From contactless payments to supporting logistics, the e-commerce industry promises to be a key driver for economic recovery in Asia.
With the onset of the worldwide COVID-19 pandemic, e-commerce has grown steadily in importance, helping to keep the wheels of the economy turning as the world retreats online.
At the StartmeupHK Festival 2020 conference earlier this month, three notable figures came together virtually to discuss how e-commerce can help Asia get back on its feet. The panel, which took place on 8 July, included Donald Tan, Vice President of Strategic Solutions & Product Development at Visa; David Rosa, CEO and co-founder of Neat; and Eric Ng, CEO and co-founder of Boutir. Here are their top insights.
E-commerce will continue to be a key solution for the retail sector
As the pandemic continues to decimate physical retail, many international brands have become increasingly open to new solutions, seeking out e-commerce as a way to pivot.
For example, many traditionally brick-and-mortar sectors have entirely changed their stance on going online. Visa VP Donald relates, “They’re actually calling my colleagues and asking, ‘Do you have a way for me to get online and sell? You’re suddenly seeing a fishmonger selling their fish on a Facebook live stream – and they want to have a way to collect money.” Demand for a secure way of making and receiving payments has therefore grown enormously.
In addition, although smaller entrepreneurs may have seen a decline in revenues due to COVID-19, Eric, the co-founder of e-commerce platform Boutir, believes that the pandemic has actually given these decision-makers more time to familiarise themselves with the digital landscape. Whether that’s because of decreased in-person consumer interaction, the implementation of remote working, or city-wide lockdowns, this abundance of time has created opportunities for these entrepreneurs to learn how to create digital content, calculate conversion rates, or target the right set of customers, allowing them to innovate on all fronts.
Frictionless payments can help boost retail sales
While e-commerce is becoming increasingly mainstream, it is essential that payments are made as frictionless as possible – for both consumers and merchants. Already, payment services such as Apple Pay and Google Pay have been widely adopted – and 3-D Secure technology offers an additional layer of security for online payments via Visa, Mastercard, and American Express.
Citing biometric payment authentication as a burgeoning technology that decreases friction and increases conversion rates, Eric says, “This kind of payment method is simple … there’s no need to enter a credit card number. Just use face detection or touch ID, then the transaction will be completed.”
Smaller merchants can earn additional income via e-commerce
E-commerce can also be a fantastic way for small to medium-sized businesses to set up additional streams of income.
Using Boutir as an example, Eric emphasises the ease with which aspiring entrepreneurs can quickly go digital: “It’s not like setting up a physical store where you have to pay a lot of money to set it up. Our [online store builder Boutir] is really very easy and low-cost.” With a user-friendly mobile app, aspiring entrepreneurs can access an all-in-one e-commerce solution that handles payments securely and offers a range of data analytics tools.
With an ever growing range of e-commerce platforms including digital retail giants Alibaba, JD, and Shopify, businesses have no shortage of options to choose from when it comes to launching a digital storefront.
Furthermore, e-commerce offers unique opportunities for businesses to monetise niche or less lucrative items, given its low startup cost. Eric elaborates, “They can develop small pieces that cater to a thousand fans – that’s already [a] big enough [fan base] because the cost is low.”
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opportunities for digital commerce in Asia’s path towards recovery
Adjacent industries including FinTech and logistics will also thrive
As online sales have grown, adjacent industries such as logistics have also benefited from the increased demand – a shift which has provided opportunities for the industry to evolve and further optimise to accommodate the current market’s needs.
Similarly, the boom in online shopping has accelerated the adoption of novel FinTech solutions, including a wealth of new mobile wallet technologies and contactless payment services, which consumers might have been more resistant to prior to the COVID-19 pandemic.
Greater payment security will help create a more resilient e-commerce ecosystem
The acceleration of e-commerce has forced payment security to the forefront of public awareness.
Donald comments, “Security clearly has been accelerated a lot,” pointing to how both consumers and merchants rely heavily on trust in the financial infrastructure to drive transactions. “The expectations, the level of awareness are certainly high,” he continues, explaining that many consumers and merchants now expect payment platforms to provide one-time passwords for added security.
The active innovation in payment security standards works alongside the further development of the e-commerce industry. In addition to benefiting customers, Eric adds, “Having this kind of security actually also helps reduce friction for the merchant to do online payments.” Hence, heightened payment security measures do not have to be at the cost of frictionless payments.
As we begin to emerge from the COVID-19 pandemic, the e-commerce and FinTech industries should continue to be highly responsive to changing consumer needs and create solutions – what David terms “the auxiliary services that are not traditionally thought about” – based on those pain points. Whether that’s contactless payments, new integrated mini-apps, or innovative ways of ensuring digital security, one thing is clear: the coronavirus pandemic has marked a new era for the digital economy.