Mobile Commerce Insider Featured Article

July 15, 2014

NTT Com Survey: e-Commerce Dynamism Stalled in Asia

It was in the early 1990’s that e-commerce came into being; since then it has been unstoppable. The shift in buying trends is perceptible as consumers’ preference to online buying shows an upward trend. According to research by NTT Communications, although this enthusiasm has been contagious, there are pockets where merchants have found it hard to make a dent – the Asian market, especially China.

Let’s see why this is so. Is it that the availability of disposable income is less? Is it because the Internet is not dominant in that region or is it because of lack of foreign investment? Strangely, the challenges seem to stem from a cultural perspective rather than an economic one.

The survey  titled” Breaking into the e-Commerce Market in Asia” indicates that Asia, especially China boasts the highest number of people who buy goods online in the world –thanks to a rising per capita income and an increasing Internet penetration and rising use of PCs, smartphones and tablets. Greater China is a high-potential market for e-commerce, while Hong Kong and Taiwan are considered as popular Asian destinations for e-commerce expansion in the next 12 months.

Payment solutions perhaps present the greatest barrier. Tyrone Lynch, vice president, eBusiness of NTT Com Asia, observes that conventional and mainstream payment methods used internationally are not prevalent in China and many parts of Asia.

There are not many who own credit cards and in some countries like Vietnam and Thailand, many don’t have bank accounts. Also different domestic payment methods, high transaction costs, currency restrictions and governmental tax regulations are bottlenecks that online merchants have to deal with. While e-commerce sites can resort to cash-on-delivery for such customers, that’s not an ideal solution for the application economy or online subscription services.

More thorns emerge: language barriers present a huge problem and enforcing quality control is a major issue. To add to merchants’ woes, there are shipping difficulties, cross-border currency settlement issues, the high risk of Internet fraud and the Chinese basic mistrust of advertising and news sources.

“Understanding the unique payment landscape in China, while providing consumers with the ability to pay in their preferred local methods is critical for success in this vast and fast-growing market,” said Lynch.

NTT Communications reports that its reliable and secure payment gateway solutions, ability to monitor currencies and strong local acquiring capabilities could help merchants navigate this versatile yet complex e-commerce market of Asia.




Edited by Maurice Nagle




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