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Becoming Global: The E-Commerce Era Archive
Everywhere are customers - and so are brand names. Your design is on-line and inexpensive. Your messages are that companies need to awaken to recognize the emergence of the world' s largest user. Studies by mutual fund managers point to the same conclusion: a prosperous middle stratum of users who are willing to shop on-line with overseas providers is growing in poor and industrialised countries.
Demand Institute, a cooperative effort between a large business alliance and Nielsen, a leading research economist on consumption statistics, predicts that the number of affiliated payers - those with free online and free access to money - will grow from 1.4 billion in 2015 to 3 billion in 2025. Developing countries will see economic expansion driven by better connectivity, and wealthier countries will see digital literate users with enough revenue to make discretionary buying.
One way or another, it is a unique occasion for companies to increase their business by several orders of magnitude. Whatever the size of the business, it is a unique chance for companies to increase their business basis by several orders of magnitude. 1. In September, Pablo Isla, president and chief executive officer of Inditex, the apparel group that includes Zara, said all corporate brand names would be available to global consumer by 2020. Inditex revenues grew 41 percent in 2017 - evidence that the increase is here.
Companies that really want to become truly multinational will find plenty of help. Those who want to increase turnover in Brazil or India, where bureaucracy is a part of everyday living, will find their help particularly welcome. Elaborate procedures, such as obtaining an EU certification of finished product origins, can be handled via an on-line platform such as Edge CTP.
Once the application has been submitted, the application will be sent to a specific Chambers of Trade to be postmarked and sent either on-line or by mail. When it comes to payments and credit, managing them has never been so easy for multinational consumer organisations. More than 300 methods of payments can be processed by the most demanding parties, so that customers can be served in all market sectors, even if the bank has a poor financial structure.
E-commerce's fast-paced growth is changing many developing countries and brings a number of consumer and entrepreneurial rewards. Whilst there are clear chances for multinationals, locally based companies could have singular merits. E-commerce has reduced the cost and logistics challenge of setting up a company and eliminated the need for brick and tile and grout shops.
This has helped to ensure that companies in developing markets that would otherwise be excluded from the markets are provided with funds, says Raj Rajgopal, IT service provider Virtusa's President of digital businesss strategies. "This in turn has encouraged the establishment of new companies to fill the capacity gap, such as logistic, insurances and even electronic banks, which reinforces the role of an emergent country in winning new product and other retailers," added Rajgopal.
E-commerce's emergence will bring many advantages to users in these countries, especially for the inhabitants of countryside and smaller conurbations. A study by Boston Consulting Group found that a key factor in the high e-commerce revenue in smaller towns is the opportunity to buy from brand names that do not have a retail outlet.
BCG found that nearly 50 percent of the Tmall Alibaba on-line supermarket sales of luxury skincare items are purchased by buyers in China's urban areas where these brand names have no real footprint. The cost of opening brick and mortar shops in a overseas country can be significant even for large multinationals.
This does not mean that it is simple to set up an e-commerce company in newly industrialised countries. Familiar supply chain issues and secure payments are common, while on-line shopping in some developing countries can respond to unanticipated cost and barrier issues when they check out. All attempts to view newly industrialising countries as a homogeneous whole are doomed to fail for global players.
Because of their extensive know-how and experiences with their respective market, locals are often at an edge. In this way, they can provide a consumer offering that facilitates the move from off-line to on-line commerce. Several use their branch networks to motivate reluctant customers to try on-line buying. As Jeongmin Seong, Sr.ellow of McKinsey Global Institute in Shanghai, says, omni-channel shopper combinations are in use in emerging countries, with around 85 percent of Chinese buyers using them.
Approximately 60 to 70 percent of respondents said they were enthusiastic about omni-channel service such as on- and off-line (O2O) collection, QR codescan purchases, returned products and VR (virtual reality) experience in off-line stores," says Seong. E-commerce in these countries is not exploding in a void of air, with progress in on-line commerce encouraging the creation of new companies working to find answers to logistics problems and incomplete ticketing schemes.
Combining these elements helps newly industrializing nations attracting innovation and new retail customers and improves efficiencies in less developed economies. For example, in China, the five top five retail companies account for only between two and 20 percent of the total retail value, while in the United States the e-commerce industry is far less fragmentary, with the top five companies in most category between 30 and 70 percent of revenue.
As e-commerce picks up, a number of sectors will consolidate, enabling economy of scale. At the same time, the number of sectors will increase. You can now register for the Going Global: The E-Commerce Era seminar! E-commerce is generating a new type of consumers globally, and it is not only the West that have a great taste for buying now.
Even in high-growth countries, there is a rapid increase in market demands. A lot of people see credit cards as a cure-all, assuming that they are a total one. Locally minded is essential. India, for example - one of the strongest potentials threshold countries - has only 1.25 percent credit spread.
More than 30 percent of Latin America's turnover comes from liquid funds. Traders who do not have locally processed products could miss over 80 percent of the mart. Consumers' behavior varies greatly from area to area, from state to state, and traders who do not fully grasp what is happening locally and what is needed will not harvest the fruits.
Whether it' s your particular preferred method of paying or different transmission speeds, no two market are the same. To be successful in these high-growth emerging economies, retailers need to provide easy methods of making purchases, i.e. making purchases through the most popular option and system available in the market. The first time we brought our credit products, LazyPay, to India, many folks said it would not work.
Developed to make small fast and simple payment transactions, such as crossings or take-away meals, easier for the consumer to get microloans of up to $50 (£38). On the contrary, the increase has been explosive - India's consumer loves it. A deep insight into the intricacies of each individual markets is critical for traders looking to grow on a global scale, including an appreciation of often complicated regulations.
Collaboration with a locally based business will be crucial when companies are faced with these potentially expensive shades of regulations. Because we have branches locally, we can do that; we are practically an India based business. However, although regulations may seem old-fashioned in some emerging economies, they can also be very topical.
We use the information we gather in regulatory and proprietary ways to grant credit to our customers in countries such as Colombia, India and Poland. Here we have launched the "buy now, buy later" option, which allows customers to use credit in a responsible way and buy goods up to 30 working days after receiving them.
It only works because we are locally; we have close ties with regulatory authorities; we have the full license to lend; and we ensure that our dealers comply with regulations. Threshold countries provide a great chance for on-line retailers globally, but the only way businesses can realize their full value is to understand the specific pay preference for each area and be able to provide these choices in accordance with applicable regulations.
With our unified application programming interface (API), merchant can have dependable and scaleable contact with PayU's PayU regionally and locally based payments processing companies, allowing them to meet the individual needs of each store. We expect the cross-border trade to grow from 401 billion dollars in 2016 to 994 billion dollars in 2020. Since almost two-thirds of them come from high-growth countries such as Asia and Latin America, the expansion possibilities for dealers are unparalleled.
As crypto currencies have the capability to ease transactions between traders, users and processors, we are monitoring this area with interest. Mr. Setzer is CEO of BuyU and in charge of cross-border operations, worldwide distribution, core account management, strategy partnership and direct selling. There is no sign of an imminent slowdown in the world's biggest e-commerce store.
Already dominating Asia's e-commerce landscape, China accounts for over 80 percent of the region's on-line commerce revenues, with the country's on-line retailing industry likely to be the first to hit $1 trillion later this year. Statista estimates that e-commerce revenues represent 28 percent of China's overall retailing revenues, so much of the country's purchasing power is not used by e-commerce platform.
Numerous point-of-sale e-commerce sites, among them the Alibaba and JD.com mega stores, are in competition with state-of-the-art e-commerce portals such as Xiaohongshu and Pinduoduo, thereby creating new, cutting-edge ways to do business on line. China's on-line retailing industry has played a pioneering role in the use of the so-called "new retailing ", in which the fusion of off-line and on-line trading channel takes place to keep the on-line selling industry growing robustly.
Since the inhabitants of China's countryside communities will be linked to the Web - mainly through the use of portable equipment - the e-commerce industry will reach new highs, $1.8 trillion by 2022, according to researcher Forrester. Brazil's e-commerce industry is growing fast thanks to the more than 120 million web surfers who have made the nation the biggest Latin American on-line buying area.
Worldwide e-commerce companies are making significant investments in the nation, with Amazon increasing the storage capacity fourfold early this year, indicating that the US company is ready to grow its business. Brazilian consumers are becoming more and more optimistic that they can shop on-line and that deliveries will be on schedule as fears about secure payments and poor logistical performance remain.
Due to the often complicated fiscal framework for domestic e-commerce businesses, foreign e-tailers are already strongly represented on the Brazil based markets. Locals like Luiza magazine have adopted an amnichannel stance to fend off contenders and use their retail outlets as sales channels to streamline consumers' shopping trips.
More than 40 percent of Latin America's overall e-commerce revenue comes from Brazil, where the nation is well on the way to achieving double-digit e-commerce revenue yearly growth by at least 2021, according to Euromonitor International. E-commerce in Poland is one of the most powerful e-commerce centres in Eastern and Eastern Europe, with the industry growing at double-digit rates every year since 2012.
First and foremost is the Allegro retail portal, where 53 percent of web surfers buy from Poles, while only 16 percent shop on international websites, according to Gemius. Rugged handset e-commerce selling is contributing to the growth of the domestic on-line retail markets as handsets grow at a significantly higher rate than e-commerce as a whole.
Expectations are that heavy web traffic and a rising level of security consciousness in on-line purchases as well as a new Sunday trade prohibition will further strengthen the domestic e-commerce-sector. Aliexpress, the China e-tailer, has worked tirelessly to win Poles through free shipping and is now the number one overseas purchasing destination in the nation, defeating competitors such as eBay and Amazon.
In the United Arab Emirates, commerce is not as well advanced as in the West, which, according to a Boston Consulting Group survey, accounts for just under two percent of overall retailing revenue. However, the Emirate's growing youth populations, enhanced fulfillment infrastructures, and ever-increasing choice of goods available on-line, all of which enable e-tailers to better measure themselves against conventional commercial centers, offer enormous opportunities for economic upturn.
B-to-c revenues skyrocketed from 2015 to 2017, and according to a Research and Markets survey this rate of expansion is expected to grow at more than 20 percent annually through 2021. Some of the recent high-profile transactions will also intensify rivalry in the sector, in particular Amazon's acquisition of Dubai-based e-commerce site Souq for an unknown amount.
As part of the UAE's shift to a more e-commerce-focused economy, the introduction of two e-commerce free zones provides high-tech storage areas where goods can be stored before being dispatched around the globe. In spite of the slowdown in recent years, the Indian e-commerce industry is still expanding more rapidly than other major Asia countries such as South Korea, China and Japan.
A Forrester study expects India's e-commerce revenues to grow at a near 30% pace by 2022, from the present $27 billion per annum. Three billion Indians on international markets. Nearly half of the country's entire web user population is exclusively on the move, and this number will rise as the number of Indians in the countryside continues to go on-line via smart phones.
Locally and internationally active e-commerce companies are facing fierce competition for the ascendancy and are investing heavily in infrastructural and logistical services. There' a great chance for e-tailers in India since only 14 percent of Indians with access to the web buy on-line, according to Morgan Stanley, which leaves a prospective audience of tens of millions as well.
Please complete the following to gain entry to Going Global: The Ecommerce Era webinar with Matthias Setzer, Chief Commercial Officer at PayU and Floriane Gramlich, Global Head of Payment Solutions at OLX Group.