The COVID-19 pandemic had a significant impact on lifestyle-related behavior, and changed the way people purchase products and services. With people spending more time indoors, shopping in the real world has slowed its pace, meanwhile, eCommerce platforms have been reaping the rewards.
Ecommerce has become one of the fastest-growing industries in Asia-Pacific (APAC) in 2020 that not only survived but also thrived in the lockdowns imposed by most countries. Moreover, the region is continuing to see major expansion in 2021 as well. Ecommerce is expected to grow at a rapid rate of 8.2% between 2020 and 2025 in this region. This is significantly higher than in the USA and Europe, where eCommerce is projected to rise at 5.1% and 5.2%, respectively.
Asia-Pacific remains the largest market for retail eCommerce with digital sales amounting to nearly $2.992 trillion in 2021. Digital retail sales are estimated to be more than three times greater than North America this year, and nearly five times greater than Western Europe.
China remains in the lead and is the No.1 eCommerce market by a large margin. It is projected to account for a remarkable 52.1% of all retail eCommerce sales worldwide this year, outpacing the US’s 19.0%.
As eMarketer predicts, India will be the fastest-growing market in 2021, despite the continuing influence of the pandemic. India has a huge potential for eCommerce growth as more retailers launch or expand their online presence. It is expected that digital sales will leap 27.0% this year in India.
Ecommerce is on the rise in Indonesia as well. 73 million Indonesians spend around $20.3 billion on online purchases throughout the year. At the same time, 50% of the population is under 30 years old, spending significantly more time on their smartphones, so the potential for eCommerce growth is huge.
Aarki recently delivered a successful eCommerce campaign in APAC. The campaign registered incredible performance in a short period. Due to the impact of Aarki’s machine learning models and creative optimization, it generated a 45.46% increase in conversion rate (CR) and a 40.46% decrease in the cost per install (CPI). The campaign also saw a 19.42 % decrease in cost per reactivation (CPR).
Examining the campaign performance by country, we saw improvements for all metrics in Indonesia, the Philippines, Singapore, and Malaysia. Specifically, we had a double-digit decrease in CPI and CPR. Click-through rate (CTR) and CR also improved over the course of the campaign.
Wondering what upcoming eCommerce trends to expect for 2021 in APAC?
Let's review them together.
4 eCommerce Trends to Watch Out For in 2021
1. Rising Middle-Class
The growing middle-class is making a significant contribution to the growth of eCommerce across APAC. In 2020, an estimated 2 billion Asians were members of the middle-class and that number is set to increase to 3.5 billion by 2030 with China, India, and Indonesia experiencing the greatest growth. The middle-class undoubtedly drives higher levels of economic growth as millions of Southeast Asians ascend from poverty.
A strong middle-class provides a stable consumer base that drives productive investment for marketers. Moreover, a growing middle-class population, coupled with higher internet and mobile penetration, is the key source of this growth. Asia-Pacific stands out with skyrocketing smartphone adoption rates that makes it one of the largest mobile markets in the world. Mobile devices are becoming the primary channel of engagement for consumers during their purchase journeys, and that’s more great news for marketers. As Statista states, the mobile internet user penetration in the Asia-Pacific region was at 42 % in 2020 and is forecasted to reach 52% in 2025. Moreover, Southeast Asia was the region throughout APAC which had the highest internet penetration in 2021 at 69%. In comparison, the internet penetration in Southeast Asia was 31% in 2020.
2. The Dominance of the Online Retail Marketplace
As a result of the pandemic, many people in APAC started turning to eCommerce sites to fulfill their retail needs - many for the first time. For instance, 32% of Indonesians during lockdown said they hadn’t previously made a purchase on any eCommerce platform.
Even though many countries have come out of lockdown, the search interest in eCommerce sites hasn’t slowed down. This shift to online shopping is more than a short-term response to the pandemic. The new buying behavior of customers is driving even traditional retailers to take advantage and move online. Many shops are physically confined to a local market and moving online gives them increased visibility worldwide, as well as providing a vehicle for customer engagement. Keeping in touch with target audiences and receiving feedback from customers is much harder with a traditional brick-and-mortar only business.
3. More Short-Form Video Content
Short-form video content is exploding in APAC. Driven by the pandemic in 2020, the region experienced a seismic shift towards digital, and cemented its position as a mobile-first consumer economy. Many brands began to focus on building a strong video content strategy, realizing that this is the most efficient opportunity for them to engage with their target audiences.
The short video content is highly relevant. For instance, Chinese people are becoming more time-poor and the short video format adapts perfectly to their lifestyle. It can be accessed at home while doing housework or on public transport while commuting to work. As stated by Statista, the number of monthly active users of short videos in China amounted to 872 million as of the end of 2020. On average, Chinese internet users spent about 42.6 hours on short videos each month during last year.
4. Digital Payments are the Gateway to eCommerce Success
The impact of COVID-19 has drastically changed the retail landscape. Before the pandemic, few consumers felt comfortable handing over their credit card numbers to an online retailer. But nowadays people don’t mind transacting online. The shift to eCommerce occurred across every country and credit/debit cards have become the main form of payment.
Cash-free payment transactions are growing rapidly in APAC, and are outpacing the rest of the world. Consumers in Asia-Pacific are demanding completely cash-free transaction methods that eliminate the need for human contact. The digital payments market is growing at a rate of more than 30% a year in APAC. The region is the driving force behind the 11% increase in global payments revenues, contributing nearly half of that value.
Check out this article to gain more insights on creative strategies for APAC as well. If you're interested to learn more about Aarki’s services, drop us a message here.