There are still people in 2018 who think of Asia as that area on the other side of the world with the funny writing where our iPhones and children’s toys are assembled, where spicy food comes from, and where people hang red lanterns and worship dragons. In short, Asia is not a place to be taken seriously.
But oh, how wrong can those people be.
First off, lumping a continent together into one word and trying to generalize it doesn’t help anyone. Asia holds more people than Europe and the Americas combined. The differences between a Muslim island in the Philippines and the Shibuya crossing in Tokyo are vaster than any differences between Sante Fe and Shanghai. To rebut a common racist viewpoint: it’s not only that they all don’t look the same, they don’t act the same way, they don’t like the same things, they don’t live the same way, and they don’t behave the same way either.
Even those of us who are privy to the international intricacies of the world still have a tendency to overlook Asia in business terms. It has huge amounts of people, sure, but as a market it has always lagged behind the thicker pockets of Miami or Milan. The beaches in Thailand are slices of paradise, but the people in Bangkok will never buy our western products. So, oftentimes, we go on ignoring Asia.
Well, there is one sector that can no longer be ignored, and upon examination reveals that if anyone is lagging, it’s the West.
That sector is e-commerce.
2017 Was A Hell of A Year
According to eMarketer, retail e-commerce sales in Asia grew 31.1% in 2017.
I’ll let that sink in.
The jump of 31% in e-commerce sales brings the yearly total to the equivalent of $1.4 trillion. Of that, 83% comes from China. But that’s not to leave out two other technologically advanced countries, namely Japan and South Korea. Both have strong m-commerce markets as a result of the amount of time that they spend on their phones.
M-commerce is still struggling to take off in the west. People use their phones for more and more purchases but in Asia many people’s first connected devices are phones. Many consumers don’t have a desktop at home, whereas the majority of adults with smartphones in Europe and America probably started off with a computer sitting on a desk in their home. It remains where they feel most comfortable making retail purchases.
In Asia, m-commerce accounts for 76.1% of retail e-commerce sales (again most of that from China). Alibaba, Asia’s Amazon, recorded incredible spikes in m-commerce in China, where now 80% of it’s retail e-commerce sales happen on mobile phones.
Hear the Roar of the Dragon, not the Tiger
Asia is already the world’s largest retail market, capturing over 40% of the world’s retail sales in 2017 according to eMarketer, about half of which come from China. And China is poised to cross the threshold in 2018 where more than 20% of its total retail sales will come from e-commerce.
Most countries are predicted to increase their e-commerce footprints, and while the numbers might be less spectacular than 2017, the trend for almost every country in Asia Pacific is up. There is one notable exception, however.
India’s e-commerce makes up only 2% of its total retail sales. Because of its sheer size, that still adds up to a lot of rupees. But India suffers from a relatively small middle class, a lot of poverty, less robust infrastructure, and the tendency to pay in cash upon delivery – all of which, when combined, strongly limits the adoption of e-commerce.
This rising trend of e-commerce will certainly spill back over to the west, and while growth in developed markets like Europe and America will be slower than the break-neck pace in Asia, there is absolutely no reason to believe that we won’t see similar numbers in the coming decade.
The wise person, then, would be the one who learns from what’s happening now in the East and brings it back to lead the West.