Say you want to decorate your living room wall with new art. You might visit galleries to look for paintings you like. Once you settle on some pieces, you’d take them to get framed, a totally separate process. Then you’d hunt for finishing touches like the right hardware and lighting. Decorating one wall with art would involve a series of discrete transactions: at the gallery, framing shop and hardware store.
Fast forward to 2030.
Your personal AI shopping assistant scans the wall space and finds you a selection of paintings that suit your taste from a subscription-based art gallery. The assistant posts different possibilities for the wall on your social media accounts so your friends can vote for their favorites. Equipped with this knowledge, you make an informed decision about which paintings to go with, and the assistant handles ordering and logistics. The subscription-based service will also frame the paintings, install a picture hanging and lighting system, and then maintain it over time, refreshing the art periodically. Your need is fulfilled with less work for you and a lower upfront cost, and the outcome you desire—sprucing up your living room wall—is achieved.
This brave new world isn’t the stuff of science fiction: the technologies that make it possible already exist and are evolving quickly. These include the rapid adoption of AI, data modelling, multi-party systems in a digital supply chain (like blockchain) and 5G-enabled metaverses.
Many of these emerging trends are accelerating particularly quickly in the Asia market. The region is home to a unique, young and rapidly growing population of digital natives that has leapfrogged directly to the most advanced technology frontiers. This gives companies an edge in reimagining business with consumers who will adapt more easily to change. In fact, e-commerce sales in Asia are expected to nearly double between 2021 and 20251. Economic and societal demographic shifts are boosting incomes, which will lead to increased spending by households.
By 2030, “commerce” in the Asia market truly will be a different experience, one based on achieving desired consumer outcomes, rather than finalizing a series of separate transactions.
There will be increased interaction between businesses and their customers, often through AI intermediaries. While accelerating quickly in the Asia region, this development will appear in other tech-forward parts of the world as well.
Many of the trends described in Tech Vision 2022 support this transition to what we call contextual commerce. It will include everything from new ways of collaborating and interacting with products in the metaverse to deeper data insights into customer needs made possible by quantum, biology-inspired and high-performance computing. As people begin to “program their worlds” with AR and VR, they will virtually browse and try out products in 3D before buying.
Contextual commerce won’t simply create new ways of doing business: It’ll create new customer types, each requiring a different strategy and approach.
The new Cs
Within the next few years, we will each have our own “mirrored consumer,” a unique profile that aggregates our likes and dislikes and helps technology find, recommend and create products and services tailored to our individual needs and preferences. These comprehensive digital versions of customers will give sellers unparalleled insights into people’s wants and needs.
Whether it’s delivering household essentials to ageing populations, or providing small farmers with customized machinery, companies will be able to sell directly to consumers through their mirrored selves.
Curators will soon emerge as another new type of consumer. These will be technology agents working alone or with humans to find and buy goods for end-users to achieve desired outcomes. A curator recommends products and services catered to an individual’s personal preferences, habits, goals, or that are simply more convenient.
Curators will focus on fostering a trusted customer relationship and humanizing the product and services from each company. They will rely on advancements in AI not just for understanding customers’ desired outcomes in context, but also sourcing relevant products and services.
As technology evolves, bot curators will become more commonplace. Companies will sell to bots that select and purchase goods for consumers to meet their needs and desires. We call this trend B2Bot. People may have personal bots to support their purchasing decisions.2
Another emerging type of consumer is customer collectives, as group buying becomes a major category.
Additionally, more and more consumers will join collectives to use products and services in new ways. For instance, we’ll see a rise in subscription and as-a-service models, whereby consumers join clubs to access a product or service. We call this trend “B2Renter.”
The rise of B2Renter reflects consumers’ focus on outcomes, amid dwindling interest in traditional product ownership. In addition, decentralized autonomous organizations (DAOs)3 will allow member-controlled groups to make democratic purchasing decisions.
Several trends will accelerate the rise of contextual commerce in the Asia region.
Asia leads the way
It’s already surpassed physical stores to become the second-most popular shopping format in South East Asia.4
Over the next five years, we’ll see the rise of the middle class and increased disposable incomes across Asia markets.
By 2030, seniors in Asia are expected to spend over $5 trillion each year.5 And this generation of seniors will be more comfortable with technology. This increasing familiarity with technology coupled with the maturity of edge computing and IoT creates a large opportunity in this population. For example, these seniors are likely to completely delegate the purchase of daily consumables to their AI shopping assistants. Meanwhile, the young generation of savvy digital natives will be spending more in their preferred arenas, fueling growth in segments like gaming.
For example, there’s Udaan—a B2B trade platform designed specifically for small and medium-sized businesses in India. Large conglomerates such as JioMart are also introducing their own B2B platforms. These platforms will become a key channel for growing sales of products and services.
Already, Trakindo Indonesia rents mining and heavy industry equipment complete with contracts for maintenance, spare parts exchange, and component replacement services.6 As circularity becomes an important criterion for meeting environmental, social and governance (ESG) goals, companies will focus on extending the life of products.
Asia also leads in Metaverse, as millions of users—especially in China—embrace the technology in gaming and retail, among many other uses.
How companies should prepare for contextual commerce
We believe that contextual commerce will become a trillion-dollar market in Asia by 2030. This growth will be driven by rapid urbanization and technological advancements, and the projection that more than a billion people from across Asia will join the global middle class by 2030.
On the B2B front, manufacturing in Asia and China has undergone a renaissance. The evolution of 3D additive printing and redistributed manufacturing systems will enable organizations to produce small quantities of bespoke goods cost-effectively and provide direct-to-consumer services.
The maturing of the metaverse will create a social and immersive environment in which outcomes can be more easily visualized and experienced through multi-sensory olfactory and haptic experiences.
Trust and transparency will be fostered by new business models built on multi-party systems like blockchain that will be largely decentralized. At the same time, new payment models will evolve out of the proliferation of cryptocurrencies and central bank digital currencies (CBDCs). All these factors will accelerate the shift to a context-aware commerce in Asia.
To seize these opportunities, organizations must:
Organizations will need to formulate their strategies from scratch to address new customer segments and models such as B2Bot and B2Renter, and prepare for new avenues for sales, such as the Metaverse.
Companies must enable digital threads that will track how products are used throughout the lifecycle, and to be prepared for the consumer’s demand for hyper-personalization at scale.
Companies should identify the technologies they will need for the future of commerce, and start sourcing relevant skills, bringing their human capital closer to the new emerging consumer groups they will serve.
The key to success for these new models is how businesses build trust with customers. As we enter a world of AI-generated content that is realistic, the use of trustworthy technology will make or break businesses.
Companies need to develop their strategies around adapting their full stack for the convergence of 5G, Edge and cloud computing, AI with DLT, and XR.
The changes are happening, and every business must be ready. Are you prepared to shape the future of a world with a decentralized Metaverse, Web3, and experience-driven contextual commerce? Help define this world now, unless you want your competitors to define it for you.