The e-commerce boom in emerging economies

E-commerce is something that almost everyone in established economies has used and relied upon to a large extent. We only have to look at the example of Jeff Bezos, the CEO and founder of e-commerce giant Amazon to see the growth and value of the e-commerce market.

As of the 26th of August 2020 he was reportedly worth a cool $204.6 billion according to Forbes which is staggering considering his humble beginnings selling books from his Garage in late 1993. However, the e- commerce boom had not hit emerging economies until much later. This could be partly due to the lack of infrastructure and efficient postal services in emerging economies meaning that e-commerce services in developing economies wouldn’t be able to satisfy the modern day customer’s demand for fast and efficient service from online shopping.

It is also worth noting that many citizens in developing economies do not have access to technology, that we take for granted in the developed world such as widespread cellular and internet service, and also smartphone technology. This means that e-commerce services typically haven’t been widely accessible in these areas. As technology becomes cheaper and more accessible to the general public, it is revealing the developing world as a potentially incredibly lucrative market for e-commerce companies to establish themselves in.

E-commerce in South Africa:

South Africa is a prominent emerging economy and is part of the BRICS economies which is an acronym coined for the association of the 5 most prominent emerging economies comprising of Brazil, Russia, India, China and South Africa. As South Africa’s economy grows, the society is becoming more materialistic and based on consumerism evidenced by retail now being the third largest economic sector in South Africa. This presents major opportunities for expansion in South

Africa to companies such as Amazon and other e- commerce marketplaces.

E-commerce is something that almost everyone in established economies has used and relied upon to a large extent. We only have to look at the example of Jeff Bezos, the CEO and founder of e-commerce giant Amazon to see the growth and value of the e-commerce market. As of the 26th of August 2020 he was reportedly worth a cool $204.6 billion according to Forbes which is staggering considering his humble beginnings selling books from his Garage in late 1993. However, the e- commerce boom had not hit emerging economies until much later. This could be partly due to the lack of infrastructure and efficient postal services in emerging economies meaning that e-commerce services in developing economies wouldn’t be able to satisfy the modern day customer’s demand for fast and efficient service from online shopping.

It is also worth noting that many citizens in developing economies do not have access to technology, that we take for granted in the developed world such as widespread cellular and internet service, and also smartphone technology. This means that e-commerce services typically haven’t been widely accessible in these areas. As technology becomes cheaper and more accessible to the general public, it is revealing the developing world as a potentially incredibly lucrative market for e-commerce companies to establish themselves in.

E-commerce in South Africa:

South Africa is a prominent emerging economy and is part of the BRICS economies which is an acronym coined for the association of the 5 most prominent emerging economies comprising of Brazil, Russia, India, China and South Africa. As South Africa’s economy grows, the society is becoming more materialistic and based on consumerism evidenced by retail now being the third largest economic sector in South Africa. This presents major opportunities for expansion in South

Africa to companies such as Amazon and other e- commerce marketplaces.

This is especially true in the COVID-19 era which has only accelerated the growth of e-commerce in developing economies such as South Africa, as consumers opt to shun traditional in store and face to face retail for the more pandemic friendly online retail experience. `Bottles` is a South African e-commerce start-up which was launched in 2016. The service offers on demand delivery of alcoholic beverages in major South African cities, offering delivery in under 60 minutes. Co-founder and CEO Vincent Viviers stated how he believes that the Coronavirus pandemic has accelerated the e- commerce industry growth by about 4-5 years at least as the start-up saw demand over the lockdown period increase by three times during the lockdown period.

By: Jack Eaton – University of Reading

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