Ahead of Mobile World Congress (MWC) 2017 in Shanghai, we asked Adrian Lee, research director at Gartner, how the ‘Human Element’ theme of this year’s event ties into current trends in digital and mobile commerce in Asia.
Q: What are the trends for digital commerce in Asia/Pacific?
A: In Asia/Pacific, 44 percent of consumers use mobile shopping apps, the highest in the world. However, their purchase conversion rate using mobile apps remains low at only 1.27 percent, dwarfed by the 3.45 percent conversion rate with desktop PCs. B2C digital commerce service providers in the region use wholly owned or relevant local supply chain management providers to improve fulfillment in hard-to-reach rural areas. Alternative payment methods, such as cash on delivery (COD), multiple payment platforms, interest-free installments and bank fund transfers are the key to engaging lower-income users in emerging markets like Vietnam, Philippines and Myanmar.
Digital commerce providers who want to enhance their customer experience (CX) and succeed should be looking to purpose-build their mobile apps’ CX to present a consistent brand experience. In such a complex geographical region, they need to fulfill via optimized supply chain management solutions or with local partners to provide post-sales services and shorten delivery times in hard-to-reach areas. Finally, the digital payment situation is fragmented, so they need to implement hyperlocal methods of payment via collaboration with banks, mobile payments and COD.
Q: How does digital commerce fit into the ‘Human Element’ theme at MWC this year?
A: Many of the client inquiries we receive at Gartner on digital commerce are not so much about the technologies but rather the challenges of bringing a winning service to market. The discussions are about customer experience, with emphasis on how to create friction-free user journeys to drive revenues.
Customer experience management is the practice of designing and reacting to customer interactions to meet or exceed expectations and increase customer satisfaction, loyalty and advocacy. Without a doubt, this is the ‘human’ aspect of digital commerce which, according to industry estimates, is set to grow on average by 32 percent in the 10 years to 2025 in Southeast Asia alone. Any digital business leader that is not thinking CX straight out of the gate is not going to succeed in the region.
Q: What about the digital giants, like Alibaba Group, that are so prominent in Asia for digital commerce?
A: Alibaba Group is the undeniable leader for consumer digital commerce in terms of gross merchandise volume (GMV) with a base of 537 million active users. Alibaba Group has a deep-rooted market presence in China through a truly mind-boggling product category offering that spans more than three quarters of a billion items, and underpinned by an increasingly robust digital commerce platform driven by data analytics. However, Alibaba’s conversion rate in mobile commerce remains weaker and average revenue per mobile user is only two-thirds of desktop purchases. The Alibaba Group needs to invest in disruptive technology research and development to continually improve the mobile CX.
Alibaba is showing its ‘human’ and intuitive touch by chasing new growth channels from the summative effect of its digital payment channels, media content, mobile gaming and data analytics from its Alibaba Cloud arm. Exploiting its leadership position, Alibaba Group can also take advantage of integrating zero touch user interfaces within its digital commerce operations.
Gartner clients can read more in Adrian’s report Market Insight: Mobile Success Strategies for B2C Digital Commerce in Asia/Pacific.