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Asia is driving the huge growth of internet sales, with young people in particular at the forefront of this trend.
But why are you excited about this activity and what are you spending your money on?
At the Admiralty Elementary School, in the Woodlands neighborhood of Singapore, a group of students has just joined the world of e-commerce.
“Now I do not need to worry about losing my wallet,” says Bosco Wong, a 10-year-old student who wears a new wristwatch to make purchases while at school.
The device, called Smart Buddy , is sponsored by the Bank of Singapore (POSB) and everyone in the school has just received one.
This is part of a campaign in Singapore to create a cashless society and the Minister of Education, Ong Ye Kung, was at the school to present it.
Parents can track and control their children’s online purchases.
Asia, and its young generations in particular, use online shopping and digital payments with extraordinary enthusiasm.
And since the UN estimates that there are 720 million people between 15 and 24 years old living in that region , a huge number compared to the 47 million living in North America and the 82 million in Europe, it is not surprising that Asia is at the forefront of the explosion of electronic commerce.
China, which in 2015 overtook the United States as the country with the highest spending on Internet purchases, now accounts for 40% of global e-commerce.
The technological phenomenon
The retail giant Alibaba, founded by billionaire Jack Ma, recently reported a 61% increase in quarterly profits (US $ 8.3 billion) mainly due to the popularity of its online sales platforms, Tmall and Taobao.
The monthly active users of their retail markets in China increased to 549 million in September, 20 million more than three months earlier, which is an impressive rate of growth.
By 2020, 60% of young people between the ages of 18 and 29 will live in Asia and will have available income of US $ 6,000 million, says the Accenture consultancy.
It’s a much higher number than any previous generation.
But why are young Asians so enthusiastic about shopping online and spending their money?
It is clear that this has been a phenomenon driven by technology, with smartphones as the main innovation that has changed the behavior of consumers.
Nearly two-thirds of the population of young people in Asia have purchased something on the Internet with their phone, says Accenture.
“I buy a lot of books on the internet,” says Theophi Kwek, 22, who recently finished her university studies in Oxford, England, and is now doing national service in the Singapore Army.
Foreign books are cheaper than in Singapore, he says. He often uses British sites and says the delivery “usually takes a couple of weeks at most.”
Innovation on the internet
But Yi Ying Ng, 27, founder of AllSome, a packet tracking service, is part of an upward trend to connect other Asian markets with China’s engine.
The volume of packages from China to Malaysia went from about one million per year in 2012 to about 73 million today, says Ng.
She collects products from the southern Chinese city of Shenzhen and delivers them to online buyers in Singapore and Malaysia, where she is from.
It plans to expand next year to Indonesia and then to Thailand.
When you started your business five years ago, sending a package from China cost between US $ 15 to US $ 25 and took between 30 and 50 days. She found ways to reduce this to US $ 5 and shorten the delivery time to three days, she says.
But, he explains, his real innovation is helping small merchants sell through Facebook, Instagram and Snapchat.
“We are trying to help everyone become a merchant, with a decentralized approach,” he says.
The research of TMI Strategy suggests that worldwide, 62% of e-commerce users under 30 make their purchases taking into account the recommendations of other influential users on the Internet, whether friends on social networks or specialized bloggers .
Ng calls this modality “social commerce” . The majority of its merchants are between 24 and 28 years old, and their clients are just over twenty years old.
But while China sells more and more online to the rest of Asia, young people in the growing urban middle class are buying goods and services from more distant places.
Qiaoyun Zhang and Xiaochen Xu are parents of about thirty years and live in the prosperous business district and embassies of Beijing called Chaoyang.
They recently started using a platform called VIPKid to buy English classes from teachers in North America, for their four-year-old daughter, Lu-Ke.
“My husband and I rarely use English in our daily lives,” Zhang says, “and maybe our English is not so good, so we do not want to teach our children to speak it.”
Classes last for 25 minutes and your daughter takes four of them per week on an iPad.
“American teachers are very patient compared to Chinese teachers,” says Zhang.
Companies wishing to sell to the younger Asian audiences, as the case of Zhang, should realize that loyalty to the s brand s no longer exists , says Michael Talbot, cofounder of 3radical, a firm commitment to brand that works in East Asia.
Your company provided the technology to Smart Buddy of Singapore.
“These young people are not disloyal, they are only using tools in a very competitive landscape, it is fundamentally different from having a street with a Chinese restaurant, an Indian restaurant and a couple of bars,” he says.
Loyalty schemes tend not to work in China, Vietnam and Thailand, but games linked to a brand and incorporating an element of luck have cultural appeal there , says Talbot.
So, how will the children like Bosco Wong buy 10 years in the future? Will they use their voice to authenticate a purchase perhaps? Will they touch the side of their augmented reality glasses?
Whatever the technological innovations, these Asian children are likely to be at the forefront as e-commerce continues to sweep the world.