The Growth of eCommerce: Developing Nations and the Integrated Role of SMEs
Online shopping has become commonplace in many parts of the world including the United States, Europe and Asia. The main reason for the growth in eCommerce and online business is the convenience that it offers to customers, who have begun to fall in love with this new way of shopping. Actually, year-over-year, eCommerce revenue is increasing by double-digit percentage points.
This trend is not going unnoticed around the world. People in developing countries are increasingly showing their tendency for eCommerce and online shopping, which has made savvy retailers in these countries sit up and take note of this phenomenon.
According to reliable research, Latin America was host the fastest-growing online population in the world last year, which saw a big rise in both eCommerce and digital advertising. The main trend which has caused this huge wave of online shopping is the 2013 holiday shopping season, which continues to grow in Latin America with the total number of shoppers now up by 16% compared to the previous year.
This trend of eCommerce going big in Latin America is being replicated in developing nations in other parts of the world as well. Worldwide, people are sitting up and taking notice that the use of eCommerce is changing the conventional way that business has been conducted in the past. The growth of eCommerce is closely related to the growth of the Internet in developing countries. According to reliable statistics about Internet Growth worldwide, out of the top 10 countries online, the USA sat quite near to the bottom of the table at #8. However, China tops the list at #1 with India following close at #2.
Considering percentage figures, Internet users grew 38% in India, 44% in the Philippines, and 26% in Turkey. Internet users also grew in China (12%), Indonesia (22%), and Mexico (19%). However, internet users in the USA grew marginally (1%) and Russia (3%). Based on the ITU’s 2010 stats, for countries like Nigeria and Japan, Nigeria maintained 28% population penetration while Iran increased its internet users from 13% to 48% . Encouraging figures also prevail for other countries, making it safe to say that developing countries are driving growth worldwide. Hence, it can be safe to derive that eCommerce, piggy backed on the growth of the Internet in developing countries, is riding the growth wave currently.
As eCommerce goes forward to convert the entire world into a small village, barriers such as distance are not a hindrance for conducting business nationwide or even worldwide. In developing nations, small and medium sized enterprises (SMEs) are beginning to be the segment most benefited by eCommerce. No wonder, SMEs hold the key to eCommerce growth in the developing world. eCommerce works by offering global access to these businesses by linking them up with the more competitive world around them. Through this method, developing countries get an opportunity to increase their competitiveness and offer better quality and services to the global world.
Developing countries have the potential within them to offer and promote their products and services as a way to increase business and thereby their GDP. This is why eCommerce is being touted as the next big thing for developing countries. Through SMEs and eCommerce, developing countries get a chance to showcase their business to the worldwide community. Online promotion changes the equation in the favor of the participating SMEs and therefore in the favor of developing nations ultimately. eCommerce thus opens up a wide spectrum of market opportunity for its participants. Participating SMEs in the developing nations get an opportunity to discuss a wide range of business opportunities and discuss their problems as well as opportunities with a global audience. At the same time, eCommerce connects developing nations with their peers worldwide, so that they are able to share related information, knowledge, experience, as well as solutions.
Consequently, developing nations are able to grow faster, see a wide range of opportunities, and broaden their vision for a prosperous future.