By PHIL POMFORD
Special to the CHINA DAILY
ASIA NEWS NETWORK
5G could prove pivotal for Asia-Pacific economies. Leading data analysts predict that it will contribute US$900 billion to Asia's economy over the next 15 years, with 24 Asia-Pacific markets expected to launch 5G services by 2025.
Markets like South Korea and Japan are leading the way in 5G adoption: indeed, tech journalists from around the globe excitedly reported on the world's first nationwide 5G network which went live in South Korea earlier this year.
China is another market leading the charge toward 5G adoption, and is set to become the world's largest 5G market by 2025 with 460 million 5G users. On June 6, the Ministry of Industry and Information Technology issued commercial licenses for 5G. Four major telecom carriers - China Telecom, China Mobile, China Unicom and China Broadcasting Network - received the first batch of four 5G commercial licenses.
Businesses in the e-commerce space, and indeed any retailer today, should be paying close attention to the arrival of 5G. The high-speed connectivity of 5G will transform the way people shop, signalling the arrival of the next big retail evolution and presenting new challenges and opportunities for brands.
5G is set to power significant growth in mobile commerce, with some researchers estimating that it will produce an additional $12 billion in mobile commerce revenue for retailers in just three years, according to “A Mobile-First World”, a new report from Adobe Digital Insights.
That growth will be in part due to simple economics of speed – faster, cheaper internet on your mobile phone means more opportunities to shop. This is especially true for emerging digital customers in developing countries.
But there are other factors of innovation driving new revenue possibilities for retailers, too. 5G networks will enable a new level of access and ubiquity for groundbreaking retail technologies that leverage augmented reality (AR), virtual reality (VR) and the internet of things (IoT).
Imagine getting the best parts of the brick-and-mortar shopping experience without ever setting foot in a store. You're not simply scrolling through a website: you're actually looking at the shelves of a fashion retailer or supermarket via AR through your mobile phone, as well as exploring new offerings, hunting for discounts and deals, and even using a virtual fitting room to try on outfits – all from the comfort of your couch.
This futuristic consumer experience could be closer than we think, thanks to 5G and its unprecedented capability to handle huge amounts of data at high speeds. 5G will unlock a new wave of consumer preferences, and if e-commerce businesses want to win amongst Asia Pacific's fierce digital competition, they must harness the power of 5G. Then, they can truly transform the customer experience, through innovative technologies like AR and VR.
Of course, the possibilities of 5G are not limited to the digital retail space. 5G is also set to rapidly accelerate omnichannel commerce, bringing the digital and physical worlds together in a completely new way.
Brick-and-mortar stores can connect to shoppers via their mobile devices – you might walk into a shop and receive a personalised SMS communication with a special deal just for you, based on your browsing history. Or, through facial recognition tools, retailers could soon be able to track the in-store products you spend the longest time looking at, then send you a digital offer to encourage online purchase after you leave the shop.
As retailers consider how to innovate in the era of 5G, it will be paramount to provide the right payment experience, one that feels fast and frictionless, to match the overall 5G shopping journey.
For online merchants, this means investigating the possibilities of innovative new payment systems - think facial recognition authentication, social payments and invisible payments. But it also means simply taking the first step toward understanding consumers' preferred payment methods in any given market and catering to these.
Asia, for example, is home to eight of the world's top 10 markets for mobile payments, so offering Alipay, WeChat Pay or other popular options can be key to driving conversion, especially as the decreased network latency of the 5G era makes these seamless one-click payments even easier to use.
E-commerce in Asia is evolving at speed, and the arrival of 5G is set to turbocharge this innovative landscape. Retailers can prepare for the future today by doing a deep investigation into what opportunities 5G can unlock for their business - whether that's new VR and AR shopping experiences, tailored omnichannel offerings, or enabling the quick and seamless payment choices that might make all the difference.
Phil Pomford is general manager for Asia-Pacific, Global Enterprise e-commerce, Merchant Solutions at FIS.