Asia Pacific is set to become the world’s leading region for eCommerce, expecting to generate regional sales of US$1892 billion and global sales of US$3015 billion by next year, according to a new study by business consultancy Frost & Sullivan.
Malaysia and the Philippines are experiencing the strongest growth, while China and Korea will command the highest sales.
However, there are challenges, says the report, the major one being IT infrastructure. The firm’s research shows that the slow loading time of web pages is one of the main reasons customers move from one eCommerce company to another. Even a delay of a single second creates customer dissatisfaction.
“Online consumer loyalty is much lower than that of traditional brick-and-mortar consumers. In the digital world, there is little patience for poor eCommerce,” says CDNetworks Singapore country manager/head of sales for SEA-Pacific Jerry Chung. His company provides special technology to ensure quick loading of eCommerce web pages, and he says merchants find that a speed boost of just one second can increase sales by 3 per cent.
In a Frost & Sullivan consumer survey, 47 per cent of respondents said they expect a website to load within two seconds, while 40 per cent said they would leave a site if it did not load within three seconds.
According to the company’s White Paper, e-Commerce Retailers – The Next Billion-dollar Opportunity – Are We Ready?, eCommerce retailers need both flexibility and reliability when developing their platforms.
As well as changing consumer preferences, the use of smartphones and tablets remains pivotal for the growth of the eCommerce industry, says the paper. It is estimated that up to 30 per cent of eCommerce sales globally are by such devices.
There are already more than 1 million online retailers in ASEAN, with the top 20 per cent of eCommerce retailers providing 63 per cent of the total revenue. The key drivers for eCommerce growth include the expanding middle-class population, changing consumption and buying patterns, and now mobile payments, which are expected to account for more than 10 per cent of total payment transactions in Asia-Pacific by 2020, with emerging countries showing higher growth.
This evolving business landscape has also proved conducive for cross-border eCommerce, especially in the Asia Pacific. It is a key driver for regional growth, but its complexity has become one of the biggest challenges facing the industry, says the Frost & Sullivan study.