FOLLOWING on from the post-pandemic recovery, consumers across the Asia-Pacific region have been adapting to many challenges: inflation, a cost-of-living crisis and supply-chain-related instability of product availability, to name a few. Together with the GS1, the KPMG has produced the “Navigating the Future of Seamless Commerce in Asia Pacific” report based on a survey of 7,000 consumers across 14 markets in the region reflecting multiple patterns and expectations among consumer groups. About half of the respondents in each market were from the Gen Z group (18 to 24).
In addition to the research, the report features interviews with senior C-suite-level executives from market-leading retailers, brands and e-commerce marketplaces. One overriding conclusion is clear: The era of seamless commerce has arrived and while both online and offline channels remain popular throughout the region, traditional retail business models are unlikely to meet the expectations of many of today’s consumers. Retailers and brands have to adapt or face the consequence of not moving with the market.
The “Seamless Commerce Insights” report was covered at the inaugural National Retail Federation (NRF) 2024: “Retail’s Big Show” in Singapore. “Commerce is evolving through digital transformation, driven by rapid technology adoption. Continuous and compelling innovation is a must to meet customer expectations and enhance the customer experience,” KPMG in the Philippines Deal Advisory Principal and Consumer and Retail Head Jerome Andrew Garcia who attended the event shared.
“A key highlight from the report is that competitive pricing and delivery experience are the cornerstones for successful ecommerce retail models across the region. Additionally, payment pathways continue to move away from cash towards mobile banking and e-wallet enablers as the preferred payment models,” Garcia added. Here are six key seamless commerce trends in Asia Pacific.
The arrival of seamless commerce: fueled by platforms. What was once merely a buzzword, omnichannel has now given way to a more comprehensive approach that seamlessly integrates various platforms and services. This shift, accelerated by the pandemic, has propelled retailers to invest heavily in technology, AI solutions and streamlined supply chains to meet the demands of an increasingly digital-savvy consumer base.
Gen Z consumers are the key to retail’s future growth and shape. This demographic is driving unprecedented change because of their markedly different attitudes toward lifestyle and priorities, especially in online shopping behavior, sustainability concerns and their use of retail technology. While consumers overall across Asia Pacific identified mobile payment as the retail tech they have tried the most, among Gen Z the most popular was social commerce – especially in China, Vietnam, Indonesia and the Philippines.
AI is shaping customer experiences and driving sales. AI is already playing a significant role by enriching the shopping experience across various sectors such as beauty, home furniture and apparel. With continued market support, AI can substantially improve the operational efficiency of retail stores and fine-tune the consumer experience at crucial points in the shopping journey.
The continued rise of digital payments. Digital e-wallets are gaining ground in Southeast Asia, while debit or credit cards remain dominant in more developed economies such as Australia, New Zealand, Japan, Singapore and South Korea. By meaningfully taking these variations into account and offering local payment options tailored to target regions, retailers can expand their reach, both locally and internationally.
Know your customers: Data collection and analytics are shaping seamless commerce and powering loyalty programs. To meaningfully serve consumers who are increasingly price-sensitive yet demand orchestrated experiences, businesses must first consider how to infuse technology at the right and critical moment, making technology the key driver of seamless omnichannel experiences. The unstoppable drive towards sustainability.
Sustainability isn’t a marketing add-on, it’s the baseline. Brands should stitch diversity, ethics and social responsibility into their core, 65 percent of consumers in Asia-Pacific are willing to pay a premium for sustainability. This is the future of commerce, sewn by a generation with hearts and wallets for the green revolution.
Regulators and investors echo the call, but consumer pressure roars loudest. THE Philippines has the most fragmented e-commerce market–and one of the strongest adoption rates of Facebook Marketplace. A majority (61 percent) are comfortable shopping both online and in physical stores but tend to make more purchases online.
In terms of technology adoption shopping online, the Philippines is an outlier, with social commerce (24 percent) narrowly outranking mobile payments (23 percent), live-stream shopping recording 19 percent and voice shopping 14 percent. The level of engagement with live-stream shopping is highest among consumers aged 35 to 44, while voice shopping ranked prominently among consumers aged 25 to 34. Filipinos are the most likely of any market to support retailers and brands with clear and transparent sustainability commitments, at 98 percent, with 74 percent “actively seeking them out” and just 24 percent say it significantly impacts their purchasing decisions.
They are also more likely to pay a premium for such goods or services–just 19 percent expect prices to match other products and 56 percent are willing to pay up to 20 percent more. Key points were taken from this KPMG publication: © 2024 R.G.
Manabat & Co., a Philippine partnership, is a member firm of a global organization of independent member firms affiliated with KPMG Int’l Ltd. All rights reserved.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent the BusinessMirror, KPMG International or KPMG in the Philippines..
