There are some shocking facts and figures that show just how huge the ecommerce market in Asia is. Here’s one to start – the value of ecommerce paid for with something other than a credit card, just in China, is greater than the value of the entire Western European ecommerce market, according to PPRO research.
The entire ecommerce market in Asia is worth USD 1.4 trillion a year. That’s TRILLION. For comparison, the equivalent figure for Western and Central Europe is less than half at USD 618 billion. And as more Asian markets transition from developing to developed economies (for example what is happen today in Malaysia according to the World Bank) — and more consumers come online, the Asian ecommerce market will dwarf that of any other region.
Here are five more facts that gives scale to the shocking size of ecommerce in Asia:
By value, the online market for air travel and hotels in Asia is worth USD 58 billion more than the entire revenue for the whole US air-travel sector, including both online and offline bookings. The total value of all ecommerce in Asia is USD 1,363.65 billion. 20.53% of 1,363.65 is 280. The US air travel sector is worth USD 222 billion.
Each year, the APAC ecommerce market grows by 18% — USD 252 billion a year. That growth alone, is worth more than the combined ecommerce markets for France, Germany and Italy.
In 2018, Chinese shoppers spent USD 115 billion with merchants based outside of China. That’s bigger than the ecommerce markets of Mexico and Canada combined.
The ecommerce market in Southeast Asia is roughly the same size as those of Belgium and Holland. Within six years, it will be as big as the UK’s — Europe’s biggest ecommerce market.
Nevertheless, in order to succeed in Asian markets, newcomers need to localise. According to the latest 2019 research, when asked what the biggest obstacle was to increasing public participation online, 76% of tech and business leaders surveyed said “language”, specifically the need to be able to read English. Consequently, offering ecommerce pages in target market local languages becomes increasingly important.
But it’s not just language you need to localise. The payments market in Asia is also highly fragmented. And the type of local payment method (LPM) preferred can vary widely, even between neighbouring countries.
In Singapore, for instance, 74% of all ecommerce transactions are paid for using credit card, but most of these are local cards, not the globally familiar ones. In neighbouring Malaysia, on the other hand, just 25% of purchases are paid for by card, with bank transfer being the most popular type of online payment. The only thing the two payment markets have in common, is that merchants won’t be successful in either if they only support familiar Western payment methods and didn’t cater to local preferences.
In conclusion, the easiest way for payment service providers (PSPs) to ensure that they can offer their merchants the right LPM for every market is to work with partner payment aggregators. Such an aggregator, with its specialist in-market knowledge, can keep on top of the Asian payments market more easily than any single PSP. It can add new payment methods as they become relevant and then make them available to PSPs and their merchants through a single interface and a single contract.
About Tristan Chiappini
Tristan Chiappini is the Head of Account Management for PPRO, an aggregator of local payment methods (LPMs) with offices in London, Munich, Atlanta, Singapore and opening soon in LATAM. Today Tristan is based in the London office but will shortly be moving to Singapore office to take responsibility for the company’s Asian operations.
About PPRO
PPRO enables integrated electronic payment processing on a global scale spanning the entire payments value chain from acquiring through processing, collection and settlement. PPRO acts as a B2B payments hub, connecting PSPs and other merchant aggregators, such as acquirers and processors, with local payment schemes.
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