The Asia-Pacific region has seen strong eCommerce growth over the past few years. Having overtaken the US market in 2015, it is now considered the backbone of the global eCommerce industry.
Forrester Research predicts that a fifth of total sales in the Asia-Pacific region will take place online by 2021. This equates to USD 1.4 trillion being spent online by 2020 – double from 2015’s expenditure of USD 773 billion.
China is the largest eCommerce market
China is responsible for the success of the Asia-Pacific market. In 2016, Chinese consumers spent USD 681 billion in online retail sales, and this is set to grow as the marketplace evolves.
Only this year, during the 11:11 Festival (November 11), Alibaba Group Holding generated USD 30.8 billion of gross merchandise volume, an increase of 27% on a year-on-year. The spending volume has for years eclipsed Cyber Monday in the US for online purchases made on a single day. In total, over 1 billion parcels were generated by the Alibaba ecosystem within the 24 hours. The first 100 million parcels were delivered in an average of 2.6 days.
Singles’ Day, also called “Double 11”, is the world’s biggest online sales event, surpassing the sales of US shopping holidays Black Friday and Cyber Monday combined.
India is the fastest growing eCommerce market
China may be the biggest market, but India is the fastest growing. The Indian eCommerce market is expected to reach USD 64 billion by 2021 by growing at a five-year compound annual growth rate (CAGR) of 31.2%.
However, Satish Meena, a forecast analyst at Forrester Research states that it will take more than 10 years for India to reach the current level of the US and China markets. This is because Internet and eCommerce integration faces particular challenges in India. Though the population sizes of China and India are relatively similar, the number of Indians who have access to the Internet, and the disposable income to shop online, is much lower. Therefore, fewer of the Indian population can participate in eCommerce activity.
However, India has its advantages in the eCommerce market. Whereas China entered the market in the early 2000s – a period when the global economy was questionable – India entered just after 2010, when the GDP was showing healthy growth and disposable income was on the rise. This provides a stable basis for the Indian eCommerce market, and consumers are much more likely to spend money online.
It seems that online shoppers in India are much more accepting of using it to purchase items such as clothing and footwear than the initial adopters of eCommerce in other markets. This could be because cash on delivery (CoD) is prevalent in India, and many eCommerce sites practise no-questions-asked return policies.
India has benefited from huge VC investment into the eCommerce industry, perpetuating its growth and positioning it to eventually become a prominent and mature marketplace.
It is clear that the Asia-Pacific eCommerce market is buoyant and active. However, while China, Japan, South Korea and Australia are mature markets, India is still considered a fledgling market – albeit one that is growing rapidly. When India eventually comes to maturity, the Asia-Pacific region will be an even more prominent force in eCommerce than it already is today.