While some Asian country economies may be slowing down, the health of the online retail markets across the continent is booming.
According to a recent report from Forrester, as reported on by ZDNet, total eCommerce revenue for China, Japan, South Korea, India and Australia is projected to nearly double in the next five years, from $733 billion in 2014 to $1.4 trillion by 2020. That same report goes on to detail how these five Asian online economies have already outpaced the combined online retail markets in the U.S. and all of Western Europe, with China and India ranking as the two largest and fastest-growing markets worldwide.
The ZDNet article goes on to point out that the Chinese market already surpassed that of the U.S. in 2015, and China remains the world’s largest eCommerce market, despite seeing its overall economic growth dip below 7 percent for the first time since 2009.
“While the days of staggering year-over-year eCommerce growth in China are gone,” wrote Lily Varon, lead author of the Forrester report and analyst for eBusiness and channel strategy, “current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea.”
Varon also went on to project that China would continue to lead the region’s market growth, expanding to be nine times larger than Japan’s $122 billion market in 2020 and 17 times larger than South Korea’s $65 billion.
India is also projected to see online sales expand by five times, fueled by a rapidly increasing number of online shoppers entering the market and per capita online spend continuing to increase. However, in the case of India, Varon noted that the country’s underdeveloped logistics, “challenging” connectivity, as well as a traditionally cash-based culture, would pose significant challenges to online retailers looking to grow the online India market.
The Forrester report goes on to note an important and defining trend across the region: the dominance of Web-only retailers, such as Rakuten and Amazon in Japan; Taobao, Tmall and Jingdon in China; and Flipkart and Snapdeal in India.
“Consumers have flocked to online pure-plays rather than their traditional retail counterparts,” Varon wrote. “In very few markets in the region do traditional retailers hold any dominant position or even come close to competing with the Web-only giants.”
Having noted the significance of Web-only players, Varon shared that omnichannel functionality had not been as robust in Asian markets as it had in the U.S. or U.K. This, though, was starting to shift, as more traditional retailers start to make the move towards eCommerce in Asia. Australian retailers have been forced to play catch-up, with omnichannel offerings, such as click-and-collect, being adopted by global players, like TopShop and Zara, and helping to bring omnichannel services to the local market.