Adyen is an international payments facilitator which lets companies accept payments worldwide from all sales channels through a single, scaleable payment platform. Its chief operating officer Sam Halse has some advice on how Kiwi businesses can serve their Asian clients better.
Can you explain how Australian and New Zealand businesses are dropping the ball when it comes to dealing with Asian consumers?
According to Adyen’s quarterly Mobile Payments Index, which tracks global mobile payment data, 34 percent of browser-based online transactions globally are now made on a mobile device. The increase is driven particularly by the use of major Asian-based payment methods including JCB, UnionPay, and Alipay. Around 700 million people online, in China alone, access the Internet through their mobile device.
In Asia, where mobile payments are becoming the norm, creating a fast and hassle-free experience has to be a key focus in a merchant’s mind. In fact, we have found, for example, that offering one-click payments within an app increases conversion by up to 30 percent.
The best way to build relationships with Asian shoppers is the same as any other – simply to deliver great experiences. From a payments perspective, this means delivering a seamless, frictionless experience regardless of the device, payment method, or market.
What, in your opinion, are the key differences between the expectations of Asian consumers and New Zealanders?
Our data shows that New Zealand tends to be a card-dominated market, and so the merchants will have to adjust expectations when venturing into Asia.
Asian markets have a wide range in their levels of ecommerce penetration and payment cultures. For example, there are advanced m-commerce and mobile payment markets such as China, and markets in which cash-based payment methods still account for the vast majority of transaction volume, including for ecommerce, such as Indonesia.
Expectations around security also differ. In markets such as China, consumers perceive local forms of payment as more secure than international payment methods, whereas in other markets like Indonesia, there is still a lack of trust around online payments in general.
We’ve discussed two key differences – the predominance of mobile and the preference for local payment methods – areas that Adyen can help a merchant resolve. More importantly, though, in today’s omnichannel environment, delivering the right customer experience is key. Stand-alone sales channels are confusing for consumers, as they don’t support the vision of a single seamless shopping experience. Customers feel like they are dealing with different merchants as they move across channels, rather than a single merchant with multiple channels. This fragmented customer experience can result in missed sales opportunities – this especially holds true when purchasers are buying from a merchant from the first time. In our opinion, creating the frictionless path to purchase should be the priority for merchants looking to enter Asian markets.
Simon Draper, director of the Asia New Zealand Foundation, said last year that he feels New Zealand business people have misread what Asian business people mean when they talk about building relationships. He says Kiwis understand commercial relationships as purely mercantile and short-term – “By ‘relationship’ we actually just mean ‘we want to sell you things’” – but their Asian counterparts are seeking a more long-term investment. What’s your perspective on Draper’s opinion?
We believe that the most important thing is for retailers to build deep engagement with their consumers. Regardless of where the consumer is from, we see that everyone expects a frictionless payment experience. From the payments point of view, the focus is creating an experience that moves a customer towards building a relationship with the merchant based on trust. By delivering that, merchants anywhere can expect to build a long lasting engagement with customers.
Draper believes one way to deepen relationships is for more Kiwi businesspeople to learn Asian languages. This works well from an executive perspective but is not practical for a large retailer seeking to help staff on the shop floor relate better to Asian customers. Do you have any suggestions for retailers in this position?
Learning local languages can help, but there are many proficient English speakers in Asia. Staffing the retail shop with a few key Asian language speakers may help, but one very easily implementable and practical piece of advice to help Kiwi businesses increase sales to Asian shoppers is to make sure they offer the payment options Asian shoppers use and trust. For retailers operating bricks and mortar stores, this means offering payment methods such as UnionPay and JCB to Asian shoppers.
Is it possible for ecommerce retailers to increase Asian web sales by offering a particular payments channel?
It is absolutely possible for ecommerce retailers to increase Asian web sales by offering particular payment methods. In fact, a number of our own customers are expanding globally with just an English-language global website and by dynamically offering targeted payment methods based on the shopper’s location. One example is Daniel Wellington, which went global to over 100 markets with an English-language website and by dynamically offering geo-targeted local payment methods across Europe and Asia – including Alipay in China.
Payment preferences vary widely across the region. In China – the world’s biggest ecommerce market – the payments landscape is dominated by three local payment methods – Alipay, UnionPay and Tenpay, with international credit cards accounting for as little as one percent of transaction volume. Offering at least Alipay and UnionPay is absolutely crucial to reaching the vast majority of shoppers in the market.
Across Southeast Asia, methods such as ATM transfers and cash-on-delivery remain the most popular payment options, and should be considered of primary interest by companies expanding in the region. And finally, while credit card penetration is relatively low in most markets apart from Singapore, it should be kept in mind that shoppers using cards to pay online generally have a higher level of discretionary spending and more awareness of international brands than the average local shopper.
What’s the most important thing for Kiwi retailers to understand about Asian consumers and their needs?
Above all else, whether selling to Asia or elsewhere, New Zealand retailers should make the payment step as frictionless as possible. At the heart of this shopping experience, payments have become a key element that directly impacts revenue. Optimising payment acceptance – whether through targeted payment methods, one-click payment flows, or A/B testing page design to incrementally increase conversion rates, strengthens that relationship with consumers and can significantly increase online revenues.
There are many moving parts and payments play a key role in streamlining the customer experience. However, it is unlikely that a single “big bang” approach will work and merchants should fine-tune the payment experience over time – reviewing payment methods and changing consumer experiences to stay relevant.