In this time of the pandemic, e-commerce has the highest growth rate as shopping online has been the primary source of the consumers for their basic necessities.
It’s the ideal time for European companies, retailers, or traders looking to expand their business in Asian countries. However, they have to know the strengths and barriers they may encounter when they decide to enter its market. Certain differences in culture, market, and demands create a significant impact on business.
In this list are the differences between the European, Asian, and American markets and how they affect the world of e-commerce.
Differences between Europe and Asia
While the US and China are in a trade war, the two continents of Europe and Asia became the leading partners with over $1.5 trillion merchandise trade. Even if they have mutual connectivity, there are still differences between these two continents that companies need to consider when they decide to expand in each other’s borders.
Size of the market
Compared to the European market that’s only around 750 million consumers, Asia has over 4.5 billion. With these numbers, companies who wish to develop e-commerce have more chances in expanding a much larger scale of business in Asia.
There’s a large difference in the percentage of consumers who shop online as well. In the European market, only 60% make regular online purchases, while Asia has over 90%.
Asia is widely diverse, and while some products might not be patronised in some countries, they can move on easily to the next one. However, there are many laws to consider when distributing products in Asia countries. For example, beauty products and cosmetics are tested on animals in China, but that is not applicable in Europe.
While Asia is not a market for luxury goods, Asian consumers’ demand for home appliances, beauty products, and luxury items from Europe is very high. Because Europeans are culturally more modest in their lifestyle, European luxury brands mostly depend for their sales on Asian consumers. This has been proven when the pandemic took place and European luxury brands like Hermes primarily relied on the Asian market to keep their sales up.
Differences between Europe and The US
There’s quite a lot of difference between consumers in the US and Europe. Companies who wish to expand in either one of these places should strategically plan how they will approach the market.
In the US, there is an entire holiday dedicated to shopping: Black Friday. This over-consumerism is one of the major differences they have with Europeans.
It is also noticeable that advertisements in America are more aggressive. An example is how commercials pop-up every now and then during a soccer game while in Europe, commercials are only in the half-time show. This shows that Americans are more perceptive of advertisements as they tend to buy and consume more.
When approaching the European market, companies must focus more on local advertising since Europeans find it necessary to build a more personalized relationship with a person. For Americans, most of their purchases are made online.
Size of the market
One of the major differences between the US and Europe is the size of their markets. The US is the world’s leading market based on consumer goods. In 2017 alone, American household families have spent over $13.3 trillion in products and services which is the consumption of a quarter of the entire world. Europe only comes second to the US in terms of consumer markets.
Latest trend and future prospects
Consumers all over the world vary in how they pay for their transactions. In the present day, digital wallets and bank transfers are more widely used as problems with credit cards declining are still rampant.
Due to the pandemic, the percentage of people who use cash transactions fell drastically around the globe due to the preference of contactless payments. Even retail stores are giving discounts to customers if they choose to pay digitally. While cash payments continue to decline, e-commerce has reached its highest growth in five years as customers all over the world seek out alternative ways to shop. About 44% of e-commerce transactions were made from digital payments, and by the year 2024, it is projected to reach up to 51.7 percent.
It is also expected that by the year 2024, the use of cash in transactions will continue to deter away. Customers will continue to prefer safe and contactless payment methods such as digital payments.
While the future is uncertain because of the pandemic, it can be certain that e-commerce and digital payments will continue to thrive.