Online shopping has overtaken bricks and mortar retail as the most popular method of purchase in several Asian markets.
That stunning revelation comes from a new report from real estate company CBRE How We Like to Shop Online which is based on responses from online consumer panels. CBRE warns the findings represent the emerging behavior of this important and fast-growing segment of all markets, but may not fully represent consumer behavior in markets with low online penetration.
That said, the conclusions remain relevant to traditional retailers.
“While 50 per cent of Asia Pacific consumers still physically visit a shop to make a purchase, findings show that in emerging markets such as China and India, the majority of respondents – 76 per cent and 68 per cent respectively – use online shopping as their most commonly used method of making purchases,” said CBRE in an overview of the report.
“This is also the case in more developed markets of South Korea and Taiwan where 73 per cent and 55 per cent of consumers respectively, also said their primary method of making purchases is online.”
“For emerging markets, given the lack of quality retail space – particularly in lower tier cities – advances in technology and logistics networks mean that online retail is often the most efficient way for retailers to reach their customers,” said Jonathan Hsu, head of occupier markets research, CBRE Asia Pacific.
Along with convenience, pricing ranks as one of the top reasons why consumers shop online – 63 per cent of the total number of respondents surveyed identified this as their key deciding factor. These correspond to the same deciding factors when shopping at physical stores.
“With 56 per cent of Asia Pacific consumers using their desktop or laptop to check prices of products online, price transparency is an important aspect for retailers to consider,” said Joel Stephen, senior director, head of retailer representation, CBRE Asia.
“We recommend retailers review their regional pricing strategy, particularly in China and South Korea where more than two-thirds of consumers identified lower prices and better offers as the main reason behind their decision to shop online. In Asia Pacific, foreign brands – in particular luxury – are often more expensive than other regions due to import duties, exchange rates and the franchise model impacting the price. This may encourage consumers to consider alternative sales channels, such as overseas online markets, in search of better deals,” said Stephen.
The ability to compare products without having to physically visit individual stores is another key factor for the region’s consumers when shopping online. This trend is more prominent in emerging markets such as Vietnam (64 per cent), China (61 per cent) and India (58 per cent) where quality shopping centers or shops are often located far from each other.
