(Source: Business World | September 13, 2018)
Customers in Asia are less satisfied with online shopping compared to those in other regions, a study organized by logistics company United Parcel Service (UPS) shows.
“UPS Pulse of the Online Shopper,” which surveyed more than 18,000 online shoppers around the world (3,200 of which are from China, Hong Kong and Japan), took a closer look at the shopping habits of online customers from pre-purchase to post-delivery.
The study found 57% of Asian shoppers surveyed were satisfied with their online shopping experience, compared to other shoppers in the United States (85% were satisfied), Europe (81%), Canada (77%), Mexico (87%) and Brazil (88%).
In an interview with BusinessWorld, UPS Philippines Managing Director Chris J. Buono said for Filipinos the online shopping experience is influenced by factors such as the speed of delivery, access to bank accounts and affinity for mall shopping.
“People want things faster here. If you’re ordering a lot, say from the US or Europe, the transit time to come over from the US could be up to four or five days. And people will want stuff faster,” he said.
“Customers are definitely getting more demanding from the experience — so the store concept online, and the check out process, and returns process. They want that to be fast, they want it to be easy. They don’t want to wait a long time. And that’s really kind of demanding both to shippers and logistics companies to ensure that we make that process as seamless and as easy as possible,” he added.
Mr. Buono noted one of the challenges for online retailers in the Philippines is the fact that the Philippines is still largely a cash-based society.
“The number of Filipinos that actually have bank accounts and the actual number of Filipinos that actually have credit cards is pretty low, it’s about 20%. And that obviously impacts people’s ability to shop online,” he said.
Data from the Bangko Sentral ng Pilipinas’ 2017 Financial Inclusion Survey showed only 15.9 million Filipinos, or one fourth of the country’s adult population, have access to bank accounts.
The lack of a credit card or bank account is discouraging shoppers from making online purchases. For some shoppers, they may look at products online, but actually buy them in physical stores where they can pay in cash.
“From a government, private perspective, the ability for having a payment system where people can use cash to purchase online, or say bill it to their phones, things like that, the more that Filipinos are able to get credit cards or bank accounts, you’re going to see a rise in the amount of online shopping,” Mr. Buono said.
The mall culture in the Philippines also makes it unlikely for online shops to replace physical stores.
“I don’t think (online shopping) will ever replace the experience of going to the mall. I think that’s a cultural thing that we see, where on Sundays, you go out, you go to the mall, you have lunch and you’re browsing around the store,” he said.
The UPS Philippines executive noted there is a growth in shoppers who purchase from both online and offline stores.
“You’re seeing people are still going to actual stores and malls to do their shopping, but you are also seeing the demands are higher when it comes to looking online for stuff versus actually shopping at a physical store. So they’ll actively compare from different channels online as to what physical stores may have,” Mr. Buono said.
The UPS study also showed for customers in Asia, 83% use an online platform to either search or purchase a product. While only 37% complete their shopping solely online — meaning they search for and purchase products through the online platform — only 17% choose to rely purely on an in-store experience for their purchases.
“With consumers shopping both online and in-store, it’s important for retailers to provide a seamless experience regardless of the channel,” it said.
In the long run, Mr. Buono said companies must pay attention to developing the overall online shopping experience for customers if they want to sustain growth.
Among the things customers pay attention to, according to Mr. Buono, are: “the ability to do stuff like filtering out products that people want, making the check out process easier for consumers itself, the returns process, and even just the pleasantness of the website itself.”
“Customers are only going to get more savvy with regards to the type of stuff they buy online versus what they buy in the stores… As you keep surpassing or exceeding a customer’s expectation, which is what we embark to do every single day, then that expectation is gonna stay there,” he added.
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