The Asia-Pacific e-commerce market is growing at 12 percent annually to hit US$2.1 trillion in 2021, as consumers across the region move towards digital payments such as e-wallets and bank transfers.
Online payment options increasingly were taking market share from traditional platforms such as credit and debit cards, according to stats from Worldpay, which looked at online spending patterns from 36 global markets, including Singapore, China, and South Korea.
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In the world's largest e-commerce market, China, for instance, e-wallets now accounted for 62 percent of overall payments, with most consumers opting to use digital platform such as Alipay, Tenpay, and WeChat Pay. Credit cards, which was second-most popular, accounted for 10 percent, but this payment mode was expected to be outpaced by bank transfers in 2021, when the latter would grab a 14 percent market share.
E-wallets also were seeing increasing adoption in Hong Kong, where the payment mode would account for 28 percent of online payments by 2021.
In Singapore, credit cards were expected to remain the preferred payment platform this year, taking 66 percent share of the market. However, by 2021, bank transfers and e-wallets were projected to nearly double, growing from 11 percent to 21 percent and 13 percent to 21 percent, respectively.
Bank transfers also were expected to outpace credit cards in Australia, by 2021, when it the former would increase it market share by 23.3 percent to 43 percent, to become the leading payment platform.
At 26 percent, e-wallets in India already were the most popular payment method, followed by bank transfers at 24 percent. In comparison, credit cards were expected to see its share dip from 12 percent to 8 percent by 2021.
Worldpay's Asia-Pacific general manager Phil Pomford said: "While there are significant variations in how consumers in different Asian markets prefer to pay, a constant is that they are shifting away from more traditional options like credit and debit cards, and instead choosing e-wallets, bank transfers, and cash-on-delivery.
"In order to keep up with changing market conditions and respond to varying consumer payment preferences from market to market, online merchants should support a wide range of payment options," Pomford said. "By giving online shoppers the chance to pay via their favourite method, businesses will create a consistent, streamlined checkout experience that is capable of converting browsers into buyers and fostering long-term loyalty amongst local and cross-border shoppers."
Singapore e-commerce market reaching saturation
Small it might be in terms of population, Singapore ranked as the third-largest e-commerce market in Southeast Asia. However, Worldpay noted, the market might be hitting saturation point with 73 percent of the city-state's online users already shopping online.
Singapore's e-commerce market was expected to grow 9 percent to reach US$6.5 billion by 2021, while India would expand by 25 percent and South Korea was set to see a 19 percent growth. China's e-commerce market was projected to grow by 11 percent.
Singapore, though, was see bright spots in mobile-commerce, which would grow 33 percent over the next five years. More than half of the country's online consumers already were buying from international merchants, fuelling cross-border transactions.
Pomford said: "Online shoppers [in Singapore] are moving beyond the desktop and beyond country borders. Savvy and well-connected across multiple devices, they increasingly prefer to shop via mobile and want more opportunities to purchase from merchants around Asia, and the globe.
"In order to deliver on the demands of Singaporean shoppers who expect a convenient, seamless experience no matter how they shop, merchants must create mobile-friendly payments so that shoppers always get a simple and secure checkout experience," he said, adding that merchants would need to provide a variety of currencies and payment options to tap cross-border trade.