Growing smartphone and Internet penetration as well as massive increase in e-commerce are driving the Asia-Pacific (APAC) online retail payments market. As a result, the region accounted for approximately 50% of the global online retail payments market in 2020, according to GlobalData, a leading data and analytics company.

According to GlobalData’s Retail Intelligence Center, the APAC online payments market was worth around US$2.4 trillion in 2020, with China representing just over three quarters of the regional value of transactions made during the period.

Ankita Roy, Retail Analyst at GlobalData, comments: “The rapidly growing e-commerce sector is taking transactions away from the physical retailers. The growing mobile penetration presents opportunities for payment service providers to reach a wider audience, who can then use them for retail purchases.

“The APAC online retail sales were valued at US$995.6bn in 2020 – an increase of 28.2% over 2019 owing to the pandemic-led push towards the online channel as consumers shifted purchases during lockdowns. These habits have stuck even as the restrictions were eased owing to the convenience and the continuation of safety requirements while shopping. The regional retail e-commerce market is set to grow further at a CAGR of 14.4% from 2020-2025.”

Retailers are partnering with well-known mobile wallet companies to offer enhanced security for customers to perform online transactions. In September 2021, Meena Bazaar, which sells ethnic wear for women, partnered with Paytm to allow its shoppers to make digital payments using Paytm Wallet.

Roy continues: “The deployment of safe and secure payment options has become a major challenge for retailers. This is more evident in developing countries where the infrastructure is nascent and still evolving compared to developed nations. Hence, online retailers must optimize their websites and apps to simplify the online experience and attract more confident shoppers.”

Social media has no longer strictly remained just a tool for marketing, communicating, or influencing consumer purchases. It is now a direct buying channel due to the introduction of various shopping features across platforms such as Facebook, Instagram and WeChat.

Roy concludes: “Rather than cannibalizing existing sales, which would have already occurred through their online stores, social commerce offers retailers additional sales by attracting new shoppers. Additionally, retailers can also get benefits from curated tailored digital strategies and by erasing the fear of social media shopping’s credibility, without overspending on new customer acquisition, especially the high spending millennials.”