The value of e-commerce in APAC is predicted to reach $3.5 trillion in 2021 by eMarketer. To help clarify how international marketers can take advantage of the high-growth opportunity this region offers brands the world over, Rakuten Marketing has released its report: The State of e-Commerce: Asia-Pacific.
This report – which examines consumer behaviours, preferences and interests related to online shopping – analyses the results of a survey of 7,000 consumers based in Australia, China, Hong Kong, Malaysia, New Zealand, Singapore and South Korea. Here, we share just four of the key insights unveiled by this report, designed to help brands expand effectively across APAC.
Heading to PI LIVE 2018 and interested in finding out more about engaging consumers and driving growth in APAC? Don’t miss our presentation with Cult Beauty on Monday, 14:50 GMT at the Main Stage.
1. APAC offers the world’s largest e-Commerce opportunity
The potential for expansion that APAC offers international brands is huge. With e-Commerce predicted to grow from $1.8 trillion in 2018 to $3.5 trillion in 2021, the region offers the largest opportunity for digital expansion in the world.
Looking at the region as a whole, fashion is the most popular category for consumers in APAC. For women’s fashion and beauty brands, countries such as Singapore, Malaysia and South Korea provide opportunity, with between 9% and 10% of total online expenditure being spent in each of these categories. Furthermore, the report shows that when consumers in APAC shop internationally, it’s because they believe international brands offer a better product selection and a more innovative product line. Both these facts help clarify the opportunity for the UK and European brands.
2. Cross-channel & cross-device customer-centric marketing is essential
Across the seven APAC countries included in the report, the vast majority of consumers shop both online and offline. China has the highest proportion of online/offline shoppers, with 95% of Chinese respondents saying they shop both on the internet and in-store. Interestingly, Australia and New Zealand have the lowest proportion of online/offline shoppers – although these shoppers still make up 78% of the population.
Providing a consistent experience across devices is also essential in APAC, with mobile transactions outpacing desktop within most markets in APAC. Again, it is China that leads the way, with m-commerce sales predicted to hit $2 trillion by 2020.
The demand for a smooth cross-channel, cross-device experience is no surprise – it’s a well-documented trend – but it is particularly advanced in APAC. And yet recent research reveals that the biggest challenge marketers in APAC face are measuring and justifying their ad spend investments in integrated campaigns: 82% agree it’s difficult to assess how well brands perform across channels.
Anthony Capano, Rakuten Marketing managing director, Europe, contests this, particularly for international brands looking to expand into APAC.
“Whilst it is true that being in a new territory working with new partners may require a more focused effort – the possibilities to track performance are there. So, there isn’t really an excuse not to be exercising similar practices that brands are used to in western markets,” he said.
3. From reluctant online shoppers in AU, to mobile pioneers in China – each country in the region requires a distinct approach
Although APAC as a whole provides extensive opportunities for growth, it’s vital that a market-specific approach is taken for the different countries in this vast and diverse region.
For example, we’ve already established that mobile usage is particularly high in China, with 92% of consumers surveyed shopping on mobile. In contrast, The State of e-Commerce report revealed that in Australia, shoppers are more reluctant to purchase online at all, largely because of high shipping costs. Indeed, those in Australia who do shop online, often prefer desktop to mobile – another stark contrast to China.
Channels and platforms favoured by consumers also vary by country. For example, while in some areas of APAC, Facebook and other social media platforms popular in the west have significant reach, in China 23% of consumers engage with brands on WeChat and 14% on Weibo – channels that are largely unknown elsewhere. APAC consumers also like to optimise their shopping experiences through concierge apps and freight-forwarding services.
So, for brands to be successful in APAC, it is important for them to be familiar with the different devices, platforms and consumer preferences within the region – or work with a partner who is. Affiliate marketing is often the tactic of choice to explore new regions as it offers minimal financial risk. And again, the huge range of different channels in use across the region highlights the need for measurement of performance across the entire user journey.
“It’s a well-known fact that APAC is a vast and diverse region with marked differences between countries… Being able to measure the performance of each channel across the entire user journey and in conjunction with other channels will inform which levers to pull for overall strategic performance and an improved consumer experience as a whole,” said Capano.
4. Authenticity is key to building consumer trust and preserving brand integrity
One of the other key findings of the report is that some of the biggest barriers to shoppers in APAC choosing to buy from international brands online relate to trust. Website authenticity and payment security are reasons why many APAC shoppers are averse to online shopping, as are costs in shipping or returns. For example, 18% of Malaysian shoppers cited concerns about the legitimacy of digital storefronts, as well as the ability to return items as key reasons for not shopping online.
Providing robust experiences on both mobile and desktop, plus providing localised languages where possible will increase trust with these consumers. It’s worth noting, however, that as western brands are often viewed as being affluent, bespoke creative isn’t necessarily needed as existing materials can be impactful. Providing consistency across different regional sites may also help increase trust.
In terms of shipping, it’s not always necessary to ship to Asia-Pacific, as consumers in this market are exceptionally savvy and will often use freight-forwarding services and offset the additional costs through a cashback site.
Learn more about the APAC opportunity
These are just some of the insights uncovered by the report to help brands expand into APAC. To find out more, download The State of e-Commerce: Asia-Pacific.
Find out more about what Rakuten Marketing is offering at PI LIVE – including a Q4 retail workshop here.