From one Billion to Six Billion Shoppers – The Future of E-Commerce
According to Caesar Sengupta at Google, between 2015 and 2020, more than 1.5 billion people began using the internet for the first time.
Another billion more are set to join them online by 2025.
Most of these new internet users come from Asia, Latin America and Africa. They experience the internet differently from those who came before them—connecting on their phones and adopting new apps and tools incredibly quickly.
”More and more, it’s their needs and ideas that are shaping the future of technology, in areas from financial inclusion to language translation.”
The story of the first twenty years of e-commerce is about the transition from classic retail to serving one billion shoppers in the developed world.
Retail represents the biggest segment of consumer commerce. Once the market for physical products is transformed into e-commerce, other markets, such as online media and digital products, tend to follow.
The retails gradual evolution in the US and Europe made for a relatively smooth transition from traditional commerce to e-commerce.
But understanding what is the true role of e-commerce in emerging markets is the challenge of the future.
In 2000, when Jack Ma started AliBaba, skeptics told him that e-commerce would never work in China. The reasons were many: inefficient payment infrastructure, inexistent credit cards, poor logistics infrastructure, lack of engineering and management talent, and most and foremost: Chinese shoppers would never trust online merchands enough to buy products online.
Fast forward to 2020, China had become the largest e-commerce market in the world.
In a single day, AliBaba handles more transactions than the total combined online sales of Black Friday and Cyber Monday in the US. (Porter Erisman, Six Billion Shoppers)
The next e-commerce markets ready to explode are South-East Asia, Latin America, and the e-commerce s final frontier, Africa, where the rise of e-commerce is being driven by three major trends: widespread internet adoption, a rising middle class, and, innovative new business models that serve the needs of local customers better than the models used by western e-commerce giants.
According to Erisman, ”the smartphone has done more than putting a shopping mall in every consumer¢s pocket: it has also put a retail storefront in every entrepreneur¢s pocket, creating opportunities that otherwise would not have existed, rather than killing old retail incumbents, as it did in the US and Europe.”
Asking the right questions is, time and again, relevant, especially with e-commerce.
The market potential and the numbers are only the ”what” of the new emerging markets.
Asking ”why” the market is how it is and looking at the consumers – how they shop and why they shop the way they do – seems to be one way to be successful in the e-commerce of the future.