E-commerce has become a major hit all over the world. In fact, it is expected to reach a staggering $4.5 trillion which is six percent of the global economy of $74 trillion. When you consider the fact that global economies are comprised of multiple facets, that six percent is quite incredible. One of the fastest growing and the single biggest contributor to the global e-commerce value is the Asian Pacific region. Some of these emerging nations have been able to catch up with advanced nations that were some of the early adopters of technology, embracing digital transformation, and driving the statistics through the roof. So, what is driving the success of e-commerce in Southeast Asia?
There was a video that was widely shared online that featured people showing QR codes to shopkeepers and taking delivery of products that were ordered online. China is one of the countries that has adopted the technology in a manner and pace unseen anywhere else. There was a report by McKinsey that stated that “digital technology is powering China’s economy.” This would explain China’s success in becoming one of the biggest players having a 42% market share in the global e-commerce market. What is interesting about this fact is that a decade ago, it wasn’t even one percent of the global market.
One of the advantages China has had over other economies with well-entrenched technologies is that any new entity will find it easier to adopt a new technology. Chinese companies have found it easier to adopt these new technologies, and the public who were exposed to the conveniences of these technologies lapped up the options.
Online shopping has made it more convenient to shop while also being an additional channel for retail sales. It has also pushed sales higher in locations where other channels were fewer. This is quite the same in SE Asia and other nations that are taking e-commerce to the next level. With all of the new solutions, customers now have many flexible options which come at no additional costs to the e-commerce players. Instead, it has helped to slash any financial burden associated with missed deliveries and returns. These changes have ultimately transformed the online shopping experience and the discerning Asian buyer has been able to adapt to these changes easily while pushing e-commerce statistics higher.
Asia, particularly SE Asia will soon witness the clash of the two tech titans in the region, Alibaba and Tencents. E-commerce is technology driven by definition. But, the difference comes in the level of adoption and integration of various options, a powerful platform, convenient and multiple paying options, last mile delivery, along with messaging platforms that connect. The current success of e-commerce in Asia has been through its use of emerging technology as a facilitator.