Here are the next top markets for global e-commerce

COVID-19 has resulted in a surge in e-commerce spending worldwide. But the effects of the pandemic are just a small part of a much bigger picture. Although e-commerce use has expanded substantially in the last year, across many global markets the pandemic has only accelerated fundamental changes that were already gaining traction even before a record number of new businesses began selling online.

PayU provides global payment solutions tailored toward the world’s most dynamic emerging markets – where growing levels of internet and mobile penetration, efforts to broaden financial inclusion, and improvements in consumer trust and security when it comes to online payments have all contributed to the creation of a vibrant e-commerce ecosystem which has been a bright spot amidst the economic uncertainty of the past year. Even before the pandemic, governments in a number of countries were making significant attempts to foster increased digitalization of the economy and society, with e-commerce as a fundamental pillar. Amidst the ongoing uncertainty of COVID-19, these efforts are continuing to pay off.

Never has the global e-commerce landscape been more exciting. Multiple factors are bringing more global businesses and consumers to the table, creating a “tipping point” for e-commerce adoption in many new markets – and exciting opportunities for online and multi-channel retailers.

As these global trends accelerate, PayU has released a new analysis showcasing online consumer spending growth across 19 emerging economies that have traditionally been eclipsed by more mature e-commerce markets – but should no longer be ignored.

Combining external sources with primary data directly from PayU’s online payments platform, our report is targeted toward fast-growing online and omni-channel merchants interested in realizing the considerable potential of the e-commerce landscape in emerging markets.

Here is a teaser of some of the key insights from our report:

• COVID-19 may have been the impetus for e-commerce growth in Poland in 2020, but it is far from the only one. Due to the growing popularity of smartphones and increased internet penetration, consumers’ digital literacy has been improving for several years, resulting in an increase in e-commerce expenditure. 59 percent (12 million) of Poland’s 20.3 million internet users purchase online using their mobile phones.

• In India, the number of smartphone users is expected to approach half a billion by 2020, prompting more people to use their phones for a range of purposes, including financial, retail, and educational. More secure and dependable infrastructure, as well as the proliferation of mobile commerce and cheap internet access, are driving a shift away from traditional payment methods toward new choices like online banking and subscription payments.

• In PayU’s report, we estimate that there will be 424 million mobile internet users in Latin America by 2025, a figure that will undoubtedly rise as mobile commerce becomes even more prevalent. As a payment provider, our task is to assist in reaching those new users, supporting both merchants and consumers by expanding access to financial services, and building trust in the security of digital payments.

• Turkey’s average person spends 7.5 hours per day online, with more than 92 percent of the country’s 83 million people owning a smartphone. Consumers have prioritized speed and convenience as a result of this widespread adoption, driving expectations higher when it comes to purchasing and online customer experience.

• In South Africa, PayU continues to observe an incredible shift to mobile payments, with up to 85% of transactions performed on a mobile device in 2020, compared to 50% in 2019. This tremendous rise in mobile payment usage in South Africa corresponds to the country’s massive surge in smartphone adoption.

• The regulatory environment in Europe continues to shift in favor of e-commerce. Strong Customer Authentication, implemented in December 2020, will help further reduce fraudulent activity, while the online payment card security protocol 3DS 2.0 will increase payment security and continue to foster better user experience for online buyers.

• In 2018, Colombia established a goal of achieving 85 percent financial inclusion by 2022 – which it achieved two years early, reaching 85.9% in 2020. 1.6 million adults in Colombia got a financial product for the first time during the initial months of the first COVID-19 quarantines, while 2.3 million reactivated one they previously had. Colombia continues to be a forerunner in Latin America in terms of financial inclusion, supporting more customers to engage in the digital economy.

• Brazil’s Open Banking strategy will bring financial system interoperability to the country, which will help drive down obstacles to financial inclusion as well as lowering the cost of financial services for consumers. The Central Bank has also launched Pix, a QR-code-based fast payment system that is predicted to grow in popularity to the point where it could account for 25% of all online payments within the next three years.

• Despite having a population half that of Brazil, Mexico is neck-and-neck when it comes to overall e-commerce spend across the four industries we looked into. Affluent demographics are one driving factor. The optimal demographics for e-commerce tend to be young, urban, and middle class. Mexico has in large numbers, with 66 percent of residents (84 million) between the ages of 15 and 64 and 80 percent (102 million) residing in cities.

• Nigeria has the biggest business-to-consumer e-commerce market in Africa, both in terms of customers and revenue. This is due to a self-reinforcing mix of a young, fast-growing population used to shopping online, as well as growing smartphone penetration, making Nigeria a key market for any retailer interested in Africa’s e-commerce landscape.

In order to grow sales and expand their customer base, emerging e-commerce leaders must continue to conquer new global markets. Yet even with the comparative ease and accessibility of selling online, emerging markets can be a challenge for newcomers. To succeed businesses must have a thorough understanding of each market, as well as the local payment environment and local customer preferences.

PayU’s Next Frontier report examines trends in four industry sectors where we believe emergent e-commerce leaders will have the most growth potential in the coming years: Beauty & Cosmetics, Fashion & Gallantry, Digital Goods, and Education.

We also provide information and insights on the local payment ecosystem in each market, based on our expertise as a recognized provider of cutting-edge payment technology and services that help merchants achieve the highest conversion rates with the lowest possible transaction costs.

Fill in the form below to download your copy of The Next Frontier report and learn more about the e-commerce picture across some of the world’s most dynamic global markets.