Consumers tend to tighten budgets in the face of economic uncertainty and look to get the best value from their everyday purchases. Tech-savvy Asian consumers utilise online shopping platforms for value visibility through price comparisons and online reviews before purchases.
Technology is set to play a transformational role in providing a seamless online experience and enabling consumers to differentiate products in a personalised manner. In this article, we will be exploring consumer trends, including lifestyle and digital trends that are set to most impact e-commerce in Asia Pacific during the year.
Asia Pacific value hacks through online shopping
Asia Pacific has the highest savings ratio compared to other regions globally, and it is expected to increase to 25.5% in 2024, higher than pre-pandemic levels. This shows that Asia Pacific consumers have more cautious attitudes towards consumption and are more risk-averse. In fact, 74% of Asia Pacific respondents were concerned about the rising cost of everyday items, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023. Considering current economic headwinds, Asia Pacific consumers are becoming Value Hackers to stretch their wallets without compromising on quality.
As Asia Pacific consumers become increasingly aware of value for money in 2024, this is likely to result in greater use of digital platforms. Online shopping provides better information symmetry with price comparison and individual reviews, making the channel increasingly significant, going forward. A growing number of Asian consumers are expected to use digital platforms to hunt for the best deals and outsmart retail through online channels by saving money. In fact, finding the best price was the top online shopping motivation for consumers in this region, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023.
This further underscores the growth potential of e-commerce in Asia Pacific. The region’s e-commerce market is expected to reach a value of USD2.0 trillion in 2024 at constant prices (ie after stripping out the impact of inflation), contributing to 47% of global e-commerce sales. Recording an 8% CAGR from 2023 to 2028, e-commerce sales are expected to outperform overall retail sales in Asia Pacific over that span (4%).
Intuitive E-Commerce experiences to empower Value Hackers
As consumers in Asia Pacific turn into Value Hackers and seek better online offers and shopping experiences, emerging technologies such as augmented reality (AR), the Internet of Things (IoT) and generative AI (GenAI) offer opportunities for e-commerce players to completely transform the shopping experience, leading to one that is more intuitive.
GenAI chatbots can offer personalised interfaces that respond to and meet consumer needs based on their query on digital platforms, giving rise to another trend – Intuitive E-Commerce. By enabling consumers to find the best buy in terms of price and attributes, GenAI will empower Value Hackers with its ability to integrate predictive analytics and personalised recommendations. Alibaba has integrated generative AI-powered personal assistant, Taobao Wenwen, into its e-commerce platform, Taobao. The tool empowers users to refine searches by asking more pertinent questions and providing relevant product suggestions in diverse formats such as text and short videos. This forms part of a broader roll-out of AI-powered tools across Alibaba’s ecosystem as the company seeks to be “user-first” and “AI-driven”.
India’s fashion e-commerce giant, Myntra, introduced MyFashionGPT – a ChatGPT-powered feature – for enhanced product discovery. According to the company, this has not only translated into higher conversion rates, but also a greater number of categories that consumers have made purchases from as they explore a complete look across products. Other Asian e-commerce giants have launched similar tools, such as Lazada Group’s LazzieChat in Singapore, the Philippines and Indonesia, and Naver Corp’s HyperCLOVA X in South Korea.
These developments are expected to strengthen as 44% of professionals in Asia Pacific believe GenAI will impact their business over the next five years, with 47% stating that their company plans on investing in the technology
Source: Euromonitor International’s Voice of the Industry: Digital Survey 2023
The prospects of investment in GenAI are non-debatable for Asia Pacific, especially as China bets on AI for economic growth and technological advancement, with other regional counterparts such as Japan, South Korea, Singapore and India actively developing AI capabilities.
Emerging trends likely to favour marketplace models in Asia Pacific
Seeing the opportunity for businesses to leverage technologies such as GenAI to offer an intuitive e-commerce experience and wider choice curation, it is important for businesses not to forget the high cost of implementation associated with AI technology. This is a key barrier for smaller players in Asia Pacific in being able to develop their own GenAI capabilities.
Hence, as mostly large-sized players have both financial and human resources to invest in these technologies, smaller players wishing to remain competitive in the e-commerce channel would greatly rely on leading e-commerce marketplaces. This would lead Asia Pacific’s e-commerce landscape towards a consolidation trend.
In conclusion, as technologies such as GenAI allow risk-averse and value-conscious Asia Pacific consumers to seek better value products on e-commerce platforms in an intuitive manner, the financial resources and talent pool of large-sized players will lead development of new e-commerce experiences in Asia Pacific, featured by an intuitive user journey and wider choice availability for the consumers in the region.
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