New research commissioned by UPS into what consumers want from their online shopping experience reveals that those in Asia Pacific seek visibility throughout the purchase cycle and incentives that add value to the shopping process. Customised shipping options and fuss-free returns policies are also appreciated, but the study highlights that regional satisfaction with returns is low.
Now in its seventh year, the UPS Pulse of the Online Shopper study sheds light on consumer online shopping behaviour. It also, for the first time, features insights into the buying habits of business purchasers. Conducted in Australia, China, Hong Kong and South Korea, as well as 11 other markets across the Americas, Europe and India, the study tracks evolving trends and demands from e-commerce customers.
Narrowing in on the moments that matter in the purchase journey, the research unearths valuable insights for businesses looking to grow their customer base in Asia Pacific. The findings reveal three overarching factors that impact consumers’ purchasing decisions – visibility across the purchase journey, incentives offered, and ways in which shoppers can customise their purchase and delivery experience.
“Consumers in Asia Pacific are increasingly knowledgeable about the options available to them when shopping online, and this is driving a demand for complete clarity and access to information throughout the purchase journey, as well as greater flexibility in both the shopping and shipping process,” said Sylvie Van den Kerkhof, Vice President of Marketing, UPS Asia Pacific.
“As consumers are presented with more options to buy online and competition increases, expectations are becoming more refined and retailers need to be agile enough to stay ahead of the trends. The ability to offer incentives not just in the form of a unique product offering but also in the shipping and delivery experience will be crucial to success in the evolving e-commerce landscape.”
“Malaysia has become a strong player in international e-commerce over the years, and growth is projected to continue as targets have been set for e-commerce to contribute RM211 billion to the national economy by the year 2020” said Lim Tze Hsien, Managing Director of UPS Singapore and Malaysia. “Malaysian businesses are no doubt innovating and seeking to optimise their online strategy to capture market share across the Asia Pacific region as they work towards this goal. The insights gleaned from the UPS Pulse of the Online Shopper study will be indispensable to them, as they tailor their approach more sharply to exceed the expectations of both retail and business buyers.”
Shoppers want answers before they commit
A significant 90% of all consumers globally research their product before proceeding with a purchase. While price is the most commonly researched information worldwide, by comparison it is less important for consumers in Asia Pacific (74%), than for those in the Americas and Europe (both 81%).
Reviewing a retailer’s returns policy is often part of the pre-purchase process, with 42% of online shoppers in Asia Pacific doing this before making a transaction, reinforcing why it is important that retailers make this information clear and easy to find.
Furthermore, the findings identify that shoppers may cancel a purchase when they find out the retailer is based internationally, if they were unaware of this initially. 77% of shoppers in China have done this, as well as 65% in Australia, and 60% in Hong Kong and South Korea. At the same time, 75% of all shoppers in Asia Pacific have knowingly made purchases from international sellers, suggesting that online shopping is situational and, with international purchases likely taking longer to arrive, how long a customer is willing to wait may depend on what they are buying.
Shipping incentives and customer service drive repeat business
Continuing the trend from previous years’ studies, consumers still value free shipping, as highlighted by the fact that high delivery cost is the most common reason for an abandoned shopping cart. Asia Pacific shoppers will often take actions to reduce shipping costs, with 37% indicating that they are willing to add items to their cart to qualify for free shipping, and 27% saying they would purchase an alternative product priced above the retailer’s free-shipping threshold. These figures indicate that shoppers can actually be incentivised to spend more on the actual purchase, if this action will reduce the cost of shipping.
In addition to being a key part of the pre-purchase routine, a good returns policy can also encourage customer loyalty. And with just 5% of Asia Pacific shoppers saying they are “very satisfied” with the returns process, there is huge potential for retailers with a good returns policy to rise above the competition. The common causes of dissatisfaction with the returns experience were a delay in receiving refunds (cited by an average of 32% of respondents across the region), having to pay for their own returns (31%) and delays in receiving a replacement product (25%).
Furthermore, shoppers have been empowered to “vote with their clicks” when they have bad experiences with a merchant. In Asia Pacific, 93% of consumers who receive poor customer service will either stop using that merchant or reduce how often they purchase from them. This is most apparent with South Korean shoppers; 70% of whom will stop buying from a merchant altogether due to bad customer service.
I want it my way
The popularity of alternative delivery locations in Asia Pacific is a continuing trend, with the study finding that only 36% of the region’s consumers prioritise receiving their package in-person at their home – compared to 62% in Europe – while 19% are happy to have the package left on their doorstep or porch.
Consumers in Asia Pacific are also more likely to know about and make use of specialised delivery services, such as UPS My Choice®. The ability to select shipping options offers added convenience, with the research revealing that the ability to choose a delivery day has the greatest appeal.
As an alternative to purchasing directly from a retailer, marketplaces are also a popular purchasing platform, with 93% of Asia Pacific shoppers having purchased from a marketplace in the three months prior to the survey. The region has notable market-level variations when it comes to the marketplace that businesses should take into account and cater to – 100% of respondents in China had made a purchase from one of these platforms in the three months leading up to the survey, whereas 14% in Australia and 10% in Hong Kong don’t use marketplaces at all, the highest rates of non-usage in the world.
Business purchasers think like consumers
Expanding the study to cover B2B purchasing this year, the findings show that business buyers follow many of the same trends as consumers.
Similar to the consumer shopper, 96% of Asia Pacific buyers consider the ability to track packages important, with the preferred method of tracking deliveries being a carrier’s website. 92% of business purchasers would like to see all elements of their delivery managed by the supplier or shipper, and this is particularly so in Hong Kong, where respondents unanimously chose this option.
One area where the responses differed however was that while 42% of B2C buyers will check the returns policy before making a purchase, this number jumps to 71% when it comes to business purchasers, even when the buyer already has a contract with the supplier.
Furthermore, business purchasers in Asia Pacific are more likely than the global average to purchase products from non-domestic marketplaces, with 71% purchasing internationally, the highest percentage of all regions surveyed. Of those that purchase internationally, 42% stated that they did so because of higher product quality, while 41% said it was because the product they wanted could only be bought from international suppliers.
One area of commonality among business purchasers globally is the importance of knowing the fully-landed cost, or the total price of a product once it arrives at their location. Asia Pacific confirms this trend with 94% of buyers in the region indicating that this is important to them.
“For both consumers and business purchasers, the 2019 UPS Pulse of the Online Shopper reveals that here in Asia Pacific, we are navigating a world of choice and we expect to make purchases on our terms,” added Van den Kerkhof.
“In a crowded space like e-commerce, the kind of insight revealed by the Pulse of the Online Shopper study can make all the difference in helping businesses stay one step ahead – today, tomorrow, and next year.”
About the UPS Pulse of the Online Shopper
The UPS Pulse of the Online Shopper™ global study evaluates consumer shopping habits and preferences from pre-purchase to post-delivery. The 2019 study was fielded between December 2018 and January 2019 and is based on a PwC survey of more than 18,000 online shoppers worldwide. In Asia Pacific alone, the survey included 4,023 respondents in Australia, China, Hong Kong, and South Korea.