GlobalData forecasts the APAC eCommerce market to grow from $1.6 trillion in 2018 to $2.3 trillion in 2022
Alternative payment methods such as mobile and digital wallets are steadily displacing traditional payment methods such as cards, bank transfers and cash/cheques in the Asia-Pacific (APAC) eCommerce market.
According to the latest Consumer Payments Insight Survey, alternative payments grew from 49% in Q1 2017 to account for 51% of the total eCommerce transaction value in APAC in Q1 2018.
At the same time, payment cards accounted for 28%, bank transfers 15%, and cash/cheques 6%.
“Adoption of alternative payments in the APAC region has occurred well ahead of that in the West,” says GlobalData payments senior analyst Ravi Sharma.
“Asia's card infrastructure and payment behaviour are not well entrenched and therefore alternative payment tools offer a welcome substitute to cash. Rising smartphone penetration coupled with a large unbanked population has also turned the region into a potential growth market for alternative payments.
The alternative payments market in APAC is mainly driven by China, where alternative payment solutions accounted for 53% of the total eCommerce transaction value in Q1 2018.
Alipay remains the most popular tool overall with a 41% share, followed by WeChat Pay with 7.1%.
Tencent, which owns the Tenpay brand, introduced WeChat Pay to leverage the popularity of its social media app WeChat, which has a huge customer base of around one billion.
Similarly, alternative payment tools account for nearly one-third of the total eCommerce transaction value in Australia in Q1 2018, with PayPal being the preferred solution with a share of 15.9%.
“With Asian consumers keen to embrace digital payments, rising smartphone penetration and launch of new digital payment solutions are expected to further propel the growth of alternative payments in the region's eCommerce market,” adds Sharma.