E-commerce Revolution in Asia
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E-commerce Revolution in Asia
E-commerce has become a ubiquitous word, and even more so since the pandemic started in 2019. In that time, many businesses have turned to online solutions to sustain operations amidst government-imposed lockdowns and COVID-19 regulations.
Asia, which pre-pandemic had already seen a growth in e-commerce, can be considered to be in the thick of an e-commerce revolution as the industry worth of the market is rapidly increasing. In 2019, Asian consumers were purchasing US$2.118 trillion worth of goods online, which then grew by almost 20% to US$2.525 trillion within a year, with Chinese consumers making up slightly more than half of the Asian consumers. It is estimated that Asia's e-commerce revenue will hit US$1.92 trillion by 2024, which will then account for 61.4% of the global e-commerce market. These strong figures are not surprising as the region is positioning itself as a regional and international hub for e-commerce, with countries like China, Korea, and Singapore actively pushing for this growth.
China, home to some of the world's largest online retail platforms, such as Alibaba and JD.com, has led the e-commerce revolution in Asia. With more than 854 million internet users, China generated a market value of US$1.94 trillion in 2019 and accounted for 61.7% of Asia's digital retail industry.
However, in 2020, China's overall contribution to the industry saw a dip to 59.2%. This decline in China's e-commerce market share can be attributed to the significant surge of other Asian countries turning to e-commerce platforms due to COVID-19.
In pushing forth the e-commerce revolution that is already ongoing in China, the Chinese government has taken things a step further by establishing national e-commerce demonstration bases all around the country. These bases are designed to serve as incubation platforms for digitising businesses and guiding them with the latest technologies to grow the e-commerce industry, which has proven to be a success.
In 2019, with 112 e-commerce demonstration bases, China managed to add or expand “58,000 e-commerce and related companies” in the country, which also saw the employment of 1.2 million people and transactions amounting to US$790 billion. In 2020, China announced that it was adding another 15 of these bases, illustrating its continuing efforts to enhance its e-commerce industry. With such infrastructure in place, China has curtailed other big international players in the e-commerce industry, such as Amazon, from penetrating their market. Instead, it has achieved greater dominance of the e-commerce industry across Asia, allowing Chinese sellers to market their products abroad.
Similarly, South Korea, recognised for being one of the world's most technologically advanced countries, is also on an upward trajectory in the e-commerce industry. Coupang, an e-commerce platform founded in 2010, has become a market leader in Korea, surpassing Amazon. The Korean e-commerce giant, which has also expanded its services to Japan and Taiwan, saw a significant surge in its operations during the pandemic. In 2020, the company delivered approximately 3.3 million items daily across Korea compared to its average of about 2.2 million in 2019.
The implementation of excellent technological infrastructure combined with the country's extremely high penetration of smartphone users has enabled it to keep up with the e-commerce revolution in Asia. While it may still fall short of the figures generated by China, which dominates due to its large population, it is expected that Korea's retail e-commerce volume will stand at US$90.5 billion in 2024.
These figures highlight the ongoing e-commerce revolution in Asia, which already holds 59.7% of the world's B2C e-commerce market and is on the right trajectory to push that figure to 61.4% in the next three years. As more Asian countries jump on the e-commerce bandwagon, the region can expect to see redevelopment in many industries, including retail, food and beverage, transport, and travel, in the foreseeable future.