According to PayU’s global e-commerce report covering online consumer spend across 19 emerging markets Nigeria has emerged as one of the markets to watch out for among emerging eye-catchers globally.
Indeed 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 adoption has accelerated dramatically over the past year, in many markets the pandemic merely pressed “fast forward” on developments that were already gaining steam.
PayU is focused on the advancement of e-commerce in the world’s most exciting emerging markets, where mobile penetration, increased levels of internet access, efforts to expand financial inclusion, and new payment security standards have helped to create a vibrant e-commerce ecosystem that has been spurred on by the changes of the past year. Even before the pandemic, across a number of markets we have already been seeing concerted efforts by the government to encourage greater digitization of the economy and society, with e-commerce as a key pillar.
There has never been a better time to be in e-commerce. Multiple factors have combined to bring us to the tipping point for e-commerce adoption, resulting in more opportunities than ever before for online and omni-channel merchants.
With these opportunities in mind, PayU has launched a new report highlighting unprecedented online consumer spending growth across 19 emerging markets that have historically been overshadowed by more developed e-commerce markets – but should not be overlooked any longer.
Combining external sources with primary data directly from PayU’s online payments platform, the 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 the report:
In Poland, COVID-19 may have been the catalyst for 2020’s e-commerce growth but it is far from the only factor. For many years, consumers’ digital literacy has been increasing thanks to the growing popularity of smartphones and increasing internet penetration, leading to a boom in e-commerce spending. Of the 20.3 million internet users in Poland that shop online, 59% (12 million) do so from their mobile phones.
The number of smartphone users in India surpassed half a billion in 2020, leading more consumers to turn to their devices for a variety of needs – from financial, to retail and educational. More secure and stable infrastructure, and affordable smartphones and internet connections are triggering the movement from traditional payments to e-payment options such as internet banking and subscription-based models.
By 2025, we anticipate that there will be 424 million mobile internet users in Latin America, which will likely grow the sector even further as m-commerce takes off in popularity. As a payment provider, our challenge now is to help reach those new users, understand their needs, and keep them confident in the security of digital payments.
The average person in Turkey is online for 7.5 hours per day and more than 92% out of the 83 million population use a mobile device. This high adoption has led consumers to prioritize speed and convenience and has changed their expectations, particularly when it comes to shopping.
PayU saw an impressive move to mobile payments in South Africa, with up to 85% of transactions completed on a mobile device in 2020, compared to 50% in 2019. This rapid increase in mobile payment usage correlates to the huge increase in smartphone penetration in South Africa.
In Europe, the regulatory landscape is changing, to the benefit of e-commerce. The introduction of Strong Customer Authentication in December 2020 will drive down fraudulent activity, while online payment card security protocol 3DS 2.0 will improve payment safety and the user experience.
Colombia in 2018 set a goal for 85% financial inclusion by 2022, a goal which was exceeded two years early, reaching 85.9% in 2020. During the quarantine months, 1.6 million adults in Colombia obtained a financial product for the first time, while 2.3 million reactivated the one they already had. Colombia is among Latin America’s leaders when it comes to financial inclusion, giving more consumers an opportunity to participate in the digital economy.
Brazil’s Open Banking agenda will bring financial system interoperability to Brazil, reducing barriers to financial inclusion while reducing costs of accessing financial systems for consumers. The Central Bank has also launched QR-code based instant payment solution (Pix), which is expected to become so popular that they will account for 25% of all online payments within three years.
When it comes to total e-commerce spend across the four sectors we investigated, Mexico is toe-to-toe with Brazil, despite having a population approximately half the size. Favorable demographics play a role. For e-commerce to thrive anywhere, the ideal demographic is young, urban and middle class. Mexico has this in abundance, with 66% of citizens (84 million) aged 15 to 64 years old, and 80% (102 million) living in cities.
Nigeria is Africa’s largest business to consumer e-commerce market, both in terms of number of shoppers and revenue. This can be attributed to a combination of a fast-growing and youthful population accustomed to buying online and high smartphone penetration, which make it attractive to any merchant looking to expand.
Conquering new markets is crucial for emerging e-commerce leaders to grow their revenues and extend their customer base. Taking the first step into emerging markets, however, can be complex. It requires deep knowledge of each market, including the local payment ecosystem and consumer preferences.