Any company with global aspirations cannot afford to ignore the Asia-Pacific (APAC) region. It’s a region that includes more than two billion people across more than 20 countries, ranging from Australia to Indonesia to China and Japan.
But it’s also a region with significant linguistic, cultural, and political diversity. The APAC acronym may be useful in helping to think regionally, but when it comes to expanding into a given region, the best thing you can do is quickly narrow your focus to one or two specific countries.
This article (the first of two) offers some high-level strategic best practices to consider and focuses on four countries: China, Taiwan, Japan, and South Korea.
If you’re largely targeting business customers, you’ll probably be fine (for now) if your website is only optimized for PCs. However, if you’re going after consumers, you should have a plan for how to reach these very mobile customers.
According to China’s Internet Network Information Center (CNNIC), there are now 460 million mobile web users in China. In many parts of Asia, an Internet user and a mobile user is considered one and the same.
Multi-national retailers like Amazon, eBay and UNIQLO have embraced mobile — not only with mobile-optimized websites, but also mobile apps. Shown here is an excerpt from Amazon’s Chinese-language app:
UNIQLO reported in June that more than 10 million Japanese mobile users have downloaded its mobile app and registered email addresses. These customers now have access to special member promotions, and UNIQLO now has a free marketing channel to a significant population of shoppers.
If the idea of building a mobile website or app from the ground up seems overwhelming, you’re not alone. When you consider the many challenges of entering an Asian market coupled with the challenges of building a successful mobile infrastructure, it’s clear why so many merchants are still in “wait and see” mode.
So instead of going it alone and building your own Asian retail operation, you may want to first consider leveraging existing local retailers throughout the region.
Think Local (As In Retail)
In Japan, Rakuten (screenshot on the right) is the leading major ecommerce player, followed by Amazon Japan.
If you don’t understand Japanese, don’t worry. Rakuten has global aspirations and provides merchants with an English-language interface for uploading product information and managing sales.
In China, Alibaba commands roughly half of China’s ecommerce market. For foreign brands, Alibaba offers TMall, which allows brands to manage customized, dedicated online shops. Participants include the Gap, Samsung, Reebok, and Samsung, to name just a few. Here is an excerpt from the Gap store:
In Korea, Gmarket and Naver are the major ecommerce players. Here is an excerpt from the Gmarket mobile app:
And don’t overlook eBay, which supports localized websites for 10 APAC countries, including Thailand, Taiwan, New Zealand, and Australia.
Finally, keep in mind that companies that tend to do best through local retailers are those companies that have brand names that users already recognize and value.
Look Beyond Visa and MasterCard
The nice thing about relying on third-party retailers is that you can let them worry about collecting payments. But if you do decide to accept payments on your website, you’ll want to expand your focus beyond Visa and MasterCard.
In Japan and South Korea, Internet users are generally more comfortable using credit cards for online purchases, and the major bankcard platforms (AmEx, Visa, MasterCard) are widely used. But in China, the dominant bankcard platform is UnionPay.
Union Pay is the state-sponsored bankcard association. To give you an idea of just how new credit cards are in China, UnionPay was founded in 2002. But UnionPay has been growing quickly and, according to BusinessWeek, there are now more than 2.9 billion UnionPay cards in circulation. Merchants outside of China are now embracing UnionPay to attract Chinese travelers.
You’ll also want to use PayPal in the region. PayPal supports currencies such as the Japanese Yen, Australian and New Zealand dollars, and the New Taiwan dollar. And Chinese consumers can link their UnionPay card to their PayPal accounts.
Logistically, you may also need to support unique delivery methods. For example, cash on delivery (COD) is very popular throughout Asia. Customers often prefer to hold the product in their hands before they pay for it. So what happens is products are ordered online and delivered by courier (such as by EMS in China and paid for at the time of delivery. Amazon is one of many online merchants that support COD.
In Japan, Taiwan, and South Korea many people will purchase goods online and pick them up and pay for them at their local 7-Eleven. Yes, 7-Eleven, the ubiquitous American chain is equally ubiquitous across Asia. There are more than 4,800 7-Eleven stores in Taiwan, 7,000 in South Korea and 15,000 in Japan.
Interestingly, this model of in-store pickup is now being tested in several US cities by whom else but Amazon.
Host Your Website As Locally As Possible
If your web server is based in the US, users across Asia may experience slow-loading web pages. And this can be a particularly acute issue in countries like Japan and South Korea, where so many Internet users benefit from some of the highest-speed broadband on the planet. Even if all you do is move images closer to users, you’ll save a few seconds. And every split-second counts.
China also supports broadband data, but you can only benefit from it if you host within the country. And hosting within China requires a license, so many companies host instead just outside of country and rely on third-party content delivery networks (CDNs). Popular CDNs include Akamai, Amazon Web Services, and CloudFlare.
Support Country Codes
Some companies have registered the .asia domain as a pan-Asian “front door” to their websites. But this domain is best used as a regional landing page only — one that users then click through to their country websites. Here are a few country codes you’ll want to consider registering:
- China: cn
- Japan: jp
- South Korea: kr
Country codes have different implementation rules and requirements per country, so that’s why you see eBay’s URLs vary as follows:
Despite upfront investment of country codes, they offer a number of benefits that make them worth the trouble. For starters, they signal to users that you have indeed created a local website. Amazon makes this loud and clear with its logo on its Japanese website:
Country codes also send a strong signal to search engines that your website is indeed local — resulting in improved search rankings (provided you’ve also invested in translation).
Think of country codes as virtual real estate. If you want to succeed in a region, acquire real estate that is virtually closer to your customers. And if you’ve heard of non-Latin domains for countries like China, Korea, and Japan — these too are worth considering (and the subject of a future post).
Next Steps: Localization
Now that you’ve considered the big picture questions about retail channels, payment methods, and web hosting, it’s time to start thinking about localizing your website and brand for the local markets. I’ll cover this in Part II; stay tuned!
Pitney Bowes enables operational excellence in global ecommerce by eliminating “border friction”, and connecting you to the a global consumer base. If you’re a US retailer looking for more information on cross-border parcel shipping, subscribe to this blog for weekly updates, and contact us for more information. Want to learn more, download our brochure or watch a customer testimonial.