Mobile commerce and Asia’s millennials: a match made in retail heaven

The millennial generation, fast and furious as they scroll through shiny screens on their mobile devices, are somehow able to consume content at “lightning fast speed”.

Calling it “F1 in terms of how the brain works”, Twitter’s head of research in Asia Pacific and MENA Martyn U'ren, who spoke alongside Twitter’s Southeast Asia MD Arvinder Gujral recently at the Money 20/20 Asia conference in Singapore, suggested this consumption behaviour is less about mindless scrolling than active processing.

“What we see in campaigns is that we can actually see some brands able to communicate [to them] in the first 0.25 of a second,” U’ren said.

Enter the Asian millennials

The size of the millennial pie is huge in APAC, where numerous statistics show the domination of this demographic in the region.

For instance, market research company eMarketer forecasted Asia to be home to over half of the world’s millennial population by 2020 – though right now in 2019, the millennial population in India already outnumbers that of the US, while the number of Chinese millennials alone dwarfs the entire US population.

What’s more, Asian millennials are optimistic about the future.

“They are also confident they will live a better life than their parents,” added U’ren.

“Technology is the main reason why they feel this way.”

That millennials have such a voracious appetite for mobile content also speaks volumes about their consumption patterns and purchasing propensity on mobile platforms.

Mobile payments set to soar

Referencing Twitter’s recent Mcomm 2.0 study, which surveyed 7,500 respondents across 15 markets, U’ren said that mobile payments are set to increase across all categories globally.

“When we asked people in 2017 what they are planning in 2018 to increase purchase of, across all of the categories, they can see themselves using mobile payment terms to literally buy almost anything online,” said U’ren. “When we asked the same questions again in 2019, the increase was even more stark.

“It’s just gathering even more momentum as we go through this.”

However, Asia is leading the way for mobile-based shopping over physical stores, with quite a push from the millennial market, for whom mobile shopping seems to hold special appeal:

1. From cosmetics to concert tickets, they are shopping on their mobile for everything

Surveyed about their platform preferences for online purchases across categories, Asian millennials tipped 12 out of the 16 categories – including clothes, cosmetics, flights, hotels and even money transfer – to be mobile-centric categories for them.

“The Asian millennials are very much more comfortable using their mobile for a huge range of services,” said U’ren. Their Western counterparts, for their part, were much less inclined to make mobile purchases. Only one category (food delivery) was seen to be mobile-centric for them.

2. They are shopping on their mobile devices exclusively

What Twitter’s research also found is that 42% of Asian millennials are mobile shopping exclusively, compared to 27.2% of the older generation.

“Asian millennials have almost exclusively gone to using their mobiles,” said U’ren. “They are rejecting the PC and the in-store experience.”

3. They are shifting categories towards m-commerce

Compared to the older generation, Asian millennials are:

• 51% likelier to shop for clothes on their mobile,

• 61% likelier to use their mobile devices for food delivery,

• 64% likelier to transfer money on the go through mobile transfers.

“If you think about, maybe four or five years ago, there is really a shift in the industry,” he observed. “It’s almost instantaneous, and you can get it straight away.”

4. For them, quality matters more than packaging; social proof persuades more than advertising

“The Asian millennial is a little bit more focused about quality, while the Western millennial is a little bit more about the packaging,” said U’ren of the nuances between the two. “Influencers and social proof are very big in Asia versus direct ads.”

5. They are not so concerned about transaction safety

According to the study, only 18% of Asian millennials care about transaction safety compared to older generations – which may be a contributing factor as to why they readily shop on their mobile. “It’s not really something they are worried about,” said U’ren.

6. Their reward is time

Reclaiming time is what Asian millennials get out of mobile shopping. On the Twitter platform, numerous tweets are sent about the time that is saved from not having to, say, stand in a long queue over the weekends, just to pay for groceries at the supermarket.

“We see this all the time,” said U’ren.

With Twitter research showing that 45% of Twitter users visit a physical store first and then make their purchase on mobile, versus 24% of non-Twitter users who do so, U’ren predicted that this is set to “happen more in the future”.

“They see nothing wrong with going into a physical store and taking a photo, and going outside and buying it online. We can only see this trend increase moving forward.”

M-commerce moves into the future

The lines between traditional retail and e-commerce are blurring, and as U’ren pointed out: “In the past three years, we have seen some crazy developments.”

In India, where online retail accounts for just 3% of overall retail, he said US e-commerce giant Amazon is approaching the market with a combined online-offline strategy to capture share: “We see Amazon playing the long game: ‘We’ll create physical stores, we’ll get people to lean into this experience of using mobile payments and digital wallets.’”

Elsewhere in the region, automated offline retail stores the likes of Amazon Go in the US and Hema in China are taking off, while Chinese e-commerce behemoth Alibaba signed an agreement last December to open an e-commerce trade hub in Belgium.

Then there are the numerous acquisitions to boot. While e-commerce companies are breaking into brick-and-mortar territory, the reverse is also true. Last year, US retail chain Walmart acquired Indian e-commerce company Flipkart; Alibaba acquired Singapore-based e-commerce marketplace Lazada in 2016, which in turn acquired online supermarket Redmart that same year; in 2017, Amazon acquired US wellness-focused supermarket chain Whole Foods and Middle Eastern e-commerce firm Souq.

Even conglomerates such as CPG giant Unilever and LVMH have e-commerce acquisitions; the former acquired indie online start-up Dollar Shave Club in 2016, while the latter acquired cosmetics e-commerce start-up Luxola in 2015.

One exciting development is in furniture, a category usually thought of as mobile-resistant. For instance, home design apps such as Houzz now allow users to visualise how furniture looks at home through an augmented reality mobile feature – and from there, reduces the friction of buying furniture through mobile: “No longer do you have to hike down to the IKEA store, you can now use AR,” U’ren said.

Moving ahead, U’ren predicted that previously mobile-resistant categories such as furniture will be set for increased adoption – with Asian millennials leading the way, of course.

“We always thought that nobody would be able to buy a sofa or a large household item using their mobile,” he said. “Technology has just moved through that. All of a sudden, there’s going to be great disruption in the area.”

“There is a great opportunity to move things out, from this part of the world.”

Source: WARC - Written By: Low Lai Chow