In October 2019, the IMF predicted that Asia would grow by 5% in 2019. That’s 0.4% lower than the IMF’s April 2019 projection for full year growth, but overall not too bad. How is that prediction holding up now after the impact of COVID-19? The short answer is that we don’t know yet. The pandemic has swept away all assumptions before it.
At the end of March 2020, it seems that the worst is over for APAC: China has seen the number of new cases fall to zero. Singapore, Japan, South Korea and other Asian markets also appeared to have the virus under control. Reports indicate that people in these countries are once more spending money, but that does not mean that a rapid recovery is assured. However, on the bright side (at least for businesses involved in online retail) e-commerce appears to be benefitting from a boom.
The Local Payment Culture
For this report, PPRO surveyed 14 key Asian markets to find out what the payment landscape looked like. Those markets are: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
The most common type of online payment method was the e-wallet, with a 46% market share. Cards came second at 30%, followed by bank transfers (13%), cash (7%) and various minor payment types (4%). The card market is dominated by local schemes and minor players at 86%. Visa has 9% of the card market, Mastercard 5% and American Express less than 1%.
The E-Commerce Market
On average, the B2C e-commerce market in the countries covered by this report is growing by 22%. In rapidly industrialising and developing markets such as the Philippines and Indonesia, e-commerce is growing at around 30% a year. In more mature markets such as Hong Kong, Taiwan and Singapore, the growth rate hovers closer to 10%. 58% of all online purchases in the region are made on a mobile device. China dominates the regional e-commerce market. 42% of all e-commerce purchases worldwide take place in China. Southeast Asia looks like it will be the next big arena of competition, with local players squaring off against US and Chinese competitors.