Global eCommerce sales are on track to hit 4.13 trillion USD by 2020, driven by transactions from more than 2.1 billion buyers around the world. While most top-tier markets like North America and the UK are relatively consistent when it comes to customer behavior and payment facilitation, tertiary e-commerce markets are subject to the kind of fragmentation that demands a more tailored approach.
The Asia Pacific (APAC) market in particular represents a major revenue opportunity for North American merchants due largely to the fact that it contains a high percentage of online shoppers. Those able to navigate the region’s nuanced digital landscape will find it to be even more opportunity-rich than their native markets. A recent study found that e-commerce accounted for roughly 8.6% of all retail sales made worldwide. APAC markets came in above the global average with 12.1% of all retail sales occurring online, and are estimated to reach over $1.89 trillion in value by the end of 2018. With adoption on their side, North American e-commerce merchants looking to move into the APAC region are poised to succeed, provided they can incorporate these three critical factors into their go-to-market strategies.
A confluence of socio-economic and cultural factors have made the APAC region a primarily mobile-driven marketplace. It’s so omnipotent that one study found 46% of internet users in the Asia Pacific region have purchased products or services using a mobile device. E-commerce businesses need to keep this top-of-mind if they’re going to drive profitable traffic to their storefronts, especially during the cultural celebrations best known for triggering surges in digital retail traffic.
Singles Day saw customers conduct at least $25 billion worth of retail shopping over a 24 hour period. One popular Southeast Asian marketplace enjoyed major spikes in traffic and conversion, with 70% of all sales being made on mobile devices. Responsive web design and mobile SEO practices should be employed in order to optimize all stages of the mobile marketing funnel. If your e-commerce brand doesn’t yet offer customers an app-based shopping channel, give strong consideration to investing in one before pursuing success in the APAC market. When the times is right, you’ll likely find some marketing channels driving greater value than others.
With your mobile channels optimized, e-commerce vendors would be well served to invest heavily in a strong social media presence as part of their APAC market strategy. Messaging and social media applications have one of the highest adoption rates within Asia Pacific, and are tightly integrated with mobile commerce functionality through chatbots and embedded mobile storefronts. Merchants need to be able to handle customer engagement from this channel effectively in order to gain trust and drive conversions.
A recent study from Facebook found that “Among people surveyed who message businesses, the majority say being able to message a business helps them feel more confident about the brand.” Within emerging markets especially, many of which belong to the APAC region, customers are twice as likely to message businesses at least once a month. The consequences for being unable to meet this level of demand are perhaps best expressed by one study respondent from Brazil, who said that “If a seller keeps me waiting longer than 10 minutes, I’ll move on to another seller.” North American e-commerce businesses will need to take their mobile strategy beyond simple brand page maintenance in order to fully realize the APAC market potential. A big part of that is meeting customers where they’re most comfortable.
Perhaps the most critical characteristic of the APAC market is its fragmented payment landscape. In most of Southeast Asia (excluding Singapore and Malaysia), credit card penetration rates are low and a large percentage of the population are unbanked. It might be hard to believe for merchants accustomed to doing business in North America, where credit card and bank account adoption rates are much higher, but many APAC customers do businesses using local payment methods including cash or geographically-restricted debit cards, making support for these methods mandatory for expansion. In Thailand, cash on delivery and over-the-counter payment methods account for 35% of all online payments, the largest of any other preferred payment method in the country and greater than the less than 30% of transactions completed using bank transfers.
Confronted by a fragmented and unfamiliar payment landscape, many hopeful North American e-commerce merchants are dissuaded from venturing into the APAC market, often electing to double down on local markets instead. It’s understandable considering the volume of research and bespoke work often required to gain even incremental growth in addressable market size within the APAC region. While the opportunity is substantial, most firms just can’t make the ROI add up. Fortunately, Rapyd can help.
We’re on a mission to make the world smaller by empowering e-commerce merchants to realize valuable new opportunities in international markets. Rapyd is a payment operating system with more than 1.5M access points around the world including countries like the Philippines, Indonesia, Thailand and more. We help our clients overcome the technical barriers inherent to international expansion by unifying cash and local payment solutions into a single cardless platform. With a single API, Rapyd’s operating system also includes turnkey compliance right out of the box while allowing users to conduct omnidirectional transactions in more than 70 of the world’s most widely trafficked fiat currencies.
Rapyd is a mobile-first platform that offers a comprehensive suite of modular solutions to help e-commerce merchants expand their total addressable market size and drive revenue. Through a single, intuitive API and SDK integration, Rapyd unlocks immediate access to valuable new market segments all across the world, including the APAC. Visit our website to learn more about how you can get started with Rapyd today.
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