Australia, South Korea, Taiwan and Japan led the pack thanks to their stable political and economic outlook and high disposable incomes.
E-commerce sales in the Asia Pacific (APAC) region is projected to grow 14.2% YoY in 2019 to reach US$1.2t with Indonesia as the growth outperformer with a 22% annual increase in its e-commerce sales, according to a report by Fitch Solutions.
By comparison, second placer US is projected to post e-commerce sales worth US$456.9b in 2019.
Whilst the projected growth is slightly slowing compared to 2018’s 18% YoY estimated increase, it still signifies a stabilising growth trajectory with regions’ developed, emerging and frontier markets offering investors various opportunities, Fitch Solutions said.
Broken down, ‘developed Asia’ which consists of Australia, South Korea, Taiwan and Japan led the pack thanks to its stable political and economic outlook and high disposable incomes, the report explained. ‘Emerging Asia’ which include China, India, Philippines and Indonesia on the other hand, provided investors with a large consumer base, ‘favourable’ young adult demographics and consumer spending growth which is key to driving e-commerce sales growth.
“Total sales figures show just how Asia dominates globally and will continue to do so, with the region’s e-commerce sales projected to reach US$1.77t by 2022, the largest regional e-commerce market globally and ahead of second-placed North America and Western Europe,” the report noted.
Fitch Solutions also revealed how China is projected to account for 71.2% of Asia’s total e-commerce sales with US$1.24t in 2022.
Meanwhile, Asia also topped Fitch Solutions’ global E-commerce Index with a score of 59.7 out of 100. The index takes into account a country’s e-commerce growth prospects, existing and projected value of e-commerce sales, political and economic logistics, e-commerce infrastructure, population and consumer spending outlook.
By country, South Korea and China placed first and third respectively, whilst Taiwan (6th), Australia (11th), Japan (12th) and Hong Kong (14th) ranked within the top 15 globally.
South Korea scored 73.3 out of 100 thanks to its propensity for online purchases and robust e-commerce infrastructure.
However, Fitch Solutions’ report noted that potential investors would have to navigate some challenges, particularly with emerging Asia markets, as political risks and poor telecommunication services continue to drag the region down.
“Bureaucracy and red tape are a challenge for all types of investors seeking to enter emerging Asia,” Fitch Solutions said. “E-commerce infrastructure must also be invested in, with the development of e-commerce in Philippines, Vietnam, Indonesia and India being held back by low financial account penetration and mobile data penetration.”
Nonetheless, opportunities in Asia continue to win out against potential risks, with the report adding how platforms suited for the ageing market, particularly in Singapore and Japan, open up doors for new investments and strategies.
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