Uncover the evolving eCommerce landscape in Asia post-COVID. Discover the trends, challenges, and opportunities shaping the online retail industry in Asia.
The COVID-19 pandemic has had a great impact on the world’s economy, with various industries struggling to keep afloat with the new normal. Amidst the economic instability, eCommerce became a beacon of hope to many businesses, especially SMEs. In the wake of social distancing norms and safety concerns, consumers have turned to online shopping, making eCommerce a sustainable source of income for sellers. Furthermore, with a population of approximately 4.8 billion people, Asia is home to some of the world's largest and fastest-growing eCommerce markets. The pandemic has accelerated the already impressive growth of eCommerce in this region, paving the way for more companies, even individual sellers to venture into the eCommerce landscape for their business sustainability.
Trends of Asia’s eCommerce Landscape Post-COVID Social media platforms have become the go-to destination for online shopping in Asia, with many eCommerce companies using them to reach new customers and drive sales.
To quote an example, the market share of a multinational butter brand in the Philippines was waning due to factors such as local competition, a lack of major campaigns and promotions, and a limited marketing budget. To make matters worse, the sharing of food recipe videos was already a well-worn trope among Filipino food brands. To turn things around, ADA relaunched and reintroduced the brand to a younger generation using a branded hashtag challenge on TikTok. The campaign was highly successful, gaining a total of 21 million views in user-generated videos.
Growth of cross-border eCommerce The pandemic has led to increased demand for imported products, and eCommerce has made it easier for consumers to access products from other countries . With eCommerce platforms offering faster and more affordable shipping options, cross-border eCommerce is expected to continue growing in the future. McKinsey & Company forecasted the total value of merchandise traded between different borders will rise by 67%, reaching USD 500 billion by 2025. Therefore, it is imperative that businesses ramp up their online offerings in response to the latest consumer behaviour to stay relevant.
Looking at China’s economic resilience during the COVID-19 pandemic, eCommerce giant – Amazon has decided to provide more assistance to Chinese merchants in building their cross-border capabilities by offering them training courses as well as improving its localisation, logistics, and supply chain services.
Use of artificial intelligence (AI) and machine learning (ML) Artificial Intelligence (AI) and Machine Learning (ML) can help eCommerce companies analyse customer data, personalise shopping experiences, and improve the overall efficiency of their operations. Hence, companies that can use AI and ML to their advantage will gain a strong footing in the rapidly evolving and highly competitive eCommerce marketplace.
L’Occitane combines ML (embedded in their website) and AI to anticipate their customers’ next purchase. With the information about their previous purchases, it was able to create customised content for its returning customers. For instance, they might see a restocking suggestion based on the stock turn of the products they previously purchased.
Challenges faced by Asia’s eCommerce Industry Poor infrastructure is a common issue in many countries within the region, particularly in islands and rural areas. This presents significant delivery challenges due to the underdeveloped road and rail networks. However, eCommerce companies are investing in logistics to improve their delivery capabilities and expand their reach. In fact, to increase economic inclusion for rural communities, BAKTI ramped up digital education for rural sellers and introduced BAKTIDESA.ID, an eCommerce platform to aid village-owned businesses in reaching a wider market.
Our partner, Tokopedia in Indonesia also contributed to the bridging of the digital gap by offering more digital goods and services. Not only this enhances the local consumers’ quality of life but also positions itself to be a one-stop shop that links merchants with customers.
Furthermore, the utilisation of drones and autonomous vehicles is also expected to transform the logistics landscape, making deliveries faster and more efficient.
Lack of trusted payment systems The lack of widely accepted and trusted payment systems in selected Asian countries can make it difficult for eCommerce businesses to expand and reach new customers. In some cases, customers may not trust online payment methods, which can lead to a lower conversion rate.
The adoption of eWallet surged due to the government’s encouragement on cutting down the use of cash to reduce COVID-19 transmission. This resulted in an eWallet battle royale as all are vying for a more significant share of wallet (SOW). To remain competitive, ADA helped Boost launch data-backed campaigns that effectively grew new users by 12x.
Building consumer trust is essential for eCommerce businesses to succeed in Asia. Many customers in the region are still wary of shopping online due to concerns over fraud, product quality, and customer service .
Experian’s Global Identity & Fraud Report – June 2022 stated that one out of four consumers fell victim to online fraud and 80% of the consumers expect businesses to keep them safe in digital space. Fortunately, there are fraud management systems established to counter this problem. To create a safe yet seamless shopping experience, brands can consider implementing connected intelligence and specifically digital identity verification whereby active step-up authentication is only introduced when required. At the same time, they must take note of the personal information being solicited in all the markets where they have an online presence. For example, Indonesia’s consumers are more likely to use their mobile numbers to make payments and open new accounts since they are mobile-driven.
Scale your online business to reach new milestones Despite the challenges, the Asian eCommerce industry is expected to maintain its impressive growth post-COVID, thanks to the increasing popularity of social commerce, cross-border eCommerce, and advanced technologies. Brands that successfully leverage these opportunities while addressing potential pitfalls will be able to capture a significant market share in online trade.
