- Simone Preuss |
Total online retail revenue will nearly double in the Asia Pacific region from 733 billion US dollars in 2015 to 1.4 trillion US dollars in 2020, given a compound annual growth rate of 14.3 percent over the next five years. This is what global research and advisory firm Forrester found out, looking at trends in China, Japan, South Korea, India and Australia.
In its latest report, "Asia Pacific Online Retail Forecast, 2015 To 2020", Forrester tips China and India as the largest and fastest growing e-commerce markets, respectively, to fuel this growth, supported by Japan, South Korea and Australia: "Today, total online retail revenues in just five markets in Asia Pacific surpass the combined figure for online retail in the US and all of Western Europe."
Apparel, accessoires most in demand online
Even before consumer electronics, apparel and accessories is the largest category, amounting to more than 20 percent of all online retail sales in Asia Pacific. China is by far the biggest market, accounting for 80 percent of all online retail in Asia Pacific. "We expect it to become the first market to reach 1 trillion US dollar in online retail sales in 2019," states the report.
"China’s e-commerce market grows despite the economic slowdown. 2015 marked a global e-commerce turning point: China surpassed the US to become the largest e-commerce market in the world, but its economy also dipped below percent for the first time since 2009. While the days of staggering year-over-year e-commerce growth in China are behind us, current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea," writes Lily Varon, the report's lead author and analyst for e-business and channel strategy, on Forrester's blog.
The region's other big growth driver and its fastest growing e-commerce market, India, is not without its obstacles. "The smallest e-commerce market in our forecast, India’s online sales will grow by more than five-fold by 2020 as the number of online buyers and per capita online spending increase rapidly. However, in addition to underdeveloped logistics and challenging last-mile connectivity, India's cash-based culture still poses a challenge for e-commerce firms," sums up Varon.
In both countries, apart from an additional boost through investments by venture capital firms, growing smartphone penetration is powering online retail sales: Via mobile account, they made up 46 percent of total Asia Pacific online retail sales in 2015. According to the report, this percentage will grow to 69 percent by 2020.
In regards to the region's other three growth drivers, Japan, South Korea and Australia, have "all of the characteristics of a mature e-commerce market: high Internet and broadband subscriber penetration, a large percentage of online shoppers and high per-capita online spending", finds Varon. "But each market has unique characteristics that e-commerce leaders operating in these markets, or thinking about doing so, need to know and consider when crafting their offerings," she cautions.Image: Tim Reckmann / pixelio.de