SINGAPORE — Advances in technology have ushered in unparalleled digital brand offerings in recent years, and new findings suggest the future of retail is being shaped by the quick digital adoption of consumers in the East.
In its eighth edition, VML’s anticipated “Future Shopper Report 2024” captures a global snapshot of the modern shopper. The report surveys 31,500 consumers across 20 countries – including China, India, Indonesia, Thailand, Australia and New Zealand. The report reveals a dynamic retail landscape challenging established trends and ushering in new opportunities for brands.
This year’s report highlights new trends taking shape: social media becomes the new hot marketplace; marketplaces’ grip on their dominant position in the customer journey is weakening; the face of consumer gets a virtual makeover; and the impact of new technologies like AI changing what we sell, how we sell it, and who we sell it to.
Beth Ann Kaminkow, Global Chief Commerce Officer of VML, said: “The new era of consumers is upon us. Demanding to be at the center of their own immersive omnichannel universe, brands and retailers are still playing catch-up on the new rules of commerce. Through this report, VML continuously seeks to better understand our future shopper — uncovering what drives them to discover, engage and ultimately, purchase — to help marketers redefine how they drive brands and businesses.”
“While the West sees a resurgence in physical retail, Asia Pacific reminds us that the future is still digitally driven,” added Aadit Bimbhet, Regional Commerce Director at VML APAC. “Global businesses can learn from the region’s mobile-first mindset, its embrace of social commerce, and its openness to AI-powered shopping. To win in APAC, and increasingly globally, brands must prioritize seamless digital experiences, hyper-personalized engagement, and lightning-fast fulfillment.”
Report highlights include:
As physical retail undergoes a resurgence in the West, consumers in Asia Pacific still log on to purchase online.
Globally, online spending saw a 5% decline from 58% in 2023, suggesting shifts towards more balanced shopper activity across online and offline environments and a growing demand for real life experiences. As we look to Asia Pacific, decline in Online Shopping was less dramatic – declining 1% from 2023 – where we see the East continue to prioritise online shopping with India and China leading the pack with over two-thirds of spending happening online.
Mobile shopping dominates, but brands and retailers have been slow to adapt and excel, leading to frustrating user experiences.
Mobile devices are the dominant force given their affordability and accessibility in Asia Pacific, now 62% APAC consumers say it’s their preferred device for shopping online. Despite consumer preference for mobile, near half of APAC consumers find shopping on mobile phones “difficult,” when diving into market level. India struggles with mobile shopping the most with two-thirds finding the process challenging. The region’s consumers are demanding more, with 70% of APAC consumers believing brands and retailers should work harder at making their mobile experiences better.
Marketplaces maintain dominance in product discovery but face increasing competition as consumers explore alternative purchase channels.
Marketplaces, such as Amazon, Shopee, Tmall and Lazada, remain the leading destinations for product discovery, accounting for 32% of consumer inspiration in the region. China’s adoption of marketplaces when it comes to inspiration leads the charts of APAC at 63% of consumers browsing for ideas. Although they are the number one destination, their grip on purchasing may be weakening, as the regions marketplace spending dropped from 37% in 2023 to 28% in 2024.
Consumers are increasingly willing to explore alternative channels for purchasing. Especially as we see increasing D2C investment in super apps like WeChat and Line. Marketplaces, however, are demonstrating their own capacity to innovate and grow; over half of APAC consumers say that they are open to using a dating app provided by the likes of Amazon, Tmall and Lazada.
Consumers crave speed and convenience in all aspects of their shopping journeys. Delivery speed expectations reach new heights as consumers demand near-instant gratification.
Customer expectations are high, with 29% APAC consumers expect delivery of online orders within two hours. Research in the region indicates that Pharmaceuticals and Groceries were the categories where quickness was the priority factor with nearly half of consumers expecting delivery to be made in under two hours.
But speed isn’t only about delivery. 70% of APAC consumers report that they want inspiration through search to purchase as quickly as possible, with Indonesia leading the pack in demands at 80%.
AI’s potential to improve efficiency and free time is an alluring prospect.
Asia is optimistic about the future of AI with 68% feeling the positives of AI outweigh the negatives. Yet ANZ region is more hesitant than its Asian counterparts.
The optimism of AI’s potential is focused on efficiency and freeing up time. Nearly half of consumers are open to letting AI shop for them and organize their life.
Consumers are more likely to embrace AI when they understand its benefits and have control over its use. Brands need to prioritize transparency, explain AI’s role clearly, and offer consumers choices in how they interact with AI-powered systems.
Social commerce continues to gain global traction, but the East continues to dominate the sector.
The appetite of social commerce in Asia Pacific continues to be the gold standard for the world with 81% of consumers in the region having purchased via social media before.
TikTok Shops (or Douyin in China) dominates the social commerce landscape in China, Thailand and Indonesia with one in two consumers stating they are most likely to purchase from the platform. Looking at India where TikTok is banned, Instagram has become the prevalent platform where more than a third of consumers most likely to transact.
When it comes to Live Stream Shopping, Asia consumers take the new experience in stride with 82% of shoppers indicate they have made a Live Stream purchase. Australia and New Zealand lag behind their Asia counterparts at just under one third of consumers having purchased via social live shopping events.
“The East skipped the desktop, leaping straight to mobile-first commerce, and Western businesses need to catch up,” said Nick Pan, Chief Commerce Officer at VML APAC. “For consumers in the East, social platforms are the internet, making social commerce seamless and frictionless. The reach of social commerce alongside the immediacy of purchase are just two of the reasons why it should be right at the top of the agenda for consumer brands – especially for global brands wanting to expand to Asia.
The very definition of “consumer” is evolving, as digital avatars gain importance, and emerging technology and channels allow for interactions beyond the physical realm.
The blurring of the lines between the physical and digital consumer is evidenced by the rise of gaming commerce, with a staggering 91% of APAC consumers identifying as “gamers” and 70% of those spending money in-game. More than half of APAC gamers believe that looking good in-game is as important as looking good in real life.
Blended realities extend to the afterlife, with over half of APAC consumers expressing interest in “post-death consumerism,” with Thailand leading the pack with three quarters wanting to participate in it. Moreover, 54% of consumers in the region are interested in using AI to bring deceased loved ones “back to life” through virtual conversations.
The “Future Shopper 2024 report” is the industry’s most comprehensive survey of global shoppers, reaching consumer respondents in 20 countries including Argentina, Australia, Brazil, China, Colombia, France, Germany, India, Indonesia, Italy, Mexico, Netherlands, New Zealand, Peru, Saudi Arabia, South Africa, Thailand, UAE, UK, and US.
Download and view the full report here.
