The ecommerce market in Asia is growing faster than that of any other region in the world.

In 2015, ecommerce sales reached $835bn in Asia – a total increase of 32% from the prior year.

Since Asia’s market is rapidly growing and filled with new opportunities, many U.S. brands are now looking for ways to sell directly to local customers online. 

What many brands fail to see is that the Asian markets are very different from their Western counterparts, so fail to adapt their strategies for the specific nuances of each.

How then should companies better prepare to enter Asia’s burgeoning ecommerce market? 

1. Learn how consumers differ across each country

Consumers in Asia are very nuanced; each respective country has it own set of particular attributes and shopping habits.

By simply taking a look at the GDP per capita in Singapore ($52,000) compared to that in Malaysia ($9,000), one can see the vast imbalance.

These two countries are separated by a body of water less than a mile long and yet they are very different from a discretionary income perspective.  

Unfortunately, many U.S. brands use blanket pricing for customers all across Asia. This is an unfortunate misstep, as price sensitivity across the region varies dramatically.

What may be considered cheap in a developed country such as South Korea can be considered expensive in a neighboring country such as Vietnam. 

Therefore, it’s important for brands to segment their customers by country and if possible, even cities, since income differences between small and large cities can often be as great as those between developed and emerging nations.

2. Leverage the local platform of choice

Each and every country in Asia has a distinct ecommerce platform through which the majority of its online transactions occur.

In the same way that Amazon is the dominant ecommerce platform in the U.S., Flipkart is the platform of choice in India, Tmall in China and Coupang in Malaysia.  

Setting up an individual ecommerce site and translating it to adapt to a local country is not enough for brands to enter individual markets in Asia.

Many have done so relying on their slightly-targeted digital marketing campaigns to attract consumers but it is absolutely critical that U.S. brands establish a presence on local platforms, which often serve as the entry point for foreign brands. 

Tmall

tmall

3. Look to local brands for inspiration and insight

It’s important that brands do not assume that their American roots will help drive sales in Asia, regardless of the product fit or quality.

Some brands will always be successful regardless of their geographic location because of their brand equity and legacy (such as Nike or Apple) but for the mass majority of brands, simply being “American” is not enough.

Though privileged, they cannot expect to immediately succeed unless they spend considerable effort in expanding their global reach through local marketing and brand building.

In most developed countries, there’s already a number of successful local brands that do quite well and pose formidable threats to any new entrants.

In South Korea, famous beauty brands such as Tony Moly or Nature Republic – which are considered leaders in the industry – dominate the playing field, making it very difficult for international brands to enter the market.

Instead of getting discouraged, brands must look at dominant competitors to help gain a better understanding of which products sell well in each country, what marketing tactics work best and even which ecommerce design styles/layouts local consumers prefer.

In summary

Breaking into the Asian ecommerce market is a highly attractive prospect for any brand, due to its immense growth. But brands need to be aware of all the detailed nuances that are present in each and every country.

A simple blanket strategy to conserve resources or personnel will not suffice to successfully enter the Asian market

Instead, building a well thought-out plan that takes into consideration the differences that exist within markets is crucial.

Bart Mroz

Published 20 September, 2016 by Bart Mroz

Bart is CEO and Co-founder of SUMO Heavy, a digital commerce consultancy, and a contributor to Econsultancy. You can follow him on Twitter or connect via LinkedIn.

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Comments (1)

Joe Tarragano

Joe Tarragano, Group Managing Director at Pentagon

Good post, thanks.

The marketplaces story can be seductive, but you're very right to point out the need for marketing spend and localisation.

It is absolutely the case that in many markets the route to success is via a marketplace - such platforms can represent upwards of 80% of all ecommerce in some countries. And consumers like & trust the customer experience on these spaces, and the marketplaces remove so many of the headaches for retailers in terms of payment, logistics and more.

But simply having 100m visitors is not enough - to get cut through against the hundreds of thousands of other sellers requires sizeable marketing investment; simply being a famous US or European brand is never enough

about 1 year ago

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