FRIDAY, March 29, 2024
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Consumers value transparency in online purchases, study finds

Consumers value transparency in online purchases, study finds

Consumers in the Asia-Pacific region seek visibility throughout the online-purchase cycle and incentives that add value to the shopping process, research shows.

Customised shipping options and fuss-free returns policies are also appreciated, but the study by UPS highlights that regional satisfaction with returns is low.

Now in its seventh year, the UPS Pulse of the Online Shopper study sheds light on consumer online shopping behaviour. It also, for the first time, features insights into the buying habits of business purchasers. Conducted in Australia, mainland China, Hong Kong and South Korea, as well as 11 other markets across the Americas, Europe and India, the study tracks evolving trends and demands from e-commerce customers.

The findings reveal three factors that impact consumers’ purchasing decisions – visibility across the purchase journey, incentives offered, and ways in which shoppers can customise their purchase and delivery experience.

“Consumers in Asia Pacific are increasingly knowledgeable about the options available to them when shopping online, and this is driving a demand for complete clarity and access to information throughout the purchase journey, as well as greater flexibility in both the shopping and shipping process,” said Sylvie Van den Kerkhof, vice president of marketing for UPS Asia Pacific.

“As consumers are presented with more options to buy online and competition increases, expectations are becoming more refined and retailers need to be agile enough to stay ahead of the trends. The ability to offer incentives not just in the form of a unique product offering but also in the shipping and delivery experience will be crucial to success in the evolving e-commerce landscape.”

Russell Reed, managing director of UPS for Thailand and Vietnam, said: “The value of the Thai e-commerce industry is expected to grow from US$3 billion in 2018 to US$13 billion by 2025. A large portion of this is driven by cross-border e-commerce and high demand for Thai products.

“The Asia Pacific edition of the study helps retailers in Thailand tap into this rapid growth by providing more in-depth analysis of customer purchasing behaviours across the region. The patterns and trends revealed by the study can then be leveraged to ensure that overseas customers are receiving the service they expect, in turn maximising customer loyalty and the potential for repeat business.”

A significant 90 per cent of all consumers globally research their product before proceeding with a purchase. While price is the most commonly researched information worldwide, by comparison it is less important for consumers in Asia Pacific (74 per cent), than for those in the Americas and Europe (both 81 per cent).

Reviewing a retailer’s returns policy is often part of the pre-purchase process, with 42 per cent of online shoppers in Asia Pacific doing this before making a transaction, reinforcing why it is important that retailers make this information clear and easy to find.

Furthermore, the findings identify that shoppers may cancel a purchase when they find out the retailer is based internationally, if they were unaware of this initially. Some 77 per cent of shoppers in China have done this, as well as 65 per cent in Australia, and 60 per cent in Hong Kong and South Korea. At the same time, 75 per cent of all shoppers in Asia Pacific have knowingly made purchases from international sellers, suggesting that online shopping is situational and, with international purchases likely taking longer to arrive, how long a customer is willing to wait may depend on what they are buying.

Continuing the trend from previous years’ studies, consumers still value free shipping, as highlighted by the fact that high delivery cost is the most common reason for an abandoned shopping cart. Asia Pacific shoppers will often take actions to reduce shipping costs, with 37 per cent indicating that they are willing to add items to their cart to qualify for free shipping, and 27 per cent saying they would purchase an alternative product priced above the retailer’s free-shipping threshold. These figures indicate that shoppers can actually be incentivised to spend more on the actual purchase, if this action will reduce the cost of shipping.

In addition to being a key part of the pre-purchase routine, a good returns policy can also encourage customer loyalty. And with just 5 per cent of Asia Pacific shoppers saying they are “very satisfied” with the returns process, there is huge potential for retailers with a good returns policy to rise above the competition. The common causes of dissatisfaction with the returns experience were a delay in receiving refunds (cited by an average of 32 per cent of respondents across the region), having to pay for their own returns (31 per cent) and delays in receiving a replacement product (25 per cent).

Furthermore, shoppers have been empowered to “vote with their clicks” when they have bad experiences with a merchant. In Asia Pacific, 93 per cent of consumers who receive poor customer service will either stop using that merchant or reduce how often they purchase from them. This is most apparent with South Korean shoppers; 70 per cent of whom will stop buying from a merchant altogether due to bad customer service.

The popularity of alternative delivery locations in Asia Pacific is a continuing trend, with the study finding that only 36 per cent of the region’s consumers prioritise receiving their package in-person at their home – compared to 62 per cent in Europe – while 19 per cent are happy to have the package left on their doorstep or porch.

Consumers in Asia Pacific are also more likely to know about and make use of specialised delivery services, such as UPS My Choice. The ability to select shipping options offers added convenience, with the research revealing that the ability to choose a delivery day has the greatest appeal.

As an alternative to purchasing directly from a retailer, marketplaces are also a popular purchasing platform, with 93 per cent of Asia Pacific shoppers having purchased from a marketplace in the three months prior to the survey. The region has notable market-level variations when it comes to the marketplace that businesses should take into account and cater to – 100 per cent of respondents in China had made a purchase from one of these platforms in the three months leading up to the survey, whereas 14 per cent in Australia and 10 per cent in Hong Kong don’t use marketplaces at all, the highest rates of non-usage in the world.

Expanding the study to cover B2B purchasing this year, the findings show that business buyers follow many of the same trends as consumers.

Similar to the consumer shopper, 96 per cent of Asia Pacific buyers consider the ability to track packages important, with the preferred method of tracking deliveries being a carrier’s website. 92 per cent of business purchasers would like to see all elements of their delivery managed by the supplier or shipper, and this is particularly so in Hong Kong, where respondents unanimously chose this option.

One area where the responses differed however was that while 42 per cent of B2C buyers will check the returns policy before making a purchase, this number jumps to 71 per cent when it comes to business purchasers, even when the buyer already has a contract with the supplier.

Furthermore, business purchasers in Asia Pacific are more likely than the global average to purchase products from non-domestic marketplaces, with 71 per cent purchasing internationally, the highest percentage of all regions surveyed. Of those that purchase internationally, 42 per cent stated that they did so because of higher product quality, while 41 per cent said it was because the product they wanted could only be bought from international suppliers.

One area of commonality among business purchasers globally is the importance of knowing the fully-landed cost, or the total price of a product once it arrives at their location. Asia Pacific confirms this trend with 94 per cent of buyers in the region indicating that this is important to them.

“For both consumers and business purchasers, the 2019 UPS Pulse of the Online Shopper reveals that here in Asia Pacific, we are navigating a world of choice and we expect to make purchases on our terms,” added Van den Kerkhof.

“In a crowded space like e-commerce, the kind of insight revealed by the Pulse of the Online Shopper study can make all the difference in helping businesses stay one step ahead – today, tomorrow, and next year.”

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