There is a healthy appetite for cross-border e-commerce in the Asia-Pacific (APAC) region. It’s no surprise since internet penetration rates and smartphone usage continue to soar here, making it ripe for online shopping. However, cross-border e-commerce merchants should understand that APAC is comprised of 48 distinct individual countries with different cultures, languages, and economics. Not all countries have the same expectations of the online store experience. But as our own research shows, one thing is clear: to be successful in APAC, cross-border retailers must have a robust, reliable and cost-effective way to deliver items to their customers.
Let’s take a look at four key countries in the APAC region:
- China. With a population of nearly 1.4 billion, China is a serious cross-border e-commerce contender based on the sheer size of its potential customer base. But its geographic size can make it a difficult market for cross-border merchants to navigate, especially when it comes to logistics. Still, China holds significant potential, particularly in retail categories like luxury, beauty, personal care, and apparel. Chinese consumers have concerns around the cost of shipping from retailers based outside of the country: 49 percent of Chinese consumers we surveyed who have made a cross-border purchase before said shipping is “too expensive” for them. Delivery speed is also an influencer over purchase decisions, with 40 percent of prior cross-border shoppers stating that delivery times are “too slow.”
- India. With some of the highest rates of internet penetration and increasing smartphone ownership in the world, India is poised for rapid e-commerce growth. Being able to communicate with customer service is more important to Indian consumers, with 22 percent of shoppers who’ve made prior cross-border purchases citing this as a must. And, like China, both the cost and speed of delivery are top concerns. To succeed here, e-commerce merchants should offer customer service options that are easily accessible. They’ll also need strong relationships with local last-mile carriers to ensure affordable, reliable delivery.
- Japan. Consumers in Japan are interested in high-quality products from cross-border retailers, particularly luxury items, apparel, fashion accessories, and shoes. For cross-border retailers, it’s vital to get shipping costs under control in this market: more than half (53%) of consumers surveyed said the high cost of shipping is a barrier to making online purchases. This market is also very sensitive to retail websites that aren’t in their native language. In fact, 74 percent said they’re either “somewhat unlikely” or “very unlikely” to buy from a cross-border retailer if their website is not in Japanese. Well-executed localization – including real-time currency displays – can make or break your efforts in Japan.
- South Korea. Our research shows that in this market, it’s GenX shoppers between the ages of 45-54 that have a higher rate of shopping cross-border – more so than millennials. There’s also a wider gender gap than most of the other countries: 46 percent of male consumers said they were likely to give cross-border online shopping a try, compared to 36 percent of women. Like the other APAC markets we’ve covered, the top barriers to cross-border shopping in South Korea include worries over shipping cost and delivery speed. According to Export.gov, a dominant trend among South Korean consumers is to window shop at physical stores to view and touch items and then purchase goods at online retail sites after searching around for the best deals. With this in mind, cross-border retailers who don’t have a brick-and-mortar presence in this country will need to include detailed product descriptions and several images on product detail pages for consumers to gain a better sense of the products.
If APAC market entry is on your list of goals for 2020, a well-planned shipping and logistics strategy is crucial. This will require a strong understanding of some of the more common challenges around logistics in each country, as well as customs requirements and any relevant taxes and duties.
For more information about what it takes to break into APAC successfully, get in touch with Flow’s cross-border e-commerce experts.