For years now, the world has witnessed the breathtaking growth of e-commerce – particularly its B2C segment. Globally, B2C sales broke the US$1 trillion mark in 2012 and have not stopped expanding at an awesome pace since. Analysts believe that B2C e-commerce would grow by a massive 20% this year to hit US$1.5 trillion worldwide. The Asia-Pacific region has been the powerhouse of this phenomenal growth. Last year, the year-end holiday shopping season saw numerous record highs in B2C sales. This year’s holiday season would see online shopping continuing to ace retail sales across the region – clearly spelling serious implications for Asian retailers…
For quite a number of years now, the world has witnessed the breathtaking growth of e-commerce – particularly its business-to-consumer segment. Globally, B2C sales have grown in exponential terms – it breached the stratospheric US$1 trillion mark for the first time in 2012 and has not stopped expanding at an awesome pace since.
Analysts project that B2C e-commerce would grow by more than 20% this year to hit US$1.5 trillion worldwide. Not unexpectedly, the Asia-Pacific region has been the powerhouse of this phenomenon. The region is now considered the largest e-commerce market in the world – one that accounts for more than 45% of all online buyers worldwide and one that is likely to outspend its North American counterpart by US$40 billion this year.
Last year, the year-end holiday shopping season saw numerous record highs in B2C sales – many of which occurred in Asian markets. This year’s holiday season would see online shopping continuing to ace retail sales across the region – clearly a prognosis that spells serious implications for Asian retailers.
2013 online holiday retail sales: Amazing statistics
Online retail sales emerged as the shining star in last year’s holiday shopping season. Their statistics in the world’s e-commerce capitals, the US and China, were amazing and noteworthy.
IBM’s US Online Retail Holiday Shopping Recap Report 2013 stated that sales from the 2013 US online retail shopping season increased by 8.5% year-on-year in November and December combined. This was more than double the national average of the total US holiday retail sales growth of 4.1%. IBM also found that the use of mobile devices for online shopping had continued to soar – accounting for 35.8% of all online traffic and mobile percentage of sales managed to hit 17.8% for November and December combined.
If the US statistics were impressive, those of China’s B2C e-commerce last year were even more mind-blowing. Alibaba, China’s largest online shopping company, revealed a staggering record sales turnover for a single day anywhere in the world. The day was November 11 – the so-called Singles’ Day, symbolised by the four “lonely” 1’s of 11/11.
Alibaba, which owns such behemoth e-commerce sites as Taobao and Tmall, reported that it had a whopping number of 402 million unique visitors to its sites that day. The sites chalked up more than US$5.75 billion in online sales – a world record that surpassed by two and a half times the total of US retailers on their iconic Cyber Monday last year.
Two humongous online sales opportunities lie ahead before 2014 year-end – the Golden Week during China’s national day celebration in early October and the Singles’ Day on November 11
What is driving Asian e-commerce at such a breakneck pace? One key driver has been the equally breakneck growth rate in Internet penetration and in turn the online population size across the region. A recent report by the International Telecommunications Union revealed that 31% of individuals and 32% of households in the Asia-Pacific region had Internet access in 2013. These penetration rates were low relative to the more advanced markets of the EU and the US. However the sheer size of Asia-Pacific’s population translates into a massive 1.27 billion people actively using the Internet last year – significantly more than the EU and US combined.
2014 holiday online shopping set to rock again…
Analysts are generally in consensus that Asia’s holiday online retail sales this year would again be explosive in their numbers. Forrester Research projected that growth would be largely driven by five of the largest online retail markets in the Asia-Pacific region – China, Japan, South Korea, India, and Australia – which would see e-commerce sales rising from US$398 billion in 2013 by a compound annual growth rate of more than 16% in the years ahead…
Market observers also believe that mobile commerce growth would skyrocket further this year. However, in the case of social commerce, many market watchers think that it is early days yet. In the US last year, social networks including Facebook, Twitter, Pinterest and Instagram reportedly generated less than 2% of e-commerce sales during the 2013 holiday shopping season – somewhat flat compared with their 2012 figure.
The bottom line however is clear: the holiday online shopping is set to rock again this year.
The implications to Asian retailers are obvious: online retail has staked its claim as a formidable and fast growing retail channel. The brick-and-mortar retail format is however not totally obsolete and will continue to be a significant channel through the foreseeable future. However, the ball game has expanded to multi-channelling and cross-channelling. The current buzz is omnichannel retailing. Part 2 of this article will take a closer look at this new ball game – what are its challenges and opportunities for Asian retailers?