The world has steeply moved from web commerce or e-commerce to the mobile-commerce landscape. With a high rate of mobile penetration and ease of data availability, retailers are trying to get more out of mobile commerce because of the broader audience, especially in the Asia-Pacific (APAC) region. The total global market for digital e-commerce is $3.1 trillion. And a little bit more than half of that, 1.6 trillion, is in APAC.
The region has a high penetration of the internet, as compared to the West, which creates more opportunities for the m-commerce business. But given a slow growth of the economy, cross-border customs, privacy policies and geo-political tensions, how would m-commerce be affected in APAC? What can be the factors for the push/pull of the same market?
Speaking at ExecConnect, an event hosted by Criteo at Thailand’s Chiang Mai, a panel moderated by Alban Villani, Regional MD of Criteo SEA-Pacific, Hong Kong and Taiwan, discussed how the APAC region is moving from e-commerce to mobile-commerce terrain. The panel, including Simon Baptist, Chief Economist, The Economist Intelligence Unit; Hitesh Malhotra, Chief Marketing Officer, Nykaa, and Duc Pham, Deputy Director of Marketing of Sendo.vn, talked about the current marketing scenarios of their respective markets, including India, Japan and Vietnam.
Malhotra, sharing the Indian scenario, said language and online payment system can be the key drivers of m-commerce. India is a massive $1 trillion buying economy with 220 million smartphone users but just 5%-6% of total retail is happening online. YouTube users in India are kind of synonymous with smartphone and app users. The platform is leading the race in terms of highest adoption by people by the virtue of having multi-language content. So the presence of users on apps in India is driven by language in terms of reaching out to them.
Malhotra shared that in the next few years, the number of online users could go up if retailers are able to generate content in more languages with a technology enabler that gives people language options with just not a simple translator but even gets the contextual aspects of it.
He added, “Users trust the app but they don't trust the online payment systems. If something can replace the virtual currency, it could be a game-changer by getting that 100 million more people to transact online. I think it's just a context of a language and payments, which can see this explosion of mobile commerce.”
Malhotra said the traditional working way of banks and payment apps leaves blockchain as a good option to take over the future payment system in India.
The spokesperson from en-japan discussed how the travel and restaurant sector is growing at a rapid scale in Japan, which gives companies a good opportunity to experiment with. Given that 90% out of the entire internet users spend their time on phones, mobile commerce will grow in the upcoming years in Japan.
Sharing Vietnam’s market conditions, Pham said the cheap price of smartphones has led to an upsurge of social networking and entertainment apps. Applications such as TikTok are growing faster. Live streaming is one behaviour users are really getting into.
Factors leading to ‘slowbalisation’ of m-commerce
Given the extent with which the governments and countries are getting stricter on their customs enforcement, with tax borders, privacy policies and the US-China trade war, private companies are finding it difficult in establishing themselves cross borders.
“Seamless transactions and moving goods and services across borders probably is not going to happen. We already had the era of one global internet. Governments are going to regulate more, with geopolitical tensions going to cause the separation. The question is just how far it goes,” said Baptist. He added that in five to six years, data rules, privacy rules, customs and regulations at borders would leave an impact on m-commerce business on the ground.
Pham and Malhotra agreed on how AI and VR in mobile applications would lead to a faster consumption and ease in m-commerce.
What after m-commerce?
The world has seen e-commerce, and then m-commerce. What could be the next after this?
Malhotra shared how social selling can be the next big next revolution, which is kind of visible in some Southeast Asian countries, including China, but not in India. He said communication, entertainment and selling will become one ecosystem in future.
He explained how the ban on YouTube or Facebook or Instagram in China had led a lot of retailers to include entertainment or the social selling portion inside apps and with user-generated content on one side and availing of the selling option on the other side.
Currently, there is a separate ecosystem of influencers, driven by Instagram or YouTube, but in future, social selling with entertainment, recommendations and influencers will dictate the market. He said anybody who would get this strategy will probably take away 60 to 70% of the market share in any category in India.
Baptist said given the conditions of the undeveloped and fragmented retail market in India, it presents a perfect opportunity for m-commerce business to grow. He said India can take over the APAC region in the upcoming years after China. He added, “In India, retail is very fragmented with a lot of workers with low salaries. That's what helped m-commerce take off in China as well, because the delivery problem can be solved by lots of people that could deliver goods.”