By Emmie V. Abadilla
More Filipinos will buy online if the shipping and return of goods are free.
Significantly, although more Asians are now making online purchases using their smart phones, they are the least satisfied shoppers worldwide because shipping is free on just 15 percent of orders.
Asians also like to buy from fellow Asians. The bulk, or 90% of Asian online shoppers, bought from a small retailer while 55% purchased from international retailers, 77 percent of whom are based in Asia.
“And it is vital that retailers know how to cater to and adapt to the changing needs of online shoppers,” Sylvie Van den Kerkhof, Vice President of Marketing, UPS Asia Pacific, underscored.
“As they gain the benefit of greater choice, they dictate the terms of their buying experience.”
In fact, the rising expectations of Asian online shoppers drives demand for free shipping, expedited deliveries and customer-centric return policies to become the standard, according to the UPS-commissioned “Pulse of the Online Shopper Study,” now on its sixth year.
“As retailers in the Philippines look toward global markets, they can draw insights from this study to fulfill the dynamic online shopping experience for consumers and their future shopping demands,” noted Chris Buono, UPS Philippines Managing Director.
“Analyzing the mindsets and motivations of thousands of shoppers around the world reveals that, far from being a sunk cost, clever shipping and returns solutions are areas where retailers can win and retain customers, drive repeat patronage and encourage shoppers to add more items to their carts – both online and in-store,” according to Van den Kerkhof.
The UPS global study evaluates consumer shopping habits and preferences from pre-purchase to post-delivery. The 2018 study was fielded in the first three quarters of 2017 and surveyed over 18,000 online shoppers worldwide.
In Asia alone, the survey included approximately 3,200 respondents in China, Hong Kong, and Japan.
The study categorized results into three areas – Constants, Movers and Emergers.
Under the “Constant,” Asia online shoppers remain dissatisfied and continue to seek free, fast shipping and returns.
Just 57% of shoppers in Asia are satisfied with the online shopping experience, the lowest percentage compared to other regions surveyed. It was an improvement of only 11-percentage points since 2015, when it was 46%, demonstrating the slow pace of change in addressing customer satisfaction.
Other areas of the retail experience that remain important year over year and influence purchase behavior include the importance of free, fast shipping, as well as free and easy return policies.
Asia’s online shoppers enjoyed free shipping for 85% of their orders, proof that retailers who offer it gain a competitive advantage.
Nearly two-thirds of respondents in Asia indicated that free shipping is an important factor in the checkout process, with 46% of shoppers adding items to their cart to qualify for it.
About half of Asia online shoppers have abandoned a cart due to no delivery date being given or delivery time being too long, with the average delivery wait leading to cart abandonment being 11 days.
Meanwhile, a convenient and transparent return policy increases sales and customer satisfaction, with 67% of shoppers in Asia indicating that free shipping on returns is important when selecting online retailers.
This is an area where retailers in Asia must do more to improve their service as only 47% of shoppers are satisfied with the ease of making returns, even though four in 10 have actually returned an online purchase in the past year.
Furthermore, 79% of shoppers returned only 10% or less of their orders. Among these, 69% made new purchases when returning an online order in-store, and 67% bought new items when returning online, demonstrating a strong business case for offering a fuss-free return service.
Under the “Movers” area, the study noted that Asian consumers have become comfortable with shopping on smartphones, selecting ship-to-store and buying from international retailers and small businesses.
Smartphone purchases have become the norm as 77% of shoppers have placed orders on their phones – the highest percentage globally, up from 55% in 2015. In the U.S., only 48% of American smartphone users made online purchases on their device.
Ship-to-store is growing in popularity, with 37% of shoppers using it in the past year and 59% of those planning to use it even more this year.
Notably, it can be a lucrative offering for retailers, as 60% of Asia shoppers who used ship-to-store in the past year made additional purchases while in store. The percentage is even higher in China at 74%.
“Asia’s online shoppers are now buying from a more diverse set of retailers –from major marketplaces to boutique shops, from domestic and foreign stores,” Van den Kerkhof pointed out. “There’s a viable opportunity and customer base for small businesses in Asia to expand internationally, and it’s set to grow larger.”
The UPS study found that 55% of online shoppers in Asia are embracing international retailers. Among those, 49% of buyers ventured to overseas retailers because the brand or product was not available domestically, or the quality (39%) or price (38%) was better internationally.
As mentioned before, Asians also like to buy from Asians. Some 77% of those who made an international purchase made one from a retailer within the region, while 31% have ordered from retailers in the United States.
Hong Kong had the highest percentage of online shoppers making international purchases at 82%, followed by China at 64%. Meanwhile, only 21% of Japanese shoppers did so, indicating their strong preference for domestic goods.