Asia-Pacific: Where digital wallets are getting fatter
Welcome to the “Asian Century,” where, according to recent research, wallets are becoming digital, commerce is going online and social, and super apps are paramount among consumers.
As the global leader when it comes to digital commerce, the Asia-Pacific region is the place to be for today’s brands and businesses, says the report “Digitalization in Asia: How One Region is Shaping the Rest of the World,” authored by Michelle Evans, Euromonitor International global head of digital consumer. Euromonitor is a market research company that provides intelligence on industries, companies and economies worldwide.
Significant factors driving Asia-Pacific’s digital growth, Evans says, are its expanding population and growing economy. By 2030, the region is expected to add 400 million people to the global population and $12 trillion to disposable income, (or 39 percent of the global increment). Add to that the region’s increasing number of internet users—as of last year, 51 percent of the total number globally, a figure that is expected to rise to 53 percent by 2030—and you’ve got a region that is expected to become the worldwide leader in digital commerce.
The report further emphasizes Asia-Pacific’s mobile-centric culture, citing data from Euromonitor’s 2019 Lifestyles Survey: 60 percent of the region’s connected consumers have used their mobile phones to purchase goods or services at least once a month. Chinese consumers, in particular, take the cake when it comes to mobile transactions, with 1.4 billion mobile internet subscriptions as of 2018.
The Philippines, along with Hong Kong, South Korea and Indonesia, have also adopted the “mobile-first” mind-set, with over half of these markets’ digital spend occurring through mobile, the report states.
Ironically, more advanced markets such as Singapore and Japan, are slower in making that mobile-first shift. According to the report, Japanese consumers are highly wary of the risks of sharing personal information online, therefore impeding growth of the country’s digital commerce.
Across the region, however, there are three major digital commerce developments: social commerce, super apps and digital wallets.
Social commerce pertains to how more Asian consumers are now engaging brands and making purchases through social media platforms. It’s a phenomenon that’s particularly more common among the Gen Z population, according to Euromonitor’s 2019 Lifestyles Survey.
It was also in Asia-Pacific where the “super app revolution” was born, according to the report. These are multifunctional apps that combine communication, lifestyle, social, financial and retail functions, giving the user a seamless experience. The report cites Indonesia’s Go-Jek, which started as a motorbike-hailing mobile app and has now branched out to other services—online food service (Go-Food), cargo deliveries (Go-Send), home cleaning (Go-Clean), massages (Go-Massage) and beauty treatments (Go-Glam). Singapore’s Grab is another example, as customers can now make cashless payments through its mobile wallet.
Digital wallets are another Asia-Pacific specialty. According to the report, over half a billion people in China use mobile payment channels such as Alipay and WeChat Pay for both online and brick-and-mortar transactions, while in Singapore, there are 27 different digital wallets.
Given such scenario, the report lists its prospects for the region in the coming years:
1.) China will remain the largest digital market in Asia-Pacific, but India and Indonesia will become new growth centers;
2.) In terms of industry, retail will still be the largest, with apparel and footwear as important growth areas and;
3.) Online food service order and delivery will be the key growth driver of the region’s digital commerce.
Ultimately, for brands to make an impact on the Asia-Pacific market, the report recommends two things: go mobile and be social.
“It is important to consider how consumers use their mobile phones within larger lifestyle choices. Companies must be mindful of the role that social plays in the life of connected consumers in Asia-Pacific compared to consumers elsewhere. Brands must have a strong social presence,” the report states.
