The FINANCIAL — International Data Corporation (IDC) predicts that the xCommerce market will grow rapidly in the Asia-Pacific ex-Japan (APeJ) region, rising from nearly $7 trillion in 2015 to nearly US$17 trillion in 2019. This represents a strong double-digit compound annual growth rate (CAGR) of 19% within the 2015–2019 period. China has rapidly emerged as the epicenter of xCommerce in the region, with India and Indonesia amongst several rapidly growing markets in Asia.
IDC believes that in Asia, the traditional eCommerce models are evolving toward a new way of doing business, with new services at the core of a new economic model called xCommerce. IDC defines xCommerce as an all-encompassing term that highlights the increasingly innovative and complex business models catering to the rapidly changing consumer purchasing behavior over and above the traditional eCommerce models. These business models include on-demand services (ODS), “sharing economy” services, online to offline (O2O), social commerce, content commerce, new payment and logistics systems, and customer experience (CX).
“In a mobile-first region like Asia, xCommerce is being driven by a number of enablers like rapidly growing smartphone adoption, mobile broadband availability and user friendly and secure mobile payments,” says Shiv Putcha, Associate Research Director, AP Service Provider Strategies at IDC Asia/Pacific.
The unique characteristics of the Asian region have spawned a boom in online to offline (O2O) services, with new providers offering consumers a “closed loop” from enabling search and discovery to payments to the fulfillment of goods and services. O2O service providers offer a complete integration of online to offline (or vice versa), a complete customer relationship management (CRM) experience, and demand-oriented customized services for online platforms — all of which underpin the new wave of xCommerce, according to IDC.
“When we look across the region, we see a duality between the mature Asian markets like Australia, Hong Kong and Singapore versus the emerging Asian economies like China, India and Indonesia. The mature markets are trending along more familiar Western models like in the United States, not just in xCommerce but also in mobile payments. The emerging markets of Asia, however, are seeing rapid innovation, new business models and entire new categories opening up,” says Mr. Putcha.
Seeing how Asia’s mobile-first landscape is fundamentally changing consumer behavior and influencing several trends, IDC has identified several key drivers for sustained growth in xCommerce across APeJ. These includes:
• The rise of social media as a discovery platform. Social commerce has emerged as a valuable marketing platform for xCommerce, with both traditional ecommerce and emerging mCommerce leveraging on social media for growth in an approach that fuses electronic commerce and social networking services.
• The rise of on-demand delivery models. Delivery models are getting streamlined with the rise of ODS, a trend derived from the power of “crowdsourcing” and “instant gratification” culture, with most of these transactions initiated over a mobile device.
• The rise of the Sharing Economy. These services in Asia Pacific are set to grow, with consumers beginning to share rooms, hobbies, and car services, among others. Such services will foster and drive new innovative methods of payment for services, especially those of lower transaction values.
• The rising importance of customer experience (CX). Organizations are wrestling with the rapidly changing nature of interaction with their customers versus the technology that has been put into place (omni-channel contact center and CRM applications). The convergence of CX with xCommerce has become a must have feature in emerging xCommerce models.