E-commerce in the Asia-Pacific (APAC) is booming - with 71 percent of APAC consumers making an online purchase, according to a new report co-authored by IDC and Experian. On the flip side, the risk of fraud is high too, and one in five customers have already fallen victim.
Based on a consumer survey across ten APAC markets namely Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, Singapore, Thailand and Vietnam, the “Digital Consumer Insights 2018” report delves into how well businesses mitigate fraud risk through the eyes of their customers.
The escalating possibility of online fraud is unsurprisingly perhaps, considering the sheer popularity of buying and selling products online and via mobile devices. Indeed, electronics, travel and groceries currently top the list in terms of popularity, according to the report.
“Asia Pacific is one of the most dynamic digital and mobile economies in the world. “71% are buying online, and 63% who have adopted mobile payments consider them convenient,” said Ben Elliott, CEO of Experian Asia Pacific.
“But as more people adopt faster and more effortless ways to shop, bank and engage with businesses, fraud exposure will increase. This is a concern with 18% of consumers in the region already experiencing fraud,” he said.
Consumers in mature economies like Hong Kong and Singapore are largely more aware of fraud risks and act in a more conservative manner, says Elliot. Consumers in these regions sometimes ditch an online transaction when they perceive a potential fraud risk, compared to emerging economies like Vietnam with less fraud awareness and where purchases could be more driven by convenience.
On the flip side, greater digital convenience is also linked to higher fraud exposure, which can be a problem to both consumers and businesses – the former through higher costs being passed down. The silver lining: consumers were more likely to want to adopt security measures as they become more aware of the risk of fraud, which helps businesses.
In the APAC, 13% of consumers are now willing to adopt biometrics, with India (21%), Vietnam and China (both at 18%) leading the charge as early adopters. Australia (9%), Japan and New Zealand (both at 8%) are the least willing to do so.
The report suggested that one of the best ways companies can protect their customers is by leveraging high-quality customer data to effectively verify transactions. This is easier said than done though, with a proportion of consumers either intentionally submitting inaccurate information to avoid disclosing data or making mistakes in the details they provide.
Ultimately, this boils down into an issue of trust, and an area where marketers can contribute. They can do that by doing more to communicate the value of collected data, as well as convincing customers that they can be trusted as custodians of personal data.