Consumers spending more in emerging markets
Consumers in emerging markets will drive spending in the global e-commerce market to more than USD1.2 trillion this year, as growth in mature regions such as the US and Western Europe begin to slow. New figures from eMarketer forecast China’s e-commerce sales will increase 65% and Indonesia’s will soar 71% this year, helping drive growth in the Asia-Pacific region up 23%. This comes in well above the global average of 17%. Overall the blurring of offline and online commerce as consumers become more comfortable spending on the internet will drive retail sales to nearly USD1.9 trillion by 2016.
Still “Significant” Room For Growth
The small proportion of internet users in many emerging markets that actually buy goods and services online means that there is still plenty of room for growth, says eMarketer, predicting that spend increases in these regions are set to continue. Also, the comparative low penetration of internet users generally among the populations of these regions means that there is even more room for growth. eMarketer forecasts penetration of shoppers among internet users in Asia-Pacific will hit 44.6% this year, climbing to 54.2% by 2017.
“Western Europe and North America are the only regions in the world where a majority of the online population are still not buying online,” says eMarketer. “The same markets with relatively low penetration of digital buying among internet users tend also to have lower internet penetration overall; as more of the population comes online, this will help feed the growing e-commerce market.”
Fuelling Investment
Investors are not overlooking the yawning e-commerce opportunity in emerging markets. In the last month alone, Lazada, a South East Asian e-commerce site from the Rocket Internet incubator, raised USD100m. Lazada operates across Indonesia, Malaysia, the Philippines, Thailand and Vietnam where the e-commerce opportunity is big, but the market is yet to mature. Meanwhile, online retailer Jumia, which focuses on emerging markets, raised USD35m. The online retailer sells a wide variety of goods that include from mobile phones, sunglasses, games consoles and cigarettes. The company, which launched last year, is based in Nigeria, but also active in Morocco and Egypt.
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