Expanding to APAC market: overview & payment trends
The markets of the Asia-Pacific region are now much easier to enter due to the pandemic restrictions and lockdowns all over the world. And many online businesses are making use of this. If your company is among them, this article is just what the doctor ordered.
Like any other, the APAC market has its rules to be followed by market players. We are more than happy to help you get these rules sorted out.
General market overview
The Asia-Pacific generally includes East Asia, South Asia, Southeast Asia, and Oceania. Countries in the Asia-Pacific region are rapidly recovering from COVID-19. According to McKinsey, the total number of cases and deaths from coronavirus in the Asia-Pacific region was less than in other parts of the world. Therefore, many entrepreneurs have changed their plans and transferred their business from Europe to the APAC countries.
E-commerce in the APAC region is one of the fastest-growing globally, which makes this market promising for business expansion. According to McKinsey, this region accounted for more than half of global Internet sales in 2017. And in 2020, the world’s middle class joined 1.4 billion people, 85% of whom live in the Asia-Pacific region.
An essential point to know before expanding to APAC: during the pandemic, the use of cash in Asia fell sharply, and the spread of contactless payments accelerated.
Specificity of the APAC market for businesses
This region is often considered to be a tough nut to crack due to several peculiarities. The two main are the fragmented payment landscape and the disjointed behaviour of the purchasers.
- Consumer behaviour. The APAC region comprises 48 countries, and each perceives goods and advertising in its own way. For instance, in Malaysia, people trust the influencers’ opinions, but Filipinos prefer to see customers’ reviews.
- Payment landscape. Although it would be convenient, the Asian market doesn’t have a single payment system that can be used across several countries. Moreover, bank cards are not the most popular payment method in many APAC countries. For example, virtual accounts are the most common in Indonesia, and purchasers from Thailand prefer cash transfers through the large networks Big C and Tesco.
- Restrictions. The laws in the Asia-Pacific countries vary greatly. Thus, gambling is completely banned in China, but the situation is reversed in Australia and the Philippines. To make a mark here, businesses have to compete with local casinos and bookmakers.
- Trending areas. E-sports were quite popular in the APAC region even before the epidemic. But the demand for mobile games has been actively growing in China and Southeast Asia countries since February 2020. Distance learning has also demonstrated its potential during isolation periods. Now the estimate of Asian EdTech has increased to $5 trillion. The digital technologies market is also trending: it is predicted to grow to $133 billion within four years.
Peculiarities by regions
According to the World Bank economy ranking, the APAC region is quite ambiguous. This ranking takes into consideration the loyalty of the regulatory environment to start and operate a local company. Certain countries favour starting new businesses or expanding the existing ones, and others presume certain challenges. We’ve compiled brief overviews of some countries with their ranking number to set the scene for you.