21 Jul 2021
Posted in Retail
APAC online retail sales penetration to reach 18% in 2025, forecasts GlobalData
With the COVID-19 pandemic still looming large, the ‘online mode’ has emerged as a default channel for browsing and purchasing products. Consequently, the online retail sales penetration in the Asia-Pacific (APAC) region continues to rise and is expected to increase by 6ppts from 12% in 2020 to 18% in 2025, says GlobalData, a leading data and analytics company.
According to GlobalData 2021 Q2 Consumer Survey, 60%* of respondents in the APAC were extremely/quite concerned about their physical fitness and health compared to 56%** in Q1. Consumers were reluctant to leave their homes with 58%* of respondents claiming to be extremely/quite concerned about visiting shops/stores due to COVID-19 risk. While some began to go out, 65%* of people continued to ‘work from home’ in Q2 2021. This led to an increase in their online presence with 87%* of respondents started/ continued to spend more time ‘online’ in general.
Ankita Roy, Retail Analyst at GlobalData, comments: “In Q2, consumers showed more likeliness towards ‘visiting stores’ compared to Q1 due to mass vaccination drives and a slowdown in virus transmission in several Asian countries. The percentage of consumers (85%*), who were extremely/quite/slightly concerned about visiting stores during March-May 2021 decreased from (87%**) during Q1, reflecting physical stores restore their relevance in the post-COVID-19 era. However, there will be a generational shift in the physical store formats and retailers will need to align their operations with wider industry shifts and make robust ‘in-store tech investments’ to match consumers’ demand.”
Marketplaces are also striving to improve customers’ online shopping experience by launching various technology-driven initiatives on their websites, aimed at enabling customers to make sound purchase decisions on online platforms. To highlight, Singapore-based Shopee, an online marketplace introduced a new platform ‘Shopee Premium’ that allows the shoppers to buy authentic premium products, sold directly by their preferred brands.
Ms. Roy continues: “As consumers have become more reliant on technology now, there are several technological components that retailers must use to enhance shopper journeys such as the launch of Shopee Premium by Shopee. The launch of this dedicated platform also considers the relevance of the direct-to-consumer channel which is preferred by consumers due to authenticity and price concerns. E-commerce retailers/marketplaces must integrate technologies driven initiatives on their websites to smoothen customers’ shopping journey and reduce the chance of order returns.”
Retailers are considering social commerce as a booming stream of revenue. While the trend might be in its relative infancy it holds huge potential in the future. To highlight, Pinduoduo, an online grocer in China, is known for promoting the neighbourhood group-buying model, where shoppers group together to buy products at huge discounts.
Ms. Roy concludes: “In the Q2 survey, almost 66%* of respondents reported that they are socializing virtually with friends/families and as the lines between social media and online marketplaces blur, social networks are strategically placing buy buttons within their messaging apps, photos, videos, and programmatic ads to capitalize on this opportunity. In addition to collaborate with social media networks, retailers must try adding interesting components to interact with customers, garner more subscribers and promote new content as social commerce is expected to become highly popular in the future.”
*Data taken from GlobalData’s survey of 6,000 APAC consumers, aged 16+ conducted in early May 2021
**Data taken from GlobalData’s survey of 6,000 APAC consumers, aged 16+ conducted in early February 2021