In April 2018, the IMF called Asia “the main engine of the world’s economy”. The region, it explained, contributed more than 60% of the world’s economic growth, with its economy expanding by 5.7% in 2017.
Even this impressive rate of economic expansion is not what it was just a few years ago. In 2010, the Asian economic growth rate was 7.0%. By 2016, it had fallen to 4.1%. That’s still over twice the growth rate of either North America or the EU. By 2017, however, the continent was growing again, and according to the IMF, Asia grew by 5.6% in 2018 and is estimated to grow by 5.4% in 2019.
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 40% market share. Cards came a close second, with 31%, followed by bank transfers (13%), cash (10%) and various minor payment types (6%). The card market is dominated to 84% by local schemes and minor players. Visa has 10% of the card market, Mastercard 6% 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 18%, consumers spend $1,794 a year with online merchants, and online sales account for 20% of all retails sales. However, these averages conceal wide disparities. In Malaysia, for instance, e-commerce volumes are growing at a rate of 100% a year. Whereas, in Hong Kong, a much more mature market, the growth rate is 7.7%. In rapidly industrialising and developing markets such as Thailand and the Philippines, e-commerce is growing at more than 31% a year. In other South Asian markets, such as Vietnam and Indonesia, the growth rate is between 20% and 40%. Alibaba bought 51% of Lazada – the leading provider in all these markets – in April 2016 for $1 billion and has since invested another $3 billion in the business. But whether Lazada is performing as hoped hasn’t been reported.
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PPRO Country Insight Australia
A member of the Commonwealth of Nations, Australia is a constitutional monarchy with its capital in the city of Canberra. With a population of just 24.6 million in a country almost the size of Brazil, Australia has one of the world’s lowest population densities. Large areas of the interior are effectively uninhabited.
PPRO Country Insight China
With almost 1.4 billion inhabitants, China is the world’s most populous country. One of the oldest continuous civilizations — China sent ambassadors to the Roman emperor Augustus — the country is home to at least 55 ethnic groups, though over 90% of the population are Han Chinese.
PPRO Country Insight Hong Kong
Handed back to China by the British in 1997, Hong Kong is now an autonomous region of the People’s Republic of China. With 7.4 million inhabitants, the citystate has a population density of 7,075 persons per square kilometre, making it one of the most crowded cities on Earth.
PPRO Country Insight India
India is a federal republic consisting of 29 states. With 1.3 billion citizens, it’s the world’s second most populous country. The state recognises fourteen official languages, with Hindi (spoken by 44% of the population) and English the official languages of the federal government.
PPRO Country Insight Indonesia
By the middle of 2018, Indonesia’s economy was growing at a rate of 5.3% year on year. The Financial Times quotes Capital Economics as warning against expectations of a sustained recovery (after the global recession, Indonesia’s growth rates peaked at over 6%2), quoting the continued low prices of key commodities, including palm oil.
PPRO Country Insight Japan
Japan is home to 127 million people. Having resisted immigration as a way to ameliorate the impact of its ageing population, Japan is one of the world’s most ethnically homogenous countries. Ethnic Japanese make up over 98% of the population.
PPRO Country Insight New Zealand
A member of the Commonwealth of Nations, New Zealand – also known by its Maori name of Aotearoa – is an English-speaking constitutional monarchy with a population of just under 5 million. Settled by the Maoris in the fourteenth century AD, the country was colonised by the British in the nineteenth century. Today it is an increasingly multicultural and diverse society.