, and even if furniture would suit a particular room.
Businesses are more than aware of the appeal of these kinds of innovations – with more than 46% of them seeking to implement Virtual/Augmented Reality at some point in 2020.
Even over this year, more than 49% of consumers in China have used (or continue to use) voice commands when making purchases online.
Global interest in ‘smart speakers’ in general underwent some severe growth in 2018 alone, and the Chinese market makes up one of, if not the biggest consumer of them.
Businesses looking to get ensconced in this region should consider providing accessibility for users that are becoming used to having voice commerce as a standard come 2020.
The Big Market Shares of eCommerce:
Fashion and Beauty – $246bn (up 23%), Travel & Accommodation – $159bn (up 17%) and Electronics & Physical Media – $136bn (up 17%)
Shopee – 34.9m MAUs
Lazada – 44.9m MAUs
HIB – 2.3m MAUs
While the population of Thailand is a small percentage compared to China – 69 million in fact – eCommerce lends more than 2.7% to the overall GDP of the Thai economy, making it a substantial and growing piece.
While it’s only a small number of areas in the country that are urbanized, more than half of its population is online and online regularly, and have more mobile/smartphones than people (92.3 million).
Very much like China, there is a growing interest in Voice commands in retail, with 45% of the digital population making frequent use of them for exploring the internet, and buying products online.
The Big Opportunities
Even though Thailand has only just crossed the 57% range in the number of users online, the government is taking steps to expand coverage and support for all of its citizens and businesses.
The project itself involves providing greater ease of implementation for those looking to digitalise their payments while adding and strengthening the coverage of internet across the country and for its closest neighbours (Laos & Cambodia) as a result.
This means that Thailand is on the verge of a digital renaissance in terms of its online marketplace, with more consumers being able to get online and shop.
Digital Payments are Taking the Lead
When considering the most popular payment methods in Thailand, it’s much more of a mixed bag, according to research both by JP Morgan and PaymentWall.
JP Morgan, for example, demonstrated that eCommerce payment methods were much more of a close race between bank cards (credit & debit), bank transfers and mobile payments.
The Big Market Shares of eCommerce
Travel including Accommodation – $4.1bn (up 28%), Electronics and Physical Media – $1bn (up 24%) & Fashion and Beauty – $908m (17%).
Shopee – 41 million MAUs
Tiki – 35 million MAUs
Lazada – 34 million MAUs
For a country of 95 million, it’s surprising to see that eCommerce has such a small penetration rate in 2019; 1.9%, in fact.
Just what makes it clear that it has some growing to do is that, even with an internet penetration rate in the 60% range, more than 4% of its GDP is contributed by the internet economy.
But with opportunities come challenges, as this eCommerce penetration rate highlights the fact that over two-thirds of the population is unbanked.
The Big Opportunities
Vietnam Jet-Setting for Digital Travel
Compared to its contemporaries in S.E.Asia, Vietnam’s eCommerce market is in a state of underperformance; with an overall growth of 16.8% over 2019.
But while this is a potential blow for those in the eCommerce space, Vietnam’s digital travel industry picks up the slack, and that’s not essentially surprising. Tourism, both to and from Vietnam, contributes more than 6% to the country’s GDP.
In 2020, the country expects to see the coming and going of over 20 million tourists, and a three-fold increase in the value of this sector by 2025.
The big challenge comes from just how Vietnam will be able to not only work with local regions to plug their SMEs and population into this digital marketplace. But also how it plans to really ‘capture’ this highly digital, international pool of travellers and tourists.
Businesses that can really take on an omnichannel approach towards advertising online and on social media will be able to capitalize on this booming sector.
These figures are all helped along by government initiatives set out in order to really lower the barriers to entry for international tourists.
Ultimately, what this means is a focus on internet connectivity, flexibility when it comes to payment gateways, especially international ones, and big incentives for the government and small businesses to collaborate.
Banking the Unbanked
Having previously discussed the unbanked population in Vietnam, it’s a demographic issue that cuts across consumer and business lines.
With consumers in Vietnam lacking daily access to a broader framework of financial services. Meanwhile, small and medium enterprises (SME’s) struggle to accept this new wave of digital payments.
With 72% of the population carrying smartphones, and a further 43% using some kind of computer, there’s a clear path for Fintech’s and eCommerce businesses to go down.
Vietnam has already made some major progress in this regard, referring back to the split between Credit, Debit and Mobile payments, the cards are stacked in favour of mobile.
The Big Market Shares of eCommerce
Travel and Accommodation – $3.49bn (Up 16%)
Electronics and Physical Media – $610m (Up 27%)
Fashion and Beauty – $558m (Up 25%)