Business
5 Surprising Places Where Ecommerce Is Taking Off
What characterizes a market that's primed for ecommerce growth? It's not a country's population size, income per capita, nor even the amount its residents are spending on retail goods every year — though those all play a role. Rather, a complex variety of factors signal immediate to near-term ecommerce opportunity in a given region, a new study from Forrester Research shows.
Take South Korea for example, which ranked fourth on Forrester's list of countries positioned for ecommerce expansion. Compared to others on the list, it has a fairly average income per capita of $22,000. But its consumers are ready to spend: It ranked third on the number of debit/credit cards per capita, fourth in market activity and intensity (stock values relative to GDP), and has a tech-savvy population. Government support is another positive indicator: The country has been regulating the growth of discount megastores, banning for example free shuttle services to shoppers in remote areas, which opens the way for smaller ecommerce businesses.
Other surprising candidates to make the top 10 list were the Netherlands, Norway, Singapore and Sweden — surprising because they all have mature economies (versus, say, Brazil or China) and, compared to India and Russia, relatively small populations. As Forrester explains, no single factor — like Internet penetration or population size — equates to a large online retail market. Other variables, including consumer attitudes, a willingness to use credit and debit cards in lieu of cash, and a solid courier infrastructure all play a role.
Here are the 10 markets (out of 55) that present the biggest immediate to near-term ecommerce opportunity, according to Forrester:
1. U.S.
2. China
3. Japan
4. South Korea
5. UK
6. Germany
7. Netherlands
8. Norway
9. Singapore
10. Sweden
2. China
3. Japan
4. South Korea
5. UK
6. Germany
7. Netherlands
8. Norway
9. Singapore
10. Sweden
The U.S. outranked China by a large margin — in the study, the U.S. garnered a score of 73.4, versus China's 51.1. Though they are the two biggest retail markets in the world, more than half of U.S. consumers buy online, compared to one-fifth of Chinese. The Chinese government's encouragement of consumer consumption allows it to outrank other populous countries, like Russia and India.
Japan is another interesting case. Although the size of Japan's retail market is half of that of the U.S., its consumers are wealthy and spend a lot on non-food retail goods, making Japan the third largest retail market in the world. It also has a tech-savvy population and a high rate of credit/debit card use per capita.
While the U.S. outranks China for now, it may not always remain the case. It has a population four times the size of the U.S., and demand for goods will increase in line with the continued growth of disposable income and population. "Depending on the success of the Chinese government in restructuring economic wealth policies in the coming years, China could be a serious contender for the most ecommerce-ready country," Forrester concludes.
Images: Chung Sung-Jun/Getty Images and Forrester
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