Ecommerce expansion in Asia – an opportunity for foreign firms?
For any company with aspirations of building a global brand and doing business in international markets, it's clear there are exciting opportunities waiting to be seized in Asia.
This is particularly true in the ecommerce space. Ecommerce activity has been increasing all over the world in recent years, but in Asian nations the rate of growth has been particularly strong. According to the latest State of eCommerce report from iPrice, 2017 was a "vital year" for ecommerce in south-east Asia in particular, with gross merchandise value of first-hand goods surpassing $10 billion, up from $5.5 billion in 2015.
One interesting indicator of how much potential Asian nations could hold for growing online businesses is the range of languages being used online. By comparing figures from 2015 with those from 2017, we can see a considerable spike in the number of internet users speaking Asian languages.
Exciting growth in the East
According to Internet World Stats, there were some significant trends and changes in the number of web users by language between 2015 and 2017, particularly where languages spoken in Asian nations are concerned.
The number of Chinese-speaking internet users increased by more than seven per cent, from 750.5 million in 2015 to 804.6 million in 2017. Over the same time period, the number of internet users speaking Malay/Indonesian – which is used in Malaysia, Singapore, Indonesia and Brunei – soared by 71 per cent, from 98.9 million to 168.8 million.
Compare these figures to the growth in online consumers using languages such as German and Russian – just one per cent and five per cent, respectively.
Furthermore, the data showed that internet penetration increased from 50.4 per cent to 55.4 per cent in Chinese-speaking countries and from 34.5 per cent to 56.4 per cent in territories speaking Malay/Indonesian.
These numbers highlight steady growth in the number of Chinese-speaking internet users in recent years and a sharper spike in the number of Malay/Indonesian speakers online. The latter trend suggests there could be some exciting opportunities opening up in emerging ecommerce markets in south-east Asia.
Demands and opportunities in Asia
China has grown into a vast market for ecommerce. In fact, it is now the world's biggest ecommerce market, according to eMarketer. Projections published by the data and research firm in July 2017 indicated that retail ecommerce sales in the country were on course to reach a value of $1.13 trillion over the course of the year.
The world's most populous nation is a hugely attractive prospect for brands with international ambitions. However, China is not an easy nut to crack from an ecommerce perspective, particularly for Western brands.
There are many unique characteristics and demands that foreign businesses must take into account before attempting to enter the Chinese market. For example, Google and Facebook – two of the most powerful technology brands in the Western world – are blocked in China. Baidu is the leading search engine, while WeChat dominates the social media space.
Businesses also need to be aware that China's consumer culture, typical online user journeys and purchasing methods are very different to those of Western nations.
Some south-east Asian markets could be more welcoming to foreign entrants. Unlike China, Singapore, Malaysia and Indonesia are all open to Google, providing a degree of online familiarity for Western brands. In July 2017, Amazon officially launched its Prime Now delivery service in Singapore, its first market in south-east Asia.
As some of the latest trends have shown, south-east Asia is going through a phase of growth and development that could give rise to lucrative opportunities for expanding businesses. However, success will depend on having a strong strategy for communicating with customers and building brand engagement.
Benefits of a language-based strategy
To stand any chance of ecommerce success in Asian markets, foreign firms need to devise bespoke strategies for engaging with customers via proven channels, building relationships and earning loyalty in specific countries.
This will prove particularly significant in China, which is completely unique as far as consumer habits, business communications and brand relationships are concerned.
An effective strategy will encompass many components, but the right use of language could prove to be one of the most significant of all. By working with a specialist language services partner and investing in processes such as localisation, your business can ensure it is communicating in a way that suits your target market. This requires not only choosing the right words, but using correct grammar, making appropriate cultural references and reflecting local nuances.
These could be the first steps towards forging customer relationships and achieving long-term success in markets that present unique demands, but also offer huge opportunity.
Image: fpdress via iStock