Asia has long been touted as an up-and-coming market. As the region develops and its inhabitants gain greater purchasing power, it comes as no surprise that businesses desire to enter this lucrative market.
Its growing middle class coupled with increased internet penetration presents an even greater opportunity for those involved in eCommerce. For this very reason, we’re seeing eCommerce giant, Shopify, bolstering its activity within Asia.
In this article, we’ll dive deep into the ways Shopify is increasing its presence in Asia and the part it plays in developing eCommerce in the region. Let’s get started!
Asian E-commerce: The Numbers
Asia has become the largest eCommerce market in the world. According to Statista, over half of the retail eCommerce sales came from the Asia-Pacific region in 2020. This upward trend will seep into 2022 as eCommerce sales in the market are projected to reach a staggering $2,093.00 billion.
These numbers are a result of more consumers in the region gaining access to the internet, and online shopping becoming increasingly common. As internet connectivity continues to rise, by 2025, the number of online shoppers in Asia is expected to reach 3.1 billion.
The vast majority of these consumers and revenue comes from China. In fact, China is expected to draw in the most eCommerce revenue this year. But it’s not just China making giant leaps. Southeast Asia is experiencing the fastest digital growth in the world, with the Philippines, Vietnam, and Indonesia claiming the top spots.
The State of Shopify In Asia
E-merchants in Asia have been noticing these promising numbers. Despite there being established regional eCommerce platforms, the amount choosing Shopify is rising.
This year in China, the number of Shopify merchants has increased by 133%. Japan has also experienced recent rapid growth. The amount of Shopify merchants here rose by 93% year-on-year in Q1 of 2022. South Korea and Hong Kong witnessed the same pattern. The number of Shopify stores in South Korea has jumped by 86%. In Hong Kong, new store creations soared by 223% in 2020.
Number of Shopify stores worldwide (Source: Store Leads)
Shopify Initiatives in Asia
As Asia is rapidly becoming an important region for eCommerce, Shopify is taking notice. The demand for online goods in the region is steadily rising, up 4% since 2017. With the SaaS market in Western countries reaching saturation, and there being an eager market for eCommerce in Asia, Shopify has taken strides to increase its presence.
Let’s take a look at some of the moves Shopify has been making in Asia to push eCommerce and its position.
Access to Asian marketplaces
To widen its reach within the Asian market, Shopify has formed partnerships with established eCommerce businesses. The idea here is to provide US Shopify merchants with easier access to consumers in Asia.
Shopify partners with JD.com
JD.com aka Jingdong is China’s largest online retailer. With almost 570 million active users, the platform is a goldmine for eCommerce merchants who have their sights set on China. The marketplace does give shoppers access to foreign products, but the process for international merchants to sell here is extremely complicated. For foreign brands, it can take as long as 12 months. So in January 2022, Shopify broke this barrier by integrating with JD.com. Their partnership allows international merchants to access the Chinese market within 3-4 weeks.
JD.com gives Chinese consumers access to a broad range of products.
US Shopify merchants can now list their products on JD.com, and source items from the marketplace’s pool of approved suppliers. They’ll also receive support for onboarding, and gain access to features such as automatic customs calculations, duties and FX rates, and smart translations of product titles and descriptions.
Fulfilling orders at an international level becomes simpler. As part of the agreement, JD.com will take care of end-to-end fulfillment. The company has warehouses located in the US as well as its own cargo flights. This makes it super simple for JD.com to ship products from the US straight to the doors of Chinese consumers.
Chinese e-merchants will also benefit from the partnership. JD will simplify access and compliance for Chinese brands that want to enter Western markets. Such brands will receive support in setting up Shopify and have their shipping taken care of by JD.
Shopify enters Japan
Rakuten Ichiba is Japan’s number 1 eCommerce platform, and the world’s third-largest online marketplace. It has a customer base of over 100 million, making it a tantalizing opportunity for global e-merchants. Rather than just trying to out-compete this eCommerce giant, in 2020, Shopify wove the platform into theirs.
By downloading the app, Shopify merchants in the US and Japan can connect their store to Rakuten Ichiba and manage it within Shopify admin. Here, products can be registered, and inventory and orders can be managed for stores on Rakuten Ichiba.
Shopify merchants can manage a Rakuten store in the Shopify admin.
That being said, Shopify is also trying to carve a place for itself in Japan’s eCommerce landscape. In 2017, the company registered in Japan, aiming to attract more Japanese merchants to its platform. This move caused a 300% increase in merchants from the country signing up to Shopify. The country manager for Japan boiled this rapid growth down to having a localized approach. Their strategy focused on partnering with agencies and app developers who know the market well and understand the specific needs of consumers and e-merchants in the country.
Alliance with Payment platforms
Preferences when it comes to payment methods vary greatly depending on region. Whilst US and British consumers turn to their debit or credit cards by default, low penetration in the APAC region causes these shoppers to turn to other payment methods.
(Source: Tech Wire Asia)
Consumers here are far more likely to use digital wallets. There’s also a huge preference for local bank transfers in certain parts of Asia. According to research by Rapyd, 34% and 28% of consumers in Malaysia and Singapore prefer using bank transfers, respectively. This makes the inclusion of non-traditional payment methods essential for success in Asian markets.
To suit these shoppers and deepen their footprint in Asia, Shopify has teamed up with some of the region’s most popular payment providers. Eroding the friction merchants may face when they try to enter these markets.
Shopify and AliPay
AliPay is an immensely popular eWallet app, primarily used by consumers in China, Hong Kong, and many other APAC countries. It has over 1.3 billion active users, and processed $17 trillion worth of transactions in 2020. This impressive penetration made integrating AliPay into Shopify’s payment system a no-brainer.
Shopify merchants in the US and Hong Kong can unlock their full potential in cross-border commerce through AliPay. Previously, this was only possible through a third-party provider, which imposed extra costs on store owners. Now, as an official payment gateway on Shopify, merchants can accept payments with zero fuss.
To move further into borderless commerce and open up Asia to more Shopify merchants, the company plans to expand this offering to India, South Korea, Indonesia, the Philippines, Malaysia, Thailand, Pakistan, and Bangladesh.
Other payment gateways for Asia
Continuing its bid to streamline payments for Asian consumers, Shopify payments are growing its list of payment providers integrated. Some of the most notable ones include:
- eNETS: one of Singapore’s leading and most trusted payment gateways
- GrabPay: a popular Southeast Asian ride-hailing app that facilitates digital payments throughout Asia
- iPay88: a leading online payment company based in Malaysia commanding over 60% of the market
- PayPay: a relatively new but fast-emerging payment service by Japan’s SoftBank with over 39 million users
Shopify Plus Partners in Asia
Aside from granting merchants easier access to new markets, Shopify is also taking steps to advance eCommerce in Asia through its Shopify Plus Partner program. With it, Shopify is able to connect merchants with all the support they need to scale their business through the platform.
The beginning of 2022 saw Shopify expand this program into Southeast Asia, introducing aCommerce as their first partner in Indonesia, Thailand, and the Philippines. aCommerce is a leading eCommerce service provider that bestows localized solutions for brands wishing to expand into or grow within the region.
(Source: Marketech APAC)
This partnership presents an exciting opportunity for eCommerce brands in Asia. The expertise and market knowledge of aCommerce, coupled with the powerful features of Shopify Plus gives merchants the power to provide a stellar shopping experience for SEA consumers.
E-merchants in the region can now easily take charge of customer engagement, optimize their merchandising, and have ownership of all data. It also paves the way for omnichannel strategies to be adopted. aCommerce clients who use Shopify Plus as an additional sales source will gain a unified view of all of their existing eCommerce channels.
At the end of last year, we witnessed Shopify consolidating its efforts for cross-border commerce through the launch of Shopify Markets. Whilst this is a general initiative for global commerce, it undoubtedly eases entry into Asia for Shopify merchants.
Shopify Markets provides a snapshot view of performance in each territory and can make recommendations for improvements (Source: Shopify)
Shopify Markets erases the need for merchants to install a wealth of apps to prepare their stores for foreign territories. Storefronts can automatically display local currencies and languages, region-specific content can be created, and pricing strategies can be configured for each market. The discoverability of Shopify stores in local searches also receives a boost thanks to country-specific domains.
Read more: Shopify Markets: All You Need To Know
With these vital features so easily accessible for Shopify merchants, the brand’s presence in Asia - and beyond - is sure to rise exponentially.
Significant developments in Asia are pushing the continent to the forefront of global eCommerce. For this reason, Shopify is taking massive steps to grow its presence in Asia and be a purveyor of eCommerce here. The company is making it easier for foreign merchants to enter the Asian market, and equipping e-merchants in Asia with great tools to serve their customers.
So, if you’re aiming for digital shoppers in Asia, Shopify should be your go-to eCommerce platform. You’ll have everything you need to succeed in this promising market at your fingertips.