The total online retail revenues in China, Japan, South Korea, India, and Australia will nearly double from US$733 billion in 2015 to US$1.4 trillion in 2020, according to a new forecast by Forrester. Today, the eCommerce revenues in these five Asia Pacific markets already surpass the combined figure for online retail in the US and all of Western Europe, with China and India being the two largest and the fastest-growing eCommerce markets of Forrester forecasts across the globe.
“These countries in Asia Pacific will be some of the biggest drivers of global eCommerce growth going forward,” writes Forrester Analyst Lily Varon. “The Asia Pacific region encompasses online retail markets that span varying sizes, maturity levels, and industry dynamics. Yet despite these differences, a series of trends is evident in every market in Asia Pacific.”
- China’s eCommerce market grows despite the economic slowdown. China surpassed the US in 2015 to become the largest eCommerce market in the world, despite its economic growth falling below 7% for the first time since 2009. While the days of staggering year-over-year eCommerce growth in China are gone, current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea. Nevertheless, China will continue to dominate online retail revenues in the region. By 2020, China’s online retail market will reach $1.1 trillion, nine times larger than Japan’s $122 billion market and 17 times larger than South Korea’s $65 billion market.
- India is the fastest-growing eCommerce market in the region, but not without obstacles. The smallest eCommerce market in this forecast, India’s online sales will grow more than fivefold by 2020 as the number of online buyers and per capita online spending increase rapidly. However, in addition to underdeveloped logistics and challenging last-mile connectivity, India’s cash-based culture still poses a huge challenge for eCommerce firms.
- Japan, South Korea, and Australia are mature eCommerce markets. Each of these countries has all of the characteristics of a mature eCommerce market: high Internet and broadband subscriber penetration, a large percentage of online shoppers, and high per capita online spending. But each market has unique characteristics that eCommerce leaders operating in these markets, or thinking about doing so, need to know and consider when crafting their offerings.