A guest article by Carine Low, Regional Head of Marketing & Communications, Asia Pacific, at Wirecard
It seems like it was only yesterday when we had the 11.11 Singles’ Day sales here in Asia, and now we are entering the last major retail event of 2019 – the 12.12 sales. These two events have transformed the retail landscape in Asia, giving merchants more opportunities to engage and draw in new audiences. Originally a spinoff of Alibaba’s 11.11, 12.12 was created for smaller merchants to enjoy the hype, without being overshadowed by bigger players in the market. Last year, Alibaba shipped 322 million packages on 12.12, a smaller number compared to the 1 billion packages on Singles’ Day.
Despite the popularity of 11.11 across Asia, the situation is slightly different in key Southeast Asia economies. A research study by Criteo reveals that 12.12 is the king of shopping festivals in Indonesia and Vietnam. In Indonesia, Southeast Asia’s largest consumer market, there was a 389% uptick in online sales during 12.12 last year, compared to 174% on 11.11. With 12.12 also a nationally celebrated festival in Indonesia that has fueled the growth of e-commerce, we can expect more record-breaking sales this year.
Rise of digital payment methods in Southeast Asia
An increase in broadband and mobile penetration around the globe, particularly in developing countries in Southeast Asia, has generated new waves of sophisticated shoppers – who demand a consistent and delightful shopping experience that encompasses both offline and online channels. This includes being able to pay through the platform and currency they prefer. Furthermore, according to a report jointly published by Google, Temasek, and Bain & Co, digital payments are showing double-digit growth in Southeast Asia, and are poised to be the payment method of choice for nearly one of every two dollars spent in the region.
Vietnam and Thailand are experiencing a boom in mobile payments as more people use e-wallets to pay for goods and services. A recent PwC report revealed that the percentage of consumers in Vietnam using mobile payments increased from 37% in 2018 to 61% in 2019.Therefore, to attract and retain customers, providing seamless checkout processes and payment methods to customers including mobile payment apps is now a must. Wirecard’s Global Shopping Survey also found that shoppers – 42% in Singapore – are less likely to shop in a physical store if it did not offer ways to pay via their mobile phones.
Over time, we can expect to see more diverse payment options,
and retailers must ensure that they are equipped with the payment capabilities
to keep pace and cater to consumer preferences.
Cross-border commerce and payments
According to Statista, cross-border purchases will account for more than 22% of global e-commerce by 2022. In fact, digital payments play a major role in shaping this cross-border commerce trend. By making the payment process seamless, offering locally preferred payment methods, and tailoring the checkout experience to local preferences and customers, companies can win the trust of global customers and increase cart conversions.
More importantly, this seamless and personalized experience needs to be consistent across multiple touchpoints. For instance, brands can consider borderless payment solutions such as the Wirecard Multi-Currency Travel Card which enables customers to pay easily in their local currency when travelling, either in physical card form or virtually as a smartphone app. The added security and convenience of the travel card enables users to enjoy carefree travel without needing to face any annoying foreign exchange fees.
With an industry-wide effort to enter China, companies are also working with global payment providers that can help them gain access to Chinese consumers. Wirecard recently announced a cooperation with Swiss Post to integrate Chinese payment methods into Swiss Post’s “Your Gateway to China” service. With this service, Swiss retailers can easily offer their products directly to Chinese consumers through major virtual marketplaces. At the same time, this will provide both buyers and sellers simple and convenient checkout processes, no matter where they are.
Catering to the needs of consumers
Consumers now expect personalization as part of the standard service they receive whether online or in physical stores. Retailers and brands that recognize the demand for choice and engage with consumers wherever, whenever and however they want to shop will be the ones to benefit. Our Wirecard survey found that there are differences in the way APAC consumers pay – Australians are most likely to shop in-store (81%), while mobile apps are especially popular in Hong Kong (59%) and Singapore (53%).
As the year comes to an end, stocking up and replacing big-ticket items such as furniture and electrical appliances is common. A 2018 global survey by BigCommerce found that the ability to finance a purchase would influence the ultimate decision of 45% of shoppers. Wirecard recently announced a partnership with IKEA Malaysia to launch its unique in-store installment payment plan, providing customers with the option to pay by installment without any of the usual hassle that comes with such financing. This boosts customer satisfaction and sales conversion for retailers, creating a win-win solution on both ends.
Driving the future of global payments
E-commerce sales are projected to account for up to 22% of worldwide retail sales by 2023, up from 14.1% this year, according to Statista. With much development potential for cross-border commerce and payments, brands should consider incorporating smart technologies such as artificial intelligence (AI) into their e-commerce and payment platforms.
AI can break down barriers and create more avenues for cross-border commerce. Meanwhile, emerging technologies like biometric terminals that allow users to pay with just the scanning of their hand or fingerprint can make cross-border commerce even more seamless without the need for multi-step authentication and international accounts.
The future of retail will be intrinsically tied to the development of emerging technologies that not only simplify the customer experience but also, perhaps more importantly, enhance it.
To fully realize the immense opportunities smart technologies can bring, brands need to continually evaluate their consumers’ purchase journey and look at ways in which they can continue providing value to new and existing customers.
Only by constantly innovating and providing a seamless consumer experience can retailers extend their offerings to a global scale and offer their customers a modern and innovative experience.