UPS study snapshots APAC’s latest e-commerce trends

ALIBABA Founder Jack Ma recently said that the e-commerce industry is ripe for digital disruption, and it seems as though new studies support the 54-year old Chinese entrepreneur’s forecast.

In its seventh annual edition, the UPS Pulse of the Online Shopper 2019 — updated to answer pressing questions in the e-commerce industry — highlights some key e-commerce trends in the market.

Although it only covers Australia, China, Hong Kong, and South Korea in the APAC, leaving out key markets such as Singapore, Malaysia, and Indonesia, the report captures some important insights about customers and businesses in the e-commerce industry, in the APAC and globally.

“As consumers are presented with more outlets to buy online and competition increases, expectations are becoming more refined and retailers need to be agile enough to stay ahead of the trends,” observed UPS APAC Marketing VP Sylvie Van den Kerkhof.

“The ability to offer incentives not just in the form of a unique product offering but also in the shipping and delivery experience will be crucial to success in the evolving e-commerce landscape.”

The report points out that 96 percent of online shoppers (globally) have used a marketplace and a high percentage of them use it on a daily or weekly basis in Asia.

Online shoppers typically tend to buy online when prices are low, there’s free or discounted shipping, have the option to pick from a wider range of product categories, can view product reviews, and know that deliveries will be made quickly.

Further, the report, based on their interaction with 18,000 respondents, claims that the future of e-commerce looks very bright as thirty-six percent of consumers worldwide say they intend to purchase more on marketplaces in the next 12 months.

The report also points out that small businesses are most likely to purchase from online marketplaces because they tend to get better prices (73 percent), get a more efficient shopping experience (42 percent), and get better (product) return policies (43 percent).

While the report, in line with its global perspective, highlights that most e-commerce market growth will probably be recorded in Central/South America and Africa, there are indications that China is on the cusp of an e-commerce revolution.

“China is the engine room of e-commerce in Asia Pacific and a significant reason why already more than 50 percent of e-commerce transactions around the world originate in this region,” said UPS China President Harld Peters.

“The value of China’s e-commerce market grew to over US$1.3 trillion in 2018, and Chinese consumers are without a doubt, some of the savviest online shoppers in the world.

One of the most important things for e-commerce success in the APAC, as identified by UPS, is the marketplace’s returns policy and the geographic location of sellers on the marketplace.

The company’s press release makes it clear that reviewing a retailer’s returns policy is also often part of the pre-purchase process, with 42 percent of online shoppers in the APAC doing this before making a transaction.

The findings also identify that shoppers may cancel a purchase when they find out the retailer is based internationally, if they are unaware of this initially.

Seventy-seven percent of shoppers in China have done this, as well as 65 percent in Australia, and 60 percent in Hong Kong and South Korea.

However, this doesn’t mean that shoppers in the APAC aren’t willing to shop from abroad or wait for deliveries.

Seventy-five percent of all shoppers in the APAC have knowingly made purchases from international sellers, suggesting that online shopping is situational.

Depending on what is being purchased and how urgent it is, international purchases are also interesting to customers in this region.

In addition to being a key part of the pre-purchase routine, a good returns policy, the UPS report found, can also encourage customer loyalty.

Returns is an area that e-commerce companies in the APAC seem to need to work on, with just 5 percent of APAC shoppers saying they are “very satisfied” with the returns process. Quick changes to policy might even earn companies in the region an edge over the competition.

The common causes of dissatisfaction with the returns experience were a delay in receiving refunds (cited by an average of 32 percent of respondents across the region), having to pay for their own returns (31 percent) and delays in receiving a replacement product (25 percent).

Overall, while shoppers seem keen to shop online, companies need to re-invent how they manage the customer journey, especially when it comes to using smarter (not necessarily more) technology to manage deliveries and returns.

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