What is x-commerce and why should marketers care?

Mobile and the rise of on-demand services is fuelling a new form of commerce the IDC is calling xcommerce. 

Recently, we reported on the International Data Corporation’s (IDC) prediction that xcommerce in the Asia-Pacific region (excluding Japan) will rise from around US$7 trillion in 2015 to nearly US$17 trillion in 2019.

What is xcommerce? It’s a good question. A quick Google search doesn’t bring up a lot.

xcommerce_google search_400

The IDC is defining xcommerce as the increasingly innovative and complex business models of changing consumer-purchasing behavior over and above traditional ecommerce models.

It covers on-demand services (ODS), sharing economy services, online to offline (O2O), social commerce, content commerce, new payment and logistics systems, and customer experience.

“You need all the pieces to align – capable smartphones, payment, the apps and services and the offline integrations. Until all of them come together you don’t have the boom in the market,” says Shiv Putcha, associate director, AP telecom practice, IDC Asia-Pacific.

Xcommerce v omnichannel v O2O

The xcommerce term is designed to capture all mediums of engagement: ecommerce, mobile commerce, online to offline (O2O), local deliveries, on-demand services like Uber, and sharing services like Airbnb.

Asia leads the way

China is at the epicenter of this xcommerce revolution, with the Indian and Indonesian markets not far behind. It’s being fueled by Asia’s rising rates of smartphone adoption, mobile broadband availability and secure, user-friendly mobile payments.

It started with Alibaba’s Taobao and Tmall marketplaces redefining O2O, in a similar way (but very different business model) to Amazon.


Tencent’s WeChat is considered the industry model when it comes to integrating all facets of the consumer purchase journey.

It began as a simple messaging app only a few years ago, and has since developed into an all-in-one mobile, social, ecommerce ecosystem.


The app has 650 million monthly active users – a figure that grows in the tens of millions every month.

When users link their account to the app’s embedded WeChat Wallet with a bank account they are then able to do everything from paying utilities bills, to booking hospital appointments, ordering a pizza, buying movie tickets to hailing a taxi.

WeChat wallet also allows money transfers between friends, to a vendor or for payment in-store using a barcode. (WeChat also has an embedded QR reader, but that’s another story, which you can learn more about here.)

The more who get on it, the bigger it get, says Putcha.

Critical mass is at the core of it for these platforms and WeChat has achieved that. In markets like India and Southeast Asia, startups are still vying for market leader status, often by diversifying from their core origins.

Scootsy, a Mumbai-based start-up for example, has moved from a food and restaurant delivery service to a discovery and on-demand seller of everything from food, gifts, cakes, clothes, books, sporting gear and toys – including a partnership with British toy store Hamleys.

xCommerce_Scootsy App_India_400

Challenges to xcommerce

The challenges for markets like India and Indonesia include:

  • A lack of strong 3G and 4G connections in regions outside of the main cities
  • The limited sophistication of cheap smartphones
  • Latency and page load. (A mobile page in a market like Singapore or China will load in about 1 second. In emerging markets that could take eight seconds.)
  • Secure payments. Many users in Asia do not have credit cards. Trust issues also limit linking to debit cards. Mobile wallets, like WeChat Wallet – which act as an interface between the vendor and the consumer to ensure an additional level of security – are growing in popularity.

While more than 50% of ecommerce traffic in emerging Asia happens on a mobile, transactions on this medium are significantly less.

Flipkart is one of India’s biggest e-commerce platforms, for example. Over time it has experimented with a mobile site to a mobile only app to mixed responses.


Closing the loop

Previously, search, discovery, payment and fulfillment were set discreet activities, says Putcha. Today, the consumer buys a smartphone and geolocation capabilities allow them to click on a buy button and have the product delivered to their door.

Why should marketers care?

“There are still too many new channels out there – some will ultimately get the scale of WeChat for them to enhance their advertising capabilities. The ones that survive will eventually get you the eyeballs and then you can advertise, or offer promotions,” says Putcha.

Importantly, it’s not all about using these platforms for advertising, but for marketing.

“The whole search and discover mechanism is changing and consumers are not relying as much on offline. The proportion of online advertising is growing, the proportion of mobile advertising is growing, and markets need to re-orient to these new mediums,” he says.

While there may not be a purchase online, brands need to recognize the value in these platforms for brand awareness, and how these apps can directly influence sales.

Consumers are using these platforms for discovery as well as fulfillment, doing research and price-point comparisons before purchase.

For this reason, brands need to be on as many of these sites to reach more consumers, says Putcha.

Xcommerce is also playing a significant role in after care service. A consumer could visit a hotel, have a great stay, but then want to contest the bill after they have returned home.

“You don’t even need to call them anymore – you just send a message to them through WeChat, and they “talk” back to you almost instantly through instant messages within the app,” says Putcha.

Key trends

“The emerging markets of Asia are seeing rapid innovation, new business models and entire new categories opening up,” says Putcha.

Here are several key trends the IDC highlights as drivers for sustained growth in xcommerce across the region:

  • The rise of social media as a discovery platform. Social commerce has emerged as a valuable marketing platform for xCommerce, with both traditional ecommerce and emerging mcommerce.
  • The rise of on-demand delivery models, with most of these transactions initiated over a mobile device.
  • The rise of the sharing economy. These services in Asia Pacific are set to grow, with consumers beginning to share rooms, hobbies, and car services, among others. Such services will foster and drive new innovative methods of payment for services, especially those of lower transaction values.
  • The rising importance of customer experience (CX). Organizations are wrestling with the rapidly changing nature of interaction with their customers versus existing technology such as an omnichannel contact center and CRM applications.


Speaking to ecommerce experts in China and Southeast Asia, it seems this term is yet to take off in the industry.

“This is already happening in Asia, and Southeast Asia specifically, and what people call it – xcommerce or ecommerce – doesn’t really matter,” says Sheji Ho, group chief marketing officer, aCommerce.

Ho doesn’t believe that grouping everything under the one term helps the industry either.

“Mobile commerce, O2O, and on-demand services are inherently different platforms and services each with their own unique use cases for different industries,” he says. For example ODS may be more suitable for online grocery deliveries whereas O2O is better for services like restaurants, spas, or entertainment.

Whichever way this phenomenon is being labeled however, Asia is undoubtedly at the center of new innovations around social, mobile and ecommerce. For marketers, the ways consumers in Asia are embracing these new technology models cannot be ignored.

For the platforms themselves, it’s an open opportunity in almost all Asian countries outside China, Japan and Korea, says Putcha. “It’s all up for grabs.”

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