There are a number of factors, which are working together at the moment helping in the growth of E-commerce in the emerging markets. In the emerging markets of the world, the disposable income of the people is increasing and they are also getting high tech. With the rise in discretionary income and the impact of the internet and mobile technology, the platform is set for the growth of E-commerce.
It is expected that by 2020 nearly 80% of the adult population of the world will have a smartphone in hand. Now India and China, being the two most populated countries of the world and both promising to sustain growth between 7-10% in coming years, you can think of the impact they can have on E-commerce. India right now has 220 million mobile users and China 563 million and we all know how mobile and web technologies are changing the norms of conducting business.
People are getting addicted to buying online as it is comfortable; they can compare the quality, features and prices and over and above that they get the best deals on the internet. The brick and mortar showrooms are lagging behind in the race day by day. E-Commerce is well positioned to leapfrog ahead, beating the traditional models.
All research and data suggests that the future is online. According to Credit Suisse, “Online sales, or e-commerce, in emerging markets as a proportion of total retail sales is likely to exceed the same ratio in developed countries. This forecast was mainly due to a comparatively underdeveloped brick-and-mortar retail sector and the rapid increase of Internet usage on smartphones in emerging markets.”
E-commerce companies in emerging markets are bypassing traditional big box models that were both common and successful in the developed economies. They are providing the consumers new shopping experiences, which they love. They are listening attentively what a consumer wants and tuning their strategies accordingly. Today a person does not hesitate to order anything online because he knows if he does not like it or the size is wrong it can be returned without a hassle.
The companies are providing different payment options and one of them is bound to suit each and every consumer. The payments’ landscape in emerging markets, including India, is expected to further transform in the wake of accelerating growth in electronic payments.
According to Vivek Belgavi, FinTech Leader, PwC India, “Given the underlying infrastructural issues in emerging markets, there needs to be a focus on developing the infrastructure both for issuing and acceptance of payments products and instruments. Alternate payment instruments and modes like mobile wallets, virtual cards and accounts, social media and contactless payments are gaining traction for specific use cases, especially the unbanked customer base, driven by technology, customer needs and declining margin.”