Retail in Transition: Future E-Commerce Opportunities in Asia Pacific and Australasia

June 2021

The digital revolution has been rewiring retail for years. The COVID-19 pandemic accelerated this transition as e-commerce became the default setting for many homebound consumers. The crisis-inspired surge in e-commerce is leading to a permanent shift in retail, creating both new challenges as well as new opportunities for retailers and consumer brands alike. This report explores those opportunities and challenges in the Asia Pacific region, including Australasia.

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Key findings

This region is an e-commerce powerhouse that will drive global absolute value growth

E-commerce in Asia Pacific and Australasia stands as the most dominant region with significant unmet opportunities in 2021 and beyond. To put that into perspective, this expansion in the region will account for more than 45% of the global absolute value growth in the 2020-2025 forecast period.

China continues to be the growth engine in the region

China is the largest and fastest-growing e-commerce market in Asia Pacific and Australasia. The market alone accounted for 64% of the absolute value growth in Asia Pacific and Australasia in 2020 and will continue to grow at a CAGR of 7% by value during 2020-2025 and more than USD99 billion in unmet e-commerce opportunity, according to the Euromonitor E-commerce Readiness Model.

Mobile will drive the growth of digital purchases in the region

Mobile is quickly becoming a popular device of choice replacing tablets and laptops for consumers when shopping online. Even during the pandemic, consumers have been increasingly turning to mobile to keep them engaged. With the evolution of new shopping channels such as livestreaming services, usage of mobiles for shopping is expected to grow further.

Digital trends will continue to cause upheaval in the e-commerce market

The retail industry’s traditional wholesale model has been turned on its side due to the emergence of new business models and channels such as marketplaces, subscription services and direct-to-consumer brands. E-commerce is here to stay, and it is vital to stay current with all facets of the digital retail landscape.

Addressing fundamental flaws in e-commerce is important to drive the future of the market

Consumers in Asia Pacific and Australasia have elevated consumer expectations and in this increasingly crowded and hyper-competitive e-commerce market it will be vital for retailers to address key challenges such as fulfilment, data privacy and shopping experience to prime themselves for future e-commerce success.

Introduction

About the report
Key findings

E-commerce Emerges as the Default Setting

E-Commerce Emerges as the Default Setting
Although more mature, Asia’s e-commerce market is buoyed by the crisis
Continued growth in region driven by global e-commerce leader China
Case study: XSYX rethinks last mile via community group buying model
Category spotlight: A pparel and footwear continues to lead
Case study: Lazada’s LazLive as part of “shoppertainment” strategy

How Shopping Behaviours Continue to Evolve

How Shopping Behaviours Continue to Evolve
Digital purchases using personal computers witness subdued growth
Mobile-driven purchases continue to see an uptick in user base
Consumer spotlight: older generation adapt to technological shifts
Shopping behaviours also evolve in other ways as a result of the crisis
Companies focus on last mile to meet growing consumer expectations
Case study: Indian government strengthens rural delivery with eStore

Identifying e-commerce Growth Opportunities

Identifying E-Commerce Growth Opportunities
Identifying the markets most primed for sustained e-commerce growth
E-commerce growth possible through optimisation rather than expansion
Food and drinks e-commerce shows significant opportunities
Favourable conditions in South Korea’s e-commerce landscape
Case study: Coupang uses vast logistics network to allow faster delivery
E-commerce market expected to expand by USD1 trillion by 2025
Grocery e-commerce to drive further growth in the region
Case study: Coles Australia makes it easier to buy groceries online

How to Win in Asia Pacific and Australasia

How to Win in Asia Pacific and Australasia
Three countries to watch in the region for e-commerce development
Key opportunities
Key challenges still to overcome
Key takeaways about e-commerce in Asia Pacific and Australasia
Recommendations for how to win in retail’s digital-first era
What to consider when evaluating your e-commerce strategy
Learn more about how to win in the digital-first era

Appendix

About the Digital Consumer Survey and Voice of the Industry: Digital Survey
About the E-commerce Readiness Model

Retailing

Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.

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