Compared to any other market globally, Asia has undergone the most rapid expansion as an economic bloc and region for consumers. This growth is especially true for the world of eCommerce. If we look over the past decade, we see just how this continent has managed to leap over more established markets like the U.S. and Europe with ease.
Even with the financial uncertainties, the Asian eCommerce market is valued at $1.36trn, growing from $735bn in 2017. Looking back, and forward shows that this is a continent on the rapid ascent that will continue for years to come. Come 2024, and Asia is a market that has overtaken any other continent, with a $1.9trn value. To put that into perspective, Asia would be four times the size of either Europe or America.
But what accounts for this growth? The increasing accessibility to the internet and the rise of smartphones has been fuelling it for some time. Following along the eCommerce market’s rapid expansion are the number of customers accessing the internet or browsing via their smartphone.
Even with this rapid expansion throughout the Asian continent, eCommerce businesses have their eyes worldwide, especially Europe and Latin America.
Eyes on Europe
Asian eCommerce brands and platforms have been steadily, and successfully, entering the European market for some time, which is no surprise. As a continent, Europe is one with a populous customer base with easy access to the internet and a growing love of smartphones.
It makes perfect sense, then, how companies like AliExpress, Alibaba’s B2C eCommerce arm, could quickly delve into Europe. This expansion is what we’ve seen over 2018-now.
For any business seeking out expansion into Europe, providing ready access to popular European payment methods like Bancontact, Paypal, Sofort, and SEPA is essential for encouraging customers onto your platform from more local competitors.
Asian eCommerce companies with a keen interest in reaching European consumers should have the power of ‘mCommerce,’ along with AliExpress’ open-door approach towards products and payments to really succeed.
Super-apps and mCommerce
One of the secrets to Asia’s eCommerce expansion comes from the super-apps that fuel it. The importance of smartphone penetration can’t be understated in Asia. Looking back to the success of Singles Day (11.11) and 12.12 have shown how numerous and fast-acting mobile shoppers are.
Companies and apps like AliPay and WeChat Pay have managed to both capitalize on this growth within Asia, while becoming so influential as to branch out to continents like Asia with ease. At the heart of that is intuitiveness and rapidity, something that digital/mobile payments support.
Ever since launching its payment solution, WeChat has rapidly expanded into the European market with ease. According to UKTechNews, WeChat Pay saw its adoption rate by European merchants grow by 350% in 2019.
Europe is very similar to Asia in its rapid embrace of smartphones and digital payments. This trend is why we see countries across Europe rapidly introducing new domestic, digital payment methods, something that companies like AliExpress are acutely aware of.
Collaboration with local payment methods on the continent is the name of the game, and AliExpress is a solid example of that, having been working with local providers to increase its scope for APMs and payment types, which now includes installments.
Mobile Commerce, or ‘mCommerce,’ is the key in-road that Asian eCommerce businesses can use to set themselves apart. Having that ready accessibility already established in Asia translates perfectly to a continent like Europe. Being a tech-savvy continent of time-poor customers, Asian eCommerce platforms like AliExpress and their emphasis on the digital space proves the best way to go.
‘mCommerce’ is on the turbulent rise, and any Asian business vying to join up these two continents will need to keep that, and the need for payment plurality to succeed.
In addition to this, eCommerce businesses like Alibaba emphasize a two-way relationship for European and Asian customers.
An Open Door for Europe and Asia
For AliExpress, the intention was to create an open door for Asian and European consumers. The company provides a powerful platform for European brands and businesses to enter Asia. David Lloyd, Alibaba’s Managing Director for the U.K. and Nordics, explained how the company planned to function for European and Asian shoppers.
“What we’d like for them to do is turn on Alipay and see that through Heathrow, and different parts of London and the U.K., you can use Alipay. Harrods, Selfridges, the Body Shop are all accepting Alipay today.”
While Lloyd points to the success of this approach in empowering Asian shoppers with high-end European brands, it enables these same brands to effortlessly enter the online carts of consumers across the Asian continent.
This open-door approach pays dividends for super-apps like WeChat Pay, Alibaba, and AliExpress thanks to both this understanding of the European consumer, and eagerness to open the door wide for businesses on both continents.
As one of the emerging markets for eCommerce, Latin America is similar to Asia in that it has a lot of growth still to come. Right now, Latin America’s eCommerce sector was valued at over $70bn in 2019. But because its internet and smartphone penetration rates are still in their nascent stages, as they grow, this market is poised to hit $83.6bn this year before reaching $116bn by 2023/4.
With so much potential, Asian eCommerce businesses are seizing the initiative to support this emerging market, which we’re seeing carry some big benefits for those that ventured in.
Among some of the most popular eCommerce sites in Latin America, Asian eCommerce companies like AliExpress are in the top 5. But why? By taking an alternative angle to LATAM and ensuring its goods get to where they’re wanted.
Middle-Man, not Competitor
Companies like AliExpress and Alibaba have emerged in major growth markets like Chile, Argentina, and Brazil by taking an alternative approach – not competing.
In contrast with Amazon, which establishes itself as a direct competitor to local, AliExpress and Alibaba provide a platform from which local businesses can shop and sell. Alibaba’s president – Mike Evans – encapsulates this approach as “Where Amazon builds moats, Alibaba builds bridges.”
The net positive for this is two-fold. Customers will be able to easily find and buy from brands they easily recognize while being presented with other retailers’ world. The other being that customers would be able to browse, shop, and pay using the domestic payment methods they’re comfortable using.
Much like its approach in Europe and Asia, AliExpress provides an open platform for retailers and payment methods. With its platform’s launch in 2014, AliExpress continues to add locally accepted APMs for its customers in LATAM. To date, these include OXXO, Boleto, and Mercado Pago.
What AliExpress demonstrates with this building bridges approach is that having a broad scope of local payments is just as important as carrying locally-known brands. Asian brands looking at expansion to Latin America need to consider how consumers in this dynamic continent make payments.
This understanding of local spending trends and behaviors will win eCommerce platforms the longer-term loyalty of customers here.
For Latin America and Europe, platforms like AliExpress have invested heavily in creating a brand-neutral platform, while also streamlining shipping. In both of these continents, Asian eCommerce platforms are working with and building up strong supply chains. AliExpress, for example, has invested in building up distribution centers in both Brazil and Belgium.
The result of this is that customers can easily find global brands complete with fast, local shipping no matter where they are in the world.
Browsing, Shipping, Shopping, and Payments Need to be Global
We’ve seen from Asian eCommerce over the past few years has been considerable attention to details. These, of course, is in understanding what consumers across the world value in their go-to stores. In Europe and Latin America, these take the shape of global variety, accessibility of shipping, and flexibility when users prefer to shop via mobile.
More important than all of this is the need for a truly global payment solution. One can provide the same kind of bridge for customers to pay for products the way they want. This is something that Unlimint is proud to offer for companies across the world.
Consumers in continents like Latin America and Europe operate very differently. Whether that’s in where or how they shop, to how they reliably pay, both require very different approaches. As we’ve seen for both continents, the rise of digital and mobile payments is happening. With Europe, countries embrace their own locally-accepted methods, while mobile/online banking in Latin America continues to grow.
With thousands of internationally and locally accepted payment methods, Unlimint’s API provides the perfect balance of flexibility for payments, coupled with the ever-pressing need for trust and security when shopping online.
We have always been a firm advocate for flexibility when it comes to payments. It’s for that reason that we’re proud to boast services like recurring and installment payments. Through our streamlined, all-in-one API, your customers can set up manageable, 0% interest installment payments over 3, 6, and 12-month increments.
Take the first step toward a truly global business with Unlimint. Visit us here to get started: https://www.unlimint.com/contacts/