PAYMENTS solution provider UnaCash expects Generation Z, or the so-called Zoomers, which comprises 32 percent of the population, to become the driving force behind the evolving e-commerce landscape in Southeast Asia (SEA).
Currently, Gen Zs — those born between 1996 and 2010 — represent 32 percent of the total population of SEA (221 million people), with 57 million more young adults expected to participate in the regional economy in the next five years.
According to UnaCash, “shopping accounts for the single biggest share of Gen Z’s spending.”
In the Philippines, shopping accounts for almost a quarter or 24 percent of Gen Zs’ total spending ahead of entertainment, events and dining out — making it critical for retailers who are looking to capitalize on this increasingly important market segment.
Shopping in Vietnam, on the other hand, accounts for 20 percent of Gen Zs’ total spending.
“Already, Gen Zs are not only fundamentally changing and restructuring the sector for themselves, but also setting trends. The further maturation of the Zoomer segment and an increase in their share in the target audience of e-commerce will lead to the spread of values and ideals to brands,” UnaCash said.
Separate reports from Statista indicate the average growth rate of the share of e-commerce sales in the trade volume of the region will be 132 percent while the size of the SEA e-commerce market will be US$186 billion in 2025.
To adapt to the unique needs of the digital native generation, UnaCash said retailers must invest in accessible digital platforms, leverage data to understand the evolving customer needs and embrace flexible payment solutions.
Recognizing that Zoomers are leading the digital revolution because of their heavy reliance on smartphones and social media platforms, retailers will need to ramp up their resources in the digital space as digital channels produce more data that can help them properly address the evolving needs of the Gen Zs in this new landscape.
Retailers are also encouraged to accelerate the shopping momentum as 66 percent of Zoomers shop online, particularly through mobile devices, seen as the preferred shopping companion.
Moreover, integrating financial service providers such as e-wallets and buy now, pay later payment options in their e-commerce platforms enhances the retailer’s value proposition ahead of its competitors in the local market.
UnaCash also noted continued investments in onmichannel shopping as both physical and digital platforms are pivotal to businesses, driving consumer traffic through brick-and-mortar and digital touchpoints.
The Bangko Sentral ng Pilipinas (BSP) earlier said it is bullish that the sustained rise of digital payment technologies will continue to facilitate the efficient delivery of financial services to the unbanked and micro, small and medium enterprises.
BSP Deputy Gov. Mamerto Tangonan credits the significant strides in digital payments to the implementation of the BSP’s 2020-2023 Digital Payments Transformation Roadmap with the support of its public and private sector partners.
“In 2013, we started with a mere one percent share of digital to total retail payments. Fast forward to 2022, and we saw a whopping 42.1 percent share in digital retail payments transactions,” said Tangonan.
“I believe we reached our 50 percent target by the end of 2023,” he said.
Based on the BSP’s Digital Payments Transformation Roadmap and its National Strategy for Financial Inclusion, by end-2023, half of all payment transactions should be in digital form while 70 percent of adult Filipinos should have formal accounts.