How Different Generations Prefer To Pay In Southeast Asia

How Different Generations Prefer To Pay In Southeast Asia
By Cacahuate, amendments by Globe-trotter and Texugo (Own work based on the blank world map) [<a href="">CC BY-SA 4.0-3.0-2.5-2.0-1.0</a>], <a href="">via Wikimedia Commons</a>

The growing popularity of online shopping presents a huge opportunity for merchants. However, ecommerce poses certain challenges. In order to overcome them, how do you fulfill the needs of shoppers whom you’ll never meet in person? Of course, you have to understand the users and their behaviors. Let’s take a look at the profile of Southeast Asian consumers.

Southeast Asia

1. Payment Preferences

Consumers can shop anything on the internet these days. However, are there enough payment options to fulfill consumer’s various needs and preferences for payment methods? Do they find those methods convenient? Evidently, there isn’t much solution out there to cater for the mass, diverse consumer group. Cash paying customers contributes a large percentage of the market. Yet, most online businesses are not fully aware of this sizeable potential market. Nielsen’s Global Saving and Investment Strategies announced earlier this year revealed that 60% of Malaysians prefer cash payment for daily spending rather than credit cards. The percentage is even higher in the Philippines (74%), Thailand (68%) and Vietnam (61%).

Singaporeans, on the other hand, prefer using mobile wallet to make payments. Currently, Singapore is one of the leading markets in the world for contactless payments, with more than 4 million Visa payWave transactions made in a month. More than one in three Singaporeans use Visa payWave for face-to-face transactions. The penetration is even higher in supermarkets, where more than half of the cashless transactions for Visa are contactless. Visa’s 2015 Consumer Payment Attitudes Survey showed that 58% of Singapore consumers would prefer making in-store purchases with mobile wallets such as Samsung Pay, Apple Pay and Android Pay, rather than cash.

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2. Shopping Trends

In the case of Indonesia and Malaysia, one can see an increase in the purchasing of motor vehicle. Motorcycles exports have also gone up in Indonesia by 87% percent in February 2016. Motorcycles being the major transportation mode in Southeast Asian countries. The rise or fall in motor vehicles sales significantly displays the purchasing power of the population here. Other than that, the category of fashion and clothing and electronic appliances are popular and trending among Malaysian, Thai, Vietnamese, Philippines and Indonesians consumers. These categories gather more attention than other categories, like home furniture. On the other hand, Thai consumers are very interested in antiques and collectibles items.

3. Security is Important

Credit card security remains a key concern for consumers across the region with five of the six Southeast Asia markets ranking above the global average with respect to their concern around providing credit card information online. Philippines are the most cautious when it comes to paying online by credit card (67% do not trust giving their credit card information online). It is followed by Thais (62%), Indonesians (60%), Vietnamese (55%), Malaysians (52%) and Singaporeans (41%) compared to 49% of consumers globally. In order to gain the trust of consumers, online retailers must look for opportunities to provide reassurances around online payment security.

Concerns about online security escalated when overseas websites were involved. Most of the customers saying they would be more anxious about buying from these retailers than local sites. Building an ecommerce store around secure payment processing isn’t enough. You must also display important trust signals like digital certifications and payment authentication throughout your site. The majority of the shoppers report that seeing these makes them feel safer about their purchases. Online payment security should be every business’s ultimate priority in 2017. Invest some money in PCI-compliant payment processing and secure gateways. Other methods used are tokenization system and point-to-point encryption.

4. Shoppers crave for ease and convenience

Convenience can sometimes appear to be the most powerful force in the universe, and this scenario is no different. With the move towards urbanization in some of the world’s largest markets, there is now an extra bonus to making the customer’s life easier in Southeast Asia. From packaging to the place of purchase to point of sale, consumers seek ease above everything else.

As Southeast Asian consumers become more familiar with online retailing environments, they are looking to broaden the number of tools and apps they use. Both as a mean of making their shopping experience easier and more convenient. Not only that, it is easier to seek out the best deals. Emerging ecommerce capabilities such as grocery list apps, tools and discount alert apps are beginning to gain traction across the region, particularly in Thailand and Vietnam.

5. More shoppers prefer online purchases

More than half of Vietnamese netizens (56%) said they use price-saving apps in-store and when planning their shopping trips. The remaining 44% manage their grocery list with grocery retailers’ mobile apps and online tools. In Thailand, 55% use price-saving apps when planning their shopping trips and 44% use price-saving apps in-store. In the meanwhile, 40% use grocery retailers’ mobile apps and online tools to manage their grocery list. Most consumers prefer applications that will ease their shopping experience and convenient.

Travel services such as airline tickets, tour and hotel reservations are the most commonly purchased items online in Southeast Asia. Aside from those, tickets for events such as movies, live performances, exhibitions and sports games can be purchased easily. Singaporeans have the highest online purchasing intention globally for airline tickets and hotel and tour reservations.

The second highest intention is for event tickets. Around seven in 10 Singaporeans plan to go online to purchase flights (70%). In the meanwhile, 69% make hotel and tour reservations within the next six months. Malaysians’ online purchase intent is also high, with Malaysia ranking second globally for tours and hotel reservations. The third globally for intention to purchase airline tickets and event tickets online. Around half of the consumers in Indonesia, the Philippines and Vietnam intend to make travel and event purchases online. This number is along with approximately four in 10 consumers in Thailand.

Article by Nurin Fatini Abdul Ghani

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