The top 4 ecommerce markets to watch in Asia

Payments in Asia are complex and fragmented but the rewards for merchants looking for hyper growth are clear. By 2030, the digital economy in Southeast Asia will be worth USD 1 trillion. In China, consumer spending is set to double by 2030. By 2035, the Indian ecommerce market is expected to be worth USD 350 billion, sending it rocketing past more mature markets such as the UK’s to become the third largest in the world. 

Asian ecommerce is booming. And little wonder. Between now and 2030, 60% of the world’s economic growth will come from Asia. In an ideal world, ecommerce merchants looking for growth would invest right across Asia. 

But very few businesses can afford to expand everywhere at once. So where should merchants, and the service providers who support them, concentrate their efforts? 

Based on original research from PPRO, here are the four markets to watch in Asia.

Indonesia’s ecommerce market is worth USD 24 billion today and is expected to grow to USD 54 billion over the next four years. There’s no reason to think this rapid growth will slow down. Indonesia’s population is already used to, and enthusiastic about, shopping online. 75% of adults have a smartphone, so Indonesians are connected and ready to shop using their preferred ewallets.

Unusually in ASEAN over 85% of Malaysians are banked. The country’s ecommerce market is worth USD 7 billion today and will almost double to USD 13 billion by 2025. Cross-border ecommerce is the norm, almost 60% of Malaysians already shop with foreign merchants, so there’s a clear willingness to try new providers in search of a bargain. And with the announcement of the Malaysian Digital Economy Blueprint 2021, there’s strong government support for digitalisation in a market where the preferred payment method is FPX an online bank transfer, with ewallets continuing to grow in popularity. 

Singapore prides itself on being one of the world’s most connected societies, data from PPRO’s newly launched Payments Almanac says that 44% of ecommerce is already cross-border. Total ecommerce is worth USD 6 billion today, but the market is forecast to grow by more than 83% over the next four to five years. Since the pandemic, the city’s online grocery market has grown by 120% and Singaporeans show every sign of sticking with online shopping using their favoured eNets, GrabPay, PayNow and various BNPL schemes, even when social distancing eases. 

India is the world's second most populous country and smartphone penetration is already at 700 million people, growing rapidly, thanks to government policies promoting digital payments. Little wonder then, that the ecommerce market is worth USD 60 billion and is forecast to grow to at least USD 120 by 2025. And then to keep on growing. A third of Indian ecommerce, worth more than USD 15 billion, is already cross-border, indicating a willingness to try new retailers. Many local credit cards are not cross-border enabled so access to their locally preferred payment methods like UPI, Rupay and PayTM is vital to accessing this market.

How can businesses maximise their chances of success? 

Localisation is key. In particular, the localisation of payment methods. Research has found that failing to offer a payment method that consumers know and trust can lead to cart abandonment rates. According to recent data, 69.8% of digital shopping carts and baskets were abandoned without completing the purchase. And this figure is increasing. 

Take Malaysia, for instance. If you were already operating in Indonesia, you might think you could simply transfer your Indonesia payments strategy to Malaysia and think nothing more of the matter. In fact, this would be a serious error. 

Indonesian consumers pay for nearly one third of ecommerce purchases using e-wallets like GoPay, OVO, DANA, LinkAja, or Jenius. In Malaysia, that figure is just 14%. Assuming that consumers in Malaysia would be happy paying like Singaporeans is likely to increase your chances of abandoned carts, decreasing your chances of sales and profits.

The answer is to work with partners who can help you localise your payment experience for every market into which you seek to expand. 

About Tristan Chiappini

Tristan Chiappini is VP, Head of Partnerships, APAC at leading local payments infrastructure provider PPRO. He joined the company in 2016 as Head of Account Management and is now responsible for PPRO ́s business in the APAC region. Tristan is based out of Singapore, has over 10 years of experience in the payments industry and an excellent understanding of the Asian market. 

About PPRO

PPRO is a fintech company that globalises payment platforms for businesses, allowing them to offer more choice at the checkout and boost cross-border sales. Payment service providers, enterprises, and banks that run on PPRO's infrastructure are able to launch payment methods faster, optimise checkout conversions, and reduce the complexities of managing multiple fund flows. Citi, PayPal, and Stripe are just some of the names that depend on PPRO to expand their platforms beyond borders. In 2020 alone, the company processed EUR 8.84 billion for its partners. And with a growing global team of over 400 people, it’s no wonder why they’re considered the go-to local payments experts.