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Expansion into the Asian e-Commerce Market Challenging Despite High Growth Expectations: NTT Communications Survey

While over 80 percent of global online merchants plan on expanding their e-Commerce businesses in Asia over the next 12 months, almost all respondents (99 percent) say they face obstacles in gaining a firm foothold in the market, and in particular China, according to research by NTT Communications.

The survey, Breaking into the e-Commerce Market in Asia: Opportunities and Challenges, interviewed 200 United Kingdom and United States based decision-makers from the retail, gaming, travel and hospitality industries to evaluate the business potential of Asia’s e-Commerce market, the challenges merchants face, and the role that payment solution providers should play in helping merchants overcome these challenges.

Two-thirds of respondents forecast the volume of their companies’ e-Commerce transactions in Asia and China to increase by 10 and 50 percent in the next three years, reflecting the promising business potential of the market. However, the study also reveals a number of local challenges that merchants need to overcome to successfully grow in the region.

Other key findings include:

  1. Over 80 percent of respondents consider global e-Commerce crucial to the success of their businesses.
  2. Greater China is a high-potential market for e-Commerce. Mainland China (79 percent), Hong Kong (66 percent) and Taiwan (57 percent) top the list as the three most popular Asian destinations for e-Commerce expansion in the next 12 months.
  3. Challenges most respondents face when delivering e-Commerce in Asia1 include local tax regulations and compliance (50 percent), local market needs (46 percent), language barriers (44 percent), shipping difficulties and cost (42 percent), local preferred payment types (37 percent) and cross-border currency settlement (37 percent).
  4. Acquirer connections (45 percent) topped the list of key success factors for delivering e-Commerce in Asia and China. This is followed by risk and fraud management (43 percent), global acquirer connections (35 percent), acquirer connections in Asia (30 percent) and alternative payment methods (30 percent).

Payment solution providers integral in helping merchants adapt to unique Asian e-Commerce landscape

Tyrone Lynch, Vice President, eBusiness of NTT Com Asia said, “Asia holds a lot of potential for global e-Commerce merchants and yet their success is being hindered by a lack of local knowledge necessary in overcoming operational challenges, such as currency restrictions, tax regulations, licensing requirements and local payment methods. A payment solution provider with strong local acquiring capabilities is needed to help them navigate the complex and dynamic e-Commerce market of Asia.”

Lynch continues, “China, in particular, is in a unique situation where conventional and mainstream payment methods used internationally are not prevalent. Understanding the unique payment landscape in China, while providing consumers with the ability to pay in their preferred local methods is critical for success in this vast and fast-growing market.

To this end, NTT Communications has introduced its e-Commerce payment solutions aimed at helping e-Commerce companies expand their online presence and mitigate local market challenges.”

To download the report Breaking into the e-Commerce Market in Asia: Opportunities and Challenges visit www.nttcominsight.com

- Report Video Highlights

1 Excludes mainland China

Methodology

NTT Communications commissioned market research firm Vanson Bourne, to conduct research on 200 decision-makers from companies with e-Commerce business within the retail, gaming and travel / hospitality sectors in the United Kingdom and United States of America. To qualify for the research, respondents’ companies must have an annual revenue of US$12 million or more from their e-Commerce operations and have engaged in e-Commerce with Asia and / or China.

About NTT Communications

NTT Communications provides consultancy, architecture, security and cloud services to optimise the information and communications technology (ICT) environments of enterprises. These offerings are backed by the company’s worldwide infrastructure, including leading global tier-1 IP network, Arcstar Universal One™ VPN network reaching 196 countries/regions, and over 150 secure data centers NTT Communications’ solutions leverage the global resources of NTT Group companies including Dimension Data, NTT DOCOMO and NTT DATA.

About NTT Com Asia

NTT Com Asia is NTT Communications’ East Asia headquarters covering Hong Kong, Macao, Taiwan and Korea. The company provides enterprise-class network, data centre, cloud, hosting, e-Commerce solutions, and managed services, and operates its’ wholly owned subsidiary HKNet in Hong Kong.

Please visit www.ntt.com.hk | www.hknet.com | www.facebook.com/nttca | http://www.linkedin.com/company/ntt-com-asia-limited for further information.

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