Quantcast

E-Commerce is on the Rise in Emerging Markets


Shutterstock photo

It's certain that in developed markets, e-commerce has become second nature for consumers. This can be seen through the number of Prime subscribers Amazon AMZN has. As of June 2018, there were 95 million prime subscriptions in the United States, according to Statista . It's no surprise that e-commerce in countries like the United States and China has already saturated the online industry and created platforms like Amazon and Alibaba BABA . It's only a matter of time until developing markets will have a growing number of sales coming from e-commerce.

The Markets That Are In It to Win It

Although the idea of e-commerce is known worldwide, it sometimes may not be easily accessible or challenges may arise for businesses in developing countries. According to the World Trade Organization, more people in less-developed countries are being able to access the internet, day by day. Let's take a closer look at how e-commerce will affect these three developing countries in the upcoming years.

India

India is proving to be a front-runner in one of the fastest growing e-commerce markets in the world. Since 2015, the amount of internet users increased almost ten times from a decade prior. With accessibility to cheap mobile connections and internet access, users have been able to maximize the way they use the internet, which includes e-commerce as a big part.

Dominating the market in India is its largest e-commerce marketplace, FlipKart. Since its launch in October 2007, it has been the preferred online marketplace for Indian and many different International brands. The platform offers over 80 million products in more than 80 different categories. The e-commerce platform was acquired by retail giant Walmart WMT a couple of months ago. From this acquisition, we can expect Walmart to revolutionize commerce in India with lower prices and more international products.

 According to the India Brand Equity Foundation , the e-commerce market is expected to reach US$64 billion by 2020 from US$39 million in 2017. There has been an ongoing digital transformation in the country and due to that, India could surpass the United States to become the second largest e-commerce market in the world by 2034.

South East Asia

E-commerce is on the way to becoming a major industry in the SEA region as well. According to TechinAsia , there are over 330 million internet users in the South East Asia region, with the number only increasing. Most of SEA's demographics is made up of a younger population, hence it being a mobile-first economy. In countries like Singapore, Malaysia, Indonesia and the Philippines, mobile commerce has grown by almost 20% as the average Southeast Asian spends about 140 minutes online shopping every month.

E-commerce startups have been quite successful in the SEA region over the past few years. In 2017, different startups raised almost $8 billion. More specifically, Singapore based e-commerce startup, Carousell, raised $85 million in Series C funding earlier this year. It is apparent that smaller businesses have found their niche in the e-commerce market and have been doing well in that area with the support of government and educational institutions helping to kick-off the businesses.

According to ValueWalk , e-commerce is expected reach a valuation of $200 billion by 2025. It is clear that with a community that is successful with startup culture, we can expect success in the upcoming years in the e-commerce market in South East Asia.

Latin America

Although still a long way to catch up, Latin America is slowly but surely trying to enter the e-commerce market. Brazil and Mexico are definitely the two top largest countries in Latin America that have doubled in size in terms of e-commerce, with a lot of goods imported from the United States to be sold there. According to DigitalCommerce360, three quarters of Mexico's online population shopped online in 2017. More developed countries in Latin America such as Argentina and Colombia are the ones to look towards, especially for online retailers looking to enter the Latin American market.

However, some challenges have arose in the e-commerce industry in the Latin America. One main problem that Latin America faces is the difference in payment methods across the country. Since the region has a very large underbanked population, most consumers use cash payments. This means that it can be difficult to use e-commerce if the only way to pay is through cash. Although, the country is expected to reach $118 billion by 2021.  

Outlook

From the developing countries listed above (and many more), it is definitely certain that the e-commerce market is on the rise, everywhere. In the upcoming years, we can expect a variety of online retailers and business to arise.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.




This article appears in: Investing , Stocks
Referenced Symbols: AMZN , BABA , WMT



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?