China, Japan, South Korea, India and Australia will be the biggest growth drivers of e-commerce in Asia Pacific region, research and advisory firm Forrester said in its report “Asia Pacific Online Retail Forecast 2015 To 2020”.
Forrester expects online retail sales in Asia Pacific to reach $1.4 trillion by 2020, growing at a compound annual growth rate (CAGR) of 14.3% over the next five years.
China, the biggest market for online retail sales in Asia Pacific, is likely to become the first market to reach $1 trillion in 2019. It holds 80% share in online retail market in the region, the report said.
Infusion of funds by venture capital firms in China and India and rising demand for smart phones are the major triggers for the growing online retail sales in Asia. 46% of online retail sales in Asia Pacific was done by mobile phones in 2015, and is likely to reach 69% of total online retail sales by 2020.
Apparel and accessories is the largest category which accounts for more than 20% of online retail sales in Asia Pacific, followed by consumer electronics, as per the report.
“This forecast details online and offline growth across 11 product categories and five markets. It also reveals the mobile-versus-desktop breakdown and provides historical data going back to 2009,” the report said.
As per Lily Varon, an analyst with Forrestor, and also the author of the report Asia Pacific Online Retail Forecast 2015 To 2020, an analysis on the growth of online retail in these markets over the next five years has been included in the report and some of the key trends shaping the development of online retail in each one have been observed, including the following:
China’s e-commerce market grows despite falling economy: China’s e-commerce market is growing despite the fact that its economy dipped below 7% for the first time since 2009. It outdid US to become the largest e-commerce market in the world in 2015.
India, the fastest growing e-commerce market: As per Varon, though India is the fastest growing e-commerce market in the region but has its own challenges. Lack of proper infrastructure, underdeveloped logistics, low penetration of internet connectivity and the cash-based culture are the major obstacles in the way of e-commerce firms. India is the smallest e-commerce market, as per Forrester’s report.
Japan, South Korea and Australia are mature e-commerce markets: Japan, South Korea and Australia are mature e-commerce markets because of high internet connectivity, large population of online shoppers and high per-capita online shopping, according to the report.
But, according to Varon, the e-commerce leaders need to consider each region’s peculiarities before crafting their strategies to operate in these markets, the report said.