In order to find out how retailers in Asia respond to this rapid expansion we carried out a study with 100 leading Asian retailers in partnership with WBR Digital. Here are our top takeaways.
Concentrating on home markets
It comes as no surprise that nearly all the retailers we surveyed said increasing their presence in the Asia-Pacific region is their #1 priority in the next 3-5 years. The region offers a huge population with strong internet and smartphone penetration, making it an attractive proposition for the majority of retailers.
Based on size alone, two countries are top priority: China, the second largest online commerce market globally, and India, which is expected to quadruple in size in the next 4 years. Retailers expanding into either country can benefit from their growing middle classes and the resounding success of retail events like China Singles Day, but merchants should also be of the prevalence of marketplaces (e.g. China’s Alibaba) that have won the trust of shoppers and dominate the online space.
Though top picks of China and India were anticipated, we did find a surprising lack of retailers choosing to target South America, a region not without challenges, but also delivering very strong eCommerce growth in recent years, particularly Brazil.
Overcoming the fraud challenge
The retailers we surveyed are aware of the fraud challenge associated with market entry. 64% perceive Africa to have the greatest fraud risk, followed by their home turf of Asia-Pac with 26%. And the majority (56%) say that the greatest challenge of all lies in understanding fraud risks across different payment methods.
Because some markets carry higher perceived fraud risks, retailers need to understand how to overcome local fraud challenges. These retailers have discovered first-hand that fraud prevention techniques which have been successful in some regions may not be effective in new markets. Additionally, the constantly-changing payment landscape impacts how retailers detect and monitor fraud.
What we know from this survey is that retailers are working hard to eliminate risk. The majority (40%) believe that they are getting there in terms of addressing fraud challenge in new markets. And to do this, they’re understanding the different local payments behaviours and developing more sophisticated means of attack.
Developing a mobile first approach
Mobile phone penetration in the region is high, shoppers think “mobile first”. This means they are more likely to make buy on a mobile device than the global average. And with global mobile commerce growing at nearly three 3 times the rate of overall eCommerce, developing an mCommerce experience is top of mind.
Retailers are adapting, focusing more spend on developing mobile strategies. In the short term, i.e. the next 3 months, retailers are prioritising mobile fraud prevention. 68% of the retailers that we surveyed say that mobile is the most effective way to drive customer retention, so it’s no surprise that longer term spend (next 12 months) will be on marketing tools and data analytics.