An Overview of E-commerce and Online Shopping Trends Across Asia
The landscape of e-commerce in Asia has undergone a huge shift, brought about primarily by the global pandemic. As the world grappled with Covid-19, consumers across Asia turned to online platforms to fulfil their shopping needs amidst lockdowns and social distancing measures.
This digital pivot has not only redefined retail norms but also set a new trajectory for consumer behaviour that is likely to persist in the post-pandemic era.
In this article, we’ll explore these trends and challenges in detail, offering an overview of the e-commerce and online shopping landscape in Asia, and providing valuable insights for those looking to enter or expand into the Asian market.
Pre and Post Covid Consumer Behaviours
Asia’s e-commerce landscape has seen a significant transformation, influenced by the pandemic’s impact on consumer behaviour and market dynamics. Here’s a detailed look at the pre and post-Covid behaviours:
The Rise of Food and Grocery Delivery
The pandemic catalysed the growth of food and grocery delivery services, a trend that has persisted even as restrictions eased. In urban centres like Jakarta, rapid delivery services such as Astro’s 10-minute delivery promise have set new consumer expectations for convenience and speed.1
An Overall Spike in Online Shopping
Initially, there was a substantial increase in online shopping due to Covid-19, which has since moderated with the reopening of physical stores. Despite this, the shift to online shopping has maintained a higher baseline than pre-pandemic levels, indicating a permanent change in shopping habits.
Many of the fastest growing countries in ecommerce sales growth are in APAC (Tidio)
Changing Consumer Behaviours and High Expectations
Consumers in Southeast Asia, characterised by their desire for variety and price sensitivity, have transitioned these expectations to the online realm. The pandemic has further heightened these expectations, with consumers demanding more choices, competitive prices, and faster delivery.
Dominance of China and India, with Thailand and Indonesia on the Rise
While China and India continue to lead in online spending, the post-pandemic period has seen Thailand and Indonesia experience significant growth in e-commerce. This is evidenced by the web traffic to major e-commerce platforms in these countries, with Indonesia’s Tokopedia garnering 157.2 million visits in the first quarter of 2022 alone.1
Remote Work Further Boosting E-commerce Sales
The adoption of remote work in countries like Thailand and Singapore has complemented the rise in e-commerce sales, as home-bound consumers find more reasons and time to shop online.2
These insights paint a picture of an e-commerce sector that is rapidly evolving, driven by changing consumer preferences and the lasting impact of the pandemic on shopping behaviours.
How Different Product Categories Are Performing Online
The e-commerce sector in Asia has seen varied performance across different product categories, both pre and post-COVID-19. Here’s an exploration of how FMCG, fashion, electronics, and toys/hobby categories have fared:
FMCG (Fast-Moving Consumer Goods)
Online sales of FMCG products have grown significantly, driven by the convenience of home delivery, the rise of online grocery platforms, and – according to McKinsey – the growth of Asia’s consuming class.14 More and more Asians are getting wealthier, and much of that wealth is being spent on FMCG – especially through online retailers. This online buying trend was only accelerated by the pandemic, as consumers sought safer shopping alternatives.
Asia’s ecommerce FMCG value shares (Statista)
Fashion
The fashion industry faced a dual challenge: a dip in demand due to economic uncertainty and a shift towards online shopping. McKinsey’s “The State of Fashion 2022” suggests that while the fashion sector initially struggled globally, e-commerce has offered a lifeline, with consumers increasingly turning to online platforms for their fashion purchases. However, the tactile nature of fashion means that brick-and-mortar stores remain relevant for a segment of shoppers.15
Electronics
The electronics sector in Asia has seen robust growth in e-commerce. Consumers have increasingly turned to online platforms for electronics purchases, driven by the convenience of comparing products and prices, as well as the availability of detailed product information and reviews.
The market is projected to continue growing, with a significant portion of sales occurring online. This trend is supported by data indicating that electronics and media account for a substantial share of online sales in regions like Indonesia.16
Toys/Hobbies
The toys and hobby market is also experiencing growth in the e-commerce space. Statista forecasts an 8.85% growth from 2023 to 2027 in the Toys, Hobby & DIY market in Asia, resulting in a market volume of US$461.20 billion by 2027.17
This growth is indicative of a shift towards online shopping for these categories, although brick-and-mortar stores remain important for certain segments of consumers, particularly for those who value the in-store experience and the ability to physically interact with products before purchasing.
What Has Worked and Not Worked from the Consumer’s POV
From the consumer’s perspective, the e-commerce landscape in Asia has been a mixed bag of successes and challenges.
Overpromising Delivery and Logistics Shortfalls
Consumers have faced disappointments with overpromised delivery times, a symptom of inadequate logistics infrastructure in some areas. McKinsey’s insights reveal that the rapid growth of e-commerce has outpaced the readiness of logistics players, leading to a gap between consumer expectations and delivery realities.3
The Success of a Hybrid Approach
The hybrid retail model, blending online shopping with traditional in-person experiences, has gained favour. Retail TouchPoints highlights the growth of e-commerce in Asia, suggesting that despite the convenience of online shopping, there is a clear consumer desire for the tactile experience offered by brick-and-mortar stores.4
Balancing E-commerce and In-Person Shopping
An over-pivot to e-commerce has not been universally successful. As per Tech Wire Asia, there’s a trend towards ‘phygital’ experiences that merge physical and digital shopping, indicating that while online shopping is here to stay, it cannot completely replace the in-store experience.5
Ever-Evolving Product Categories
Product categories have seen divergent trends across Asia. Statista forecasts that while some sectors like electronics continue to grow, others may see a plateau or decline as markets mature and consumer priorities shift post-pandemic.7
The Role of Influencers and Live Streamers in E-commerce
The e-commerce landscape in Asia has been revolutionised by the advent of live commerce and the strategic use of influencers and live streamers. Influencers have become key players in e-commerce by leveraging their trust and attachment with followers to drive consumer purchase intentions. They serve as brand ambassadors, showcasing products in real-time and providing authentic product demonstrations. This has led to a fresh and engaging shopping experience, where consumers can interact and buy instantly.
The Rise of Live Commerce
Live commerce, essentially a blend of live streaming and e-commerce, has taken Asia by storm. It offers an interactive shopping experience that combines instant purchasing with entertainment. In China, for example, live commerce has become a staple for successful consumer companies, with influencers hosting daily sessions and brands frequently engaging in live streams multiple times a week.8
Consumer Attitudes Toward Influencers in E-commerce
Consumers have shown a positive response to influencer-driven live commerce, as it provides a more personal and trustworthy shopping experience. However, there’s a growing awareness about the authenticity of influencer endorsements, and consumers are becoming more discerning.9 The trust factor plays a crucial role in the effectiveness of influencer marketing.
Challenges Faced by Companies Working with Influencers
While the benefits are clear, companies face challenges in this domain. There’s the risk of influencer fatigue, where the market becomes oversaturated with endorsements. Additionally, maintaining the authenticity and credibility of influencer promotions is a constant challenge.10 Companies must navigate these issues carefully to ensure the sustainability of influencer collaborations.
The Role of Payment Solutions in E-commerce and Recent Trends
Payment solutions play a pivotal role in shaping consumer behaviour and driving e-commerce sales. Here’s a closer look at the role of payment solutions and a few other recent payment trends:
Digital Wallets
Digital wallets have become the cornerstone of e-commerce transactions in Asia, offering convenience and speed. A report by McKinsey highlights that Southeast Asia, in particular, has seen a surge in the adoption of mobile wallets, driven by the e-commerce boom and the pandemic’s push towards contactless transactions.11 These wallets are not just a payment method but are evolving into financial service platforms offering a range of services.
Buy Now, Pay Later Options in Asia
BNPL schemes have gained significant traction across Asia, appealing to consumers with their flexible payment options. Fintech Singapore notes that in the Asia Pacific region, customers are increasingly embracing BNPL arrangements, which allow them to spread the cost of purchases over time without incurring interest, thus making higher-value items more accessible.12
Security Enhancements
As digital transactions increase, so does the focus on security. The Asian Banker reports that with the rise of digital wallets and BNPL, e-commerce payments are becoming more secure with advanced fraud detection systems and encryption technologies.13 This ensures consumer trust and is essential for the continued growth of online shopping.
The integration of these payment solutions into e-commerce platforms is not just a trend but a necessity in the digital age. They cater to the Asian consumer’s demand for convenience, flexibility, and security, thus playing a crucial role in the e-commerce ecosystem.
Asia Insight’s Tools in Analysing E-commerce Performance
Asia Insight’s expertise, coupled with the analytical prowess of Digital Monitor, equips businesses with the necessary tools to not only navigate but also lead in the complex e-commerce landscape of China.
Digital Monitor offers a sophisticated online metering technology that captures the digital behaviours of consumers across China. This tool provides companies with precise insights into online visitation patterns, enabling them to make informed, data-driven decisions that are crucial for success in the e-commerce domain.
- Accurate Consumer Insights: By tracking actual online behaviour, Digital Monitor provides a reliable understanding of consumer habits, preferences, and motivations.
- Interactive Engagement: The tool facilitates a deeper connection with consumers through interactive engagements, helping businesses grasp the ‘why’ behind the ‘where’ in consumer online activities.
- Strategic Decision Making: Armed with actionable insights, companies can optimise marketing strategies, tailor product offerings, and stay ahead in the competitive e-commerce market.
Understanding and adapting to the nuances of consumer behaviour is key to succeeding in the e-commerce arena across China.
Contact our team today to learn how we can provide the insights you need to make sound marketing decisions across China – whether you’re looking to grow, expand into new markets, or better understand your consumers.
Sources:
1 https://glginsights.com/articles/post-pandemic-e-commerce-trends-in-southeast-asia/
2 https://lot.dhl.com/has-covid-19-changed-asias-e-commerce-landscape-forever/
7 https://www.statista.com/outlook/dmo/ecommerce/asia
8 https://croud.com/blog/the-rise-of-live-shopping-in-southeast-asia/
9 https://www.mdpi.com/0718-1876/18/3/81
16 https://ecommercedb.com/insights/ecommerce-in-indonesia-fueled-by-young-tech-savvy-consumers/4573
17 https://www.statista.com/outlook/dmo/ecommerce/toys-hobby-diy/asia
