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Emerging markets, shipping needs targeted for Asian e-commerce growth

At the Retail Asia Expo in Hong Kong on June 12, industry insiders discussed topics including growth markets, logistics and customer experience during the day's schedule of seminars.

Upbeat outlook on tiger economy

In its latest push into Southeast Asia, JD.com Inc. plans to soft-launch its JD Central website in Thailand June 18, said Ben Chuk, the Chinese e-commerce giant's senior business development representative.

He told a seminar audience that the site will be operated by a joint venture that the company formed in 2017 with Thai conglomerate Central Group, with the move reflecting JD's commitment to developing the region's emerging markets.

The online retailer — which has about 302 million active users, mostly in China — started its overseas expansion in Indonesia by setting up wholly owned JD.id in late 2015. Since then, the company's Indonesian investments have extended to local ride-hailing startup Go-Jek and travel-booking service Traveloka, according to Chuk. In Vietnam, JD has invested in business-to-customer e-commerce platform Tiki.vn.

Chuk said JD would be making further investments in Southeast Asia beyond these initial locations. "The total population of these three countries is almost one-third of that in China. With that, there is great potential for e-commerce development," he added.

Switching to the topic of how technology is escalating the transformation of retail, Chuk said consumers' trust in products is quickly shifting from brand owners to online reviewers, while personalization and customization options are increasing.

He believes solutions for the future of retail will ultimately rely on the so-called "ABC technologies," or artificial intelligence, big data and cloud computing.

Addressing trends in logistics

With the global cross-border e-commerce market on track to grow in transaction size to more than US$1 trillion by 2022, logistics are no longer about picking up a package and delivering it on time to the right location, said Lauren Zhao, managing director of UPS Hong Kong and Macau.

In addition to expecting free shipping, customers also want orders to arrive quickly and are willing to pay a premium to ensure faster shipping, Zhao said during a separate seminar at the Retail Asia Expo. "It's clear that consumers have very demanding expectations, and being able to meet these expectations will be the differentiating factor that determines retailers' success."

An area of service frequently overlooked by retailers in Asia is merchandise returns. About four in 10 online shoppers made a return in 2017, according to results from a UPS survey of more than 3,200 buyers in China, Hong Kong and Japan which were cited by, Zhao. "The research shows that only 47% of shoppers are satisfied with the ease of returns. ... Both in-store and online returns drive incremental purchases for consumers in Asia," she added. "It is a prime opportunity for retailers to create a comprehensive advantage by implementing simple solutions [to returns]."

The survey also showed that 55% of Asian online shoppers made purchases from international retailers over the past year. "For businesses looking to attract shoppers in this market, a reliable retailer is the most important factor for China, Hong Kong and Japan consumers making an international purchase, followed by transparent total cost, reasonable delivery time and a transparent return policy," Zhao said.

In addition, Asia is set to overtake the U.S. and Europe in terms of consumers making purchases online, according to Zhao. She said this would be driven by explosive growth of the middle class, improved internet connectivity, universal adoption of mobile devices and government initiatives to promote e-commerce as the primary channel for selling internationally.

Keeping up with customers

While products and services have been at the core of retailers' operations, customer experience is increasingly becoming a key factor to success, according to Malcolm Koh, customer experience strategist for San Francisco-based customer service software firm Zendesk Inc.

He told expo attendees at another seminar that it was particularly essential for retailers to integrate their back-end operations across multiple channels, pointing to the risk of shoppers defecting to another brand due to a poor customer experience.

"You can't just open channels anymore and expect your customers to be there," Koh said. "You need to create seamless experiences, which is what omnichannel is defined as, versus just having all the channels open."

He highlighted Apple Inc.'s customer service as a negative example, because customers are asked to explain their tech issues with an on-site service representative again, after having already communicated about it with online experts and booking an in-store appointment.

"The expectation today is that as I move through [a retailer's] channels, they already know what I'm there for — it should be coming from the same system and same back-end," he said.