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Asian Spending Power: Tapping Behemoth Eastern Markets

By Matthew Dove

Since it’s first issuance in 1961, JCB Card has risen to a near unparalleled position of authority in the Asian payments market. This ascent has coincided with a growth in Asian spending power unseen in human history. Fortunately for us, JCB kindly provided TFT with A Guide To How European Retailers Can Tap Into Asian Spending Power.

The stats are formidable. Asia-Pacific JCB cardmembers will exercise an estimated spending might of 32.6 trillion US dollars (USD) by 2026. And that cash is increasingly mobile, with the first eight months of 2018 seeing outbound trips from the region rising by an impressive 8%.

There are also the 330 million internet users in Southeast Asia to think about. According to Google, they’re spending an average of 140 minutes shopping online each month. Coupled with the fact that they spend twice as long in ecommerce marketplaces as Americans do and this is a demographic as appealing in the fine print as it is in the abstract.

In Europe, and the West more generally, the scope of the Asian market can be intimidating and many retailers and payment providers are struggling to exploit fully the opportunities at hand. As the report states;

“It is apparent that whilst foreign purchases are increasing, retailers are unsure of how to utilise this new revenue stream.”

So, what’s holding them back?

Understanding the rich diversity of the Asian consumer and their specific needs comes high on the list.

Citing a common and basic difficulty encountered by nearly all foreign travellers looking to make purchases a long way from home, Mark Harvey, JCB general manager UK and Ireland had this to say;

“Language barriers are the obvious challenge retailers face when serving Asian customers. However, visualisation of the JCB logo tackles these issues, as the cardmember is confident of entering the store and making a purchase without the need for dialogue.”

jcbRegional differences need to be factored in too. For example, “the average age of the JCB Chinese cardmember leans towards the 35-to-44-year-old bracket.” Almost half (44%) of those using their card abroad do so to make high-value purchases, reflecting the rise of a young, wealthy and ever-expanding Chinese middle class.

The report brings similar focus to the analysis of JCB’s Japanese customers. The average spend in the UK for a Japanese JCB cardmember is 1,011 GBP and the volume and value of transactions is growing across the continent. In Austria in 2018, spending was up amongst this group by 8% and transaction values rose by over a third. Germany saw a more modest bump of 3% on spending and 27% on transaction value. Spain was arguably last year’s biggest winner with year-on-year spending up by 28% whilst transaction value shot up by 60%.

jcbJCB are also keen to highlight more niche areas of the market. Back in the UK, “one luxury retail store took more than 10% of Chinese visitor spend while Thais made 18% of their purchases at one specific luxury retail department store.”

Across the Channel in France, the same trend was in evidence as “one specific merchant took 42% of Chinese transactional spend in 2018, 31.5% of South Korean spend and 26% of Thai spend.”

The average Euros spent by all five nationalities included in the report (Chinese, Thai, Japanese, Taiwanese and South Korean) hums of the well-heeled international consumer:

  • UK – 125.26
  • Germany – 173.60
  • France – 275.80
  • Austria – 188.60
  • Spain – 159.40
  • Italy – 271.40

When it comes to capitalising on all these enticing facts and figures, JCB are uniquely placed to offer words of wisdom. In a ten-point breakdown given to its country managers and senior leadership, JCB maps the terrain;

Know your customer

Retailers and processors need to be aware of whether their target customer is a business or leisure traveller, or an online prospect. Regional differences in these metrics cannot be overlooked.

in the UK, “one luxury retail store took more than 10% of Chinese visitor spend while Thais made 18% of their purchases at one specific luxury retail department store.”

Partner well

Simple, clean omnichannel integration of cross-border payments is the key to winning and retaining a global market share. Factor in the need to employ the services of companies that Asian consumers already trust.

Keep up

This market is changing at a breakneck pace so keep your ear to the ground and your wits about you. Progress waits for no one.

Remain visible

“Data shows that the best way to increase recognition of the reach and acceptance of a credit card is clear signage at the merchant’s own premises.”

Understand tiered membership

“In France in 2018 nearly half of the total value of transactions from Japanese purchasers came from JCB Gold cardmembers and …. the total value of transactions by Thais came from Platinum cardmembers.” Enough said!

Discounts and privileges can make all the difference

Understanding the packages offered by individual card providers can be just as important as understanding the people using them.

Mobile payment is King

By 2025, GSMA Intelligence estimates that there will be close to half a billion new smartphone users in Asia-Pacific, meaning three-quarters of the region’s population will expect to access mobile payments abroad. Be prepared or lament at your leisure!

This market is changing at a breakneck pace so keep your ear to the ground and your wits about you. Progress waits for no one.

Check support availability

If the card company you facilitate has a concierge or help centre locally, make sure you know where it is. More importantly, make sure your visiting customers know where it is.

Buy an Asian holiday calendar

Asian holidays vary by country and generally won’t fall on set dates. As spending spikes during these periods, flexibility is paramount or opportunities will be missed.

Investigate the barriers to ecommerce as well as the benefits

Ecommerce may seem a win-win prospect but bear in mind the logistical, forex and linguistic implications of international fulfilment, especially considering the complex geopolitical nature of the region.

There isn’t a unified one-size-fits-all approach to tapping the behemoth markets of the East. Asia comprises a full 30% of the world’s land area with 60% of the world’s current population. It also has the highest growth rate today, and its population almost quadrupled during the 20th century.

JCB’s report covers just 5 nations.

The scope of the proposition is staggering and so are the possibilities. As ever, the correct path lies neither in fixity nor change, but in a dialogue between the two.

Roberto Morales, general manager Spain (JCB Europe), advises that you to “educate your teams about the Asian social media platforms such as WeChat and Weibo and experiment with geo-location targeting of Asian shoppers in your area.”

You should also be aware that everything you think you know about the market can change with little notice.

“It will be fascinating to see the changes in purchase behaviour over the next few years as customers’ experiences change in the light of new payment technology and expanding ecommerce opportunities.”

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