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eCommerce in the emerging markets

While eCommerce trends in the US continue to be our main focus, we are also tracking on trends in emerging markets. eCommerce is expectedly on the rise in emerging economies especially in the BRIC countries and in many parts of Africa. These emerging markets have been the focus for retailers and eCommerce companies across the world. The amount of venture capital investments is a testimonial to the growth expectations in the emerging markets.

Here we take a special look at India as we see this as the hottest among the BRIC economies with lot of activities happening both on the investment and the regulatory spheres. Another reason for the special spotlight is the emergence of mobile as a major channel. Many eCommerce vendors report double digit figures for mobile traffic.

eCommerce in India is set to attain a massive 700% growth according to estimates by several industry analysts. It is estimated to reach USD 90 billion by 2021. Companies like Flipkart, Snapdeal and Amazon are growing at breakneck speed and are pumping in significant investments anticipating huge volumes of sales in the coming years. There has also been quite a bit of consolidation in this space in the recent past.

Our tracking of the India market has pointed out an interesting thing – unlike other countries where the eCommerce evolution commenced from the desktop channel and then flowed on to the mobile, India however, appears to have skipped the desktop part and moved straight on to the mobile.

Another unique phenomenon in the Indian market is the rise of “Cash on Delivery” (CoD) where the customer pays only after receiving the ordered goods. We’re keeping an eye on this phenomenon to check whether it’ll prove to be a profitable fulfilment technique for the eCommerce service providers in the long run.

We’re very interested in the results of the rise in eCommerce in India particularly in the areas of online ads, new business models by the eCommerce vendors, logistics and operations. Apart from these we’ll be keeping an eye out for areas where Western practices have been emulated or adapted to suite the local market requirements.

On the whole the eCommerce scene in the emerging markets is at an inflexion point and the possibilities are very interesting and mind boggling. What remains to be seen is whether this growth is sustainable and if just volumes would be sufficient to keep the business running.

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