Could you provide us with a glimpse into the cross-border ecommerce market in Asia-Pacific? What is the potential for growth and what are the most interesting markets to watch?
From a cross-border ecommerce perspective, the entire Asian market continues to grow phenomenally. This growth is mainly owed to the fact that more and more consumers are shopping cross-border, especially in Hong Kong, Singapore, and Malaysia. Moreover, there is a strong demand for products and services across Asia and China, from apparel, electronics or healthcare products to beauty products and more – both physical and digital goods.
I believe that all cross-border commerce activities, mainly online shopping, will continue to register a high growth in the region. A recent research of IPC and Accenture on Asian ecommerce shows that over 40% of it is cross-border, so one can easily understand how frequently consumers in Asia are shopping from outside their domestic market.
The growth of cross-border ecommerce in the region has mainly been fuelled by certain developments in the Asian markets. On one hand, it is getting easier for consumers to get access to products and services from overseas and to purchase them. Other growth factors also include developments in the mobility sector and social media, which bring more convenience to shoppers looking for products outside their home market.
As interest in cross-border shopping grows in Asia-Pacific, what should merchants do to exploit this opportunity?
Primarily, merchants trying to sell their products cross-border should start by having a website in order to reach a larger audience.
What we currently see on the market is that there is more demand and interest among these merchants and shop owners to sell their products through marketplaces. There are many types of marketplaces in China, Singapore, Thailand, and Malaysia, and I believe that merchants need to prepare for this opportunity. Some areas they should definitely address are related to an easy setup, to the ways they serve their customers not only in the domestic market, but also cross-border and being multi-lingual, and equally important is providing access to a broader range of payment options and currencies, which can optimise sales conversion.
Brand awareness, marketing, logistics are key, not to mention the quality of the products and services. In addition, for marketplaces it is paramount to provide the right language, as it can be a crucial barrier in reaching a broader audience.
What are the advantages of multi-currency solutions and how do they impact conversion?
Consumers will definitely find it easier to purchase the things they like, if they have the option of paying in their home currency. When it comes to currency processing for merchants, one of the solutions that meet their needs is the dynamic currency conversion, or DCC on top of multi-currency pricing. This is quite popular now in Asia for merchants that want to capture those opportunities from customers overseas.
What are the challenges of accepting foreign currencies when selling across borders?
Beforehand, merchants willing to start accepting foreign currencies have to turn to banks – which can help them facilitate this process. In some of the Asian countries, because of the regulatory environment, banks may not be able to offer many multi-currency choices to merchants, like in Taiwan, for example. We should also mention the ease of the foreign exchange process, especially when you price your product in other languages are in other currencies. In case of any fluctuations, this could potentially impact the business margin.
What are the challenges of providing multi-currency solutions across different markets?
When it comes to multi-currency solutions and services from either banks or payment companies, the biggest challenge is related to the fact that some banks offer them and some don’t. So when merchants are looking for multi-currency solutions, they should find the right partners. On the other hand, they should pay attention to the technical setup. They have to ensure that the rate look up or the rate updates are current and timely in order to avoid any fluctuations that may occur. Multi-currency solutions are relevant when setting the price of a certain product in multi-currencies, helping the merchants be aware of the currencies they have to collect at the end of the settlement period from the payment company and the banks. Some payment companies and banks can offer like-for-like settlements – these can help a domestic merchant in Singapore when selling overseas, for example to price and sell in a foreign currency. Certain banks can offer you a settlement in Singapore other than say SGD and USD, but some will not do so; there are banks that will only allow the settlement after converting the transaction currency into their home currency.
In Asia, some of these like-for-like currencies are not in a certain domestic market. Chances are that some banks requiring incremental cross-border fees leave them to merchants when these merchants are handling more multi-currency solutions.
To summarise, the main benefits of offering multi-currency solutions are increasing sales conversion and helping merchants enjoy a much lower portion of discount rate because of some conversion incentive.
This interview was first published in our Cross-Border Payments and Commerce Report 2019 – 2020, which provides a comprehensive overview of the major trends driving growth in cross-border payments, cross-border commerce, and marketplaces.
About Joseph Chan
Joseph Chan founded the company in August 2000. He spearheaded the company and product development together with his management team to become one of the most successful e-payment service and technology company in Asia, with operations in 14 countries. He has consolidated his expertise and experience in strategic planning, management and implementation of financial, electronic banking, Internet, and mobile product services and systems in Asia.
About AsiaPay
Founded in 2000, AsiaPay, a premier digital payment service and technology player, strives to bring advanced, secure, integrated and cost-effective electronic payment processing solutions and services to banks, corporate and e-Businesses in the worldwide market, covering an array of international credit card, debit card, prepaid card, net banking, e-Wallet and QR, as well as cash collection. AsiaPay is an accredited payment processor and payment gateway solution vendor for banks, certified ISO and PF for serving merchants, certified international 3-D Secure vendor for Visa, MasterCard, American Express and JCB. AsiaPay offers its variety of award-winning payment solutions that are multicurrency, multi-lingual, multi-card and multi-channel, together with its advanced fraud detection, payment analytic and management solutions. Headquartered in Hong Kong, AsiaPay offers its professional e-Payment solution consultancy and quality local service support across its other 16 offices in Asia including: Thailand, Philippines, Singapore, Malaysia, Mainland China, Taiwan, Vietnam, Indonesia, Australia and India.
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