By Dany Naigeboren, Head of Analytics, APAC
For years it was accepted that the primary market for APAC e-tailers looking to expand was more APAC. That made sense and still does — but at the same time, things are shifting.
APAC’s digital commerce is by far the world’s largest, with eMarketer estimating that APAC’s digital sales are about three times greater than North America’s and nearly five times greater than in Western Europe. As such, APAC digital commerce companies will likely look first to places like mainland China, Hong Kong, Singapore, Malaysia, Australia, etc.
At the same time, however, APAC e-tailers are increasingly aware of the opportunities presented by the rest of the world. In many cases, success in initial trials leads to broader expansion. While efforts often start in the USA, many digital commerce companies are looking beyond. For many, the globe is the limit.
Strength at Home Leads to Success Abroad
APAC retailers are miles ahead of the international retail pack in some areas — and those skills and strengths often translate into a competitive advantage abroad.
- Excellence in last-mile delivery: While this is a problem many US-based and EU retailers consider an irritating hurdle, APAC retailers often view the challenge as a core part of the logistics and customer experience package. This leads to efficiency and creativity, a crucial element of the business.
- Product diversity: APAC’s retailers are becoming well-known in North America and Western Europe for an impressive breadth of choice based on their data-driven product creation and expansion approach.
- Live-streaming / Live-selling / Short-form videos: Looking ahead when it comes to selling via streaming and easily digestible short videos, APAC retailers’ online influencer savvy means they’re seen as fresh and innovative.
Distinct Audiences Help APAC Retailers Stand Out
Live-selling and short-form videos aren’t just good for APAC retailers’ brands; they also target specific audiences that homegrown retailers in the US and Western Europe often struggle to reach effectively.
APAC digital commerce merchants are especially successful with a young demographic that consumes video content by preference and appreciates wide choice and convenience. APAC retailers who have seen the most significant success internationally are typically those who lean into this valuable market, often underserved by established domestic brands that haven’t yet learned to speak their “language.”
Connected to this is that marketing remains critical for success regarding APAC retailers’ international expansions. This is a powerful tool and most impactful when used with protections against promotion abuses that are sensitive to the value of the customer and individual retailers’ policies and priorities.
Differences Can Be Dangerous
Of course, while some of the things that make APAC retailers different help them to stand out abroad from a domestic crowd, other differences can lead to challenges that must be overcome for sustained success. These include:
- Mobile is less dominant: Even within a young demographic, mobile commerce is less prevalent outside APAC, meaning a desktop experience remains key. For example, while Forter’s data shows that roughly 20%-25% of purchases within APAC are from computers, it’s around 50% outside APAC. Retailers need to remember to ensure that the solution providers they use can easily handle all devices and variations in experience and join the dots between a user’s constantly evolving journey — no matter which device they use at any given time.
- No superapps: While so ubiquitous in APAC that they are taken for granted by consumers, superapps are absent in much of the rest of the world. Retailers must adapt marketing, selling, and especially payments strategies in response — often done most successfully through partnerships with marketplaces and payments experts.
- Fragmented payments ecosystem: Even looking only within the USA, the payments ecosystem is exceptionally convoluted and complex. Broadening the lens to include the rest of North America and Europe, it becomes extremely intricate. Retailers must navigate these complexities with regard to both regulatory requirements and an emphasis on smooth customer experience, something sites like Temu are using to build credibility and loyalty.
- Fraud and abuse challenges: Fraud and abuse are distinctively different outside APAC, meaning retailers must rethink their strategies. What’s most important is to ensure that efforts to prevent fraud and abuse don’t detract from the customer experience but instead form an integral part of a smooth, delightful user journey.
APAC Retailers: Gearing Up to Take the West By Storm
APAC retailers who prepared well, leveraging their unique understanding of key demographics and marketing techniques and partnering with strong providers who can help them navigate the payments, fraud, and customer experience landscapes confidently and successfully — have already seen incredible results.
Up to 80% of revenue for domestic APAC retailers who sell to the rest of the world comes from the western markets. With the right partnerships, these companies can ensure 100% automated fraud decisions for excellent customer experience while at the same time reducing declines by up to 70%.
The trend of APAC retailers branching out to the rest of the world is gathering pace — and it’s exceptionally exciting to watch.
