More than 154 million people across Asia Pacific shopped online for the first time last year – the highest number of new users yet in a single year.
Of all the new shoppers online around the world last year, 69 per cent of them were in Asia Pacific; 53 per cent from China.
And according to new research by Forrester, while the region posted the slowest growth of online sales by value of any region last year, total sales still soared by US$230 billion. One-third of that new turnover was from China, which accounted for 82 per cent of the region’s total online retail market.
E-commerce sales grew by 16 per cent across Asia Pacific driven by the grocery category which was up 46 per cent. India was the slowest growing market, Australia the fastest.
In a new report, Forrester forecasts the value of the online retail market across the region will reach $2.8 trillion by 2025, compared with $1.7 trillion last year. Grocery will lead the growth, reaching $473 billion by then, overtaking electronics as the leading category for the first time in 2024.
Forrester predicts that online shopping will account for about one-third of total retail sales by 2025.
Where the growth came from
The stunning growth of newcomers to the market was clearly influenced by the Covid-19 pandemic restricting people from shopping in physical stores across multiple markets in the region. While new pure-play grocery retailers launched online after attracting investment, incumbent retailers moved into the grocery sector and brick-and-mortar players increased their online presence to maintain sales when store restrictions were imposed.
For example, in India, Flipkart had a limited presence in grocery retailing prior to the pandemic, before launching a 90-minute delivery service, to help make grocery the country’s fastest-growing online retail category.
Tata Group bought BigBasket, the nation’s largest online grocery retailer, making inroads into the e-commerce sector and Reliance Retail launched JioMart grocery to serve demand in more than 200 Indian cities.
Forrester adds that retailers in the region are using offline stores to improve their reach. For example, in China, Alibaba took a controlling stake in Sun Art Retail, the country’s largest supermarket chain, which has 76 per cent of its store network located outside major urban areas. That allowed Alibaba to break into the underserved non-urban consumer market.