Five challenges stopping businesses from scaling payouts globally
The rise and rise of mobile commerce in Asia Pacific
Mobile phone usage across Asia Pacific (APAC) is booming. Research from GlobalWebIndex shows that smartphone use increased by 70% in 2020 year-on-year across the region — in China, that figure was 86%.
And consumers in the region are increasingly using their phones as a primary method to shop with their favorite brands.Our new research finds that 63% say they most commonly shop within a mobile app, and 35% say they most commonly pay using digital wallets.
APAC's relatively young demographic — almost a quarter are under 15 years old and only 9% above 65 — together with high levels of affluence and digital literacy, suggests the rise of these mobile natives, and by implication of mcommerce, is only set to increase.
For merchants, this opportunity can quickly become a risk. Try to shortcut your way to success by simply cannibalizing a desktop experience for mobile, and competitors will soon take your market share.
So, where to start? Having worked in payments and ecommerce across the region, here are my top tips to help merchants get their APAC mobile strategies right.
1. Don’t make assumptions about consumers
Businesses entering APAC for the first time can fall into the trap of treating the region as one. Generalizing customer personas and behaviors is a typical mistake.
But with a population of 4.3 billion, split across 13 countries and more than 30 languages, there's a lot of disparity. Even markets often considered similar — like Hong Kong and Singapore — turn out to have less in common, and where countries are different, those can be even starker than you might expect.
For example, our data shows that 88% of Indonesians do their online shopping most frequently via a mobile app, compared to 41% in Japan. This means your shopping (and checkout) experience must be tailored to an app instead of a website.
Understanding how to communicate with customers across APAC takes time. The region is a complex mix of nationalities, cultures, languages and preferences. The more a merchant can serve up a mobile experience that feels personal to the shopper, the more chance of success. Nothing beats having teams on the ground who can understand the delicate nuances of each market and how to create hyper-localized experiences.
2. Take advantage of social commerce
Social commerce — when merchants use social and online media as a seamless step in the mobile buying experience — is becoming big business across APAC. In China alone, revenues from social commerce were estimated to be US$6 billion. That represented a 66% increase over the previous year.
Our data shows that regions which saw social shopping take off in 2020 were also most likely to see the highest spike in the purchase of cosmetics and fashion products.
This shouldn’t be surprising, suggests Michael Flitton of investment management firm Cerno Capital in our report. “Live streaming’s confluence of social factors fuels impulse shopping. Conversion rates for categories susceptible to impulse shopping, like beauty or clothing, are significantly higher on live streaming compared to conventional ecommerce.”
The lobster lesson
SHOPLINE COO Fiona Lau describes how they helped a merchant selling live lobsters. “The lobsters were shown on Facebook Live. Consumers wanting to buy a lobster would message the merchant in the chat with a ‘+1’ and follow-up with any questions. The merchant would then ping a link in the chat, which takes the consumer directly to a slick and secure payments page.”
What’s striking about this approach is that it’s not actually hinging on a clickable payment feature within the social app. The transaction is happening through a nifty redirect to SHOPLINE. But from the consumer perspective, it’s an all-social purchase, which makes it a very human-centric experience throughout.
See how Checkout.com enables SHOPLINE to deliver a world-leading, out-of-the-box ecommerce solution for its customers across Asia.
3. Leverage the popularity of digital wallets
Though payment preferences vary country by country, a uniform trend is the rise of digital wallets. In mainland China, Australia and Thailand, digital wallets are now the most popular way to pay. So merchants with designs on APAC need to have a digital wallet offering in their mobile payment processing solution.
The rise in digital wallets is down to several factors. For traditionally ‘unbanked’ populations, they present a more immediate benefit and so have been adopted faster. There’s also been the ‘leapfrog effect’, where fast-growing economies are skipping past cards in their move from cash to digital payments.
The popularity of digital wallets is now coming full circle, with payment systems that were designed for a specific app being repurposed as standalone solutions for broader use. These Neo-Banks include BigPay (which began as the payment and loyalty card for AirAsia) and wallet like GrabPay, which you can now use to buy everything from chicken and rice at a local hawker market to the latest line of lipstick at a Sephora store.
That said, merchants shouldn’t go all-in on digital wallets. APAC is the world’s largest market for card transactions, and the big card networks such as Visa, Mastercard, JCB and UnionPay still dominate.
4. Consider an embedded payments strategy
An alternative to off-the-shelf digital wallet providers or Super Apps is to build your own payment solution. Only a few years ago, this may have seemed a challenge too far. But now, with the growing popularity and accessibility of open banking solutions, more and more merchants are doing just that, driven on by the dream – or necessity – to make their payment experience native to their brand. Owning the customer and their payment experience is a powerful use case.
No surprise then that there’s been a rise in demand from brands looking for partners that can help them build and integrate payments into their core product offering. A key criteria is a modular platform, allowing merchants to enable new features and capabilities a la carte. The scope of the platform is also crucial. Increasingly, merchants are looking for end-to-end solutions that cover the payment experience and ‘back-end’ requirements such as compliance, fraud, and risk management.
The payment influencer
Neelofa — a Malaysian actress, television presenter, model and entrepreneur — has created an embedded payment system for her influencer app, ‘TheNoor’. Her latest move in creating an entire financial ecosystem around content that combines personal brand, fashion, culture and religion.
The right partner is core to delivering the mobile experience expected by consumers in APAC
Mcommerce is all about the experience, and people expect easy to navigate embedded checkout experiences as a minimum now. And as more brands want payments to be integrated into their core product offering, merchants should look for payments providers with a modular product that they can pick from like an a la carte menu.
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