Emerging E-commerce Markets You Should Watch in the 2020s

Emerging E-Commerce Markets You Should Be Watching in the 2020s

By Nick Bartlett on May 6, 2022
Read our nifty guide on which markets to look out for today and what to expect from each one.

As the average e-commerce business owner, it may seem obvious to target large, established consumer markets like the US, Canada, or Germany early on. These are the markets where customers have the highest incomes and expect to pay premium prices for their goods. It’s a safe move for profit.

But by only targeting customers in these regions your business may be missing out on millions of potential buyers and future growth. Emerging economies (like those in Asia and Latin America) will increasingly be key to long-term success for e-commerce businesses.

An emerging economy is one in transition from being low income, less developed, and pre-industrial to modern and industrialized.

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Here are just a handful of reasons why these economies are increasingly desirable for growth-oriented businesses:

  1. Millennials are now the largest group of adults in the world and 90% of millennials live in an emerging economy. Millennials are more educated and tech-savvy than the previous generations and have grown up using digital technology. This makes them a prime audience to reach through the internet.
  2. There is a larger middle class in emerging economies. As of 2018, there were 679 million middle-class households in developing countries compared to just 176 million in developed countries.

So how can you reach these customers for your business and secure your place in a rising economic powerhouse? As a global logistics business, we specialize in helping growing e-commerce businesses reach markets abroad. We have created a nifty guide below on which markets to look out for today and what to expect from each one.

Vietnam

No longer the war-torn country of the 1980s, Vietnam is on the fast track to becoming Asia’s next great manufacturing hub. Businesses from all over the world have come to its shores to set up their Southeast Asian headquarters and an increasingly educated middle class working for them.

Vietnam’s consumer class has risen from 10% to 40% of the population over the past two decades and is expected to reach 75% by 2030. This is driving Vietnam’s purchasing power.

Internet penetration in Vietnam is expected to reach 81% by 2025. This will represent 70 million e-commerce users. Investments in Vietnam’s manufacturing sector and rising productivity have enabled Vietnam’s consumer class to expand exponentially.

What are people buying? 

iDea surveyed 1,078 people in 2020 about their online spending habits. These are the results:

  1. 52% of respondents bought food online
  2. 43% of respondents bought clothing, footwear, and cosmetics online 
  3. 33% of respondents bought home appliances online 
  4. 26% of respondents bought books, stationery, flowers, and gifts online 
  5. 26% of respondents bought train and air tickets online
  1. According to a survey by Q&ME, 71% of Vietnamese GenZ spend their free time on Tiktok. Creating engaging and fun content on Tiktok is key to reaching the younger generation.
  2. Kantar World Panel states that 35% of Vietnam's population are eco-conscious or eco-activist consumers. This number is predicted to rise as millennials and gen-z's become consumers. 
  3. The number of fintech startups in the country has tripled from 44 to 203 in the past 5 years. Due to a less accessible banking and investment industry, young Vietnamese increasingly moved their money to online fintechs.

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What are the risks? 

One risk of doing business in Vietnam is the widespread adoption of the COD model (Cash on Delivery). Vietnamese customers prefer to pay cash to receive their items at customs rather than pay through electronic methods. This can be a pain point for e-commerce businesses as there is a risk of customers refusing to pick up their products once delivered.

There is also the risk that if an order experiences delivery delays, the customer might not be present at the time of delivery or may not have the funds to pay for their order. It can be helpful to work with a logistics company that has expertise in dealing with Vietnamese customers to minimize this risk — CBIP has an active presence there.

India

We’ve been hearing a lot about India over the years but have yet to see brands target Indians in the same volume as countries like China. However, the next few decades may likely show substantial growth in the country with the world’s second-largest population.

India currently accounts for 17.7% of the world's population and has the potential to outpace more developed economies to become the third-largest market in the world by 2030. India’s purchasing power is driven by increased internet usage and the rise of middle-class households. The new middle class will account for 75% of total consumer spending in India by 2030.

What are people buying? 

Statista surveyed 2,087 people aged 18-64 years about their online spending habits in 2020. The results showed:

  1. 54% of respondents purchase their clothing online
  2. 49% of respondents purchase consumer electronics (e.g. TV, smartphones) online
  3. 45% of respondents purchase shoes, bags, and accessories online 
  4. 33% of respondents purchase cosmetics and body care online 
  5. 33% of respondents purchase books, movies, music, and games online
  1. According to a survey conducted by Deloitte, 73% of respondents were willing to pay more money for convenience. The “Buy online, pick up in-store” (BOPIS) trend has become increasingly popular and will become mainstream this year. 
  2. National Payments Corporation of India (NPCI) has been urging consumers to steer clear of cash payments and utilize digital forms of payments instead. Paytm is the most popular method of e-payment in India followed by Google Pay and Phonepe. 
  3. Indian consumers are making a more conscious effort to support local businesses and brands. They are increasingly looking for products with the label “Made in India”, “Locally sourced” or “Vocal for Local”. There is also a rise in awareness about the importance of eco-friendly and sustainable products in the market.

What are the risks? 

The key challenge of operating an e-commerce business marketing India is understanding its diverse consumer segments. 

India has many languages, religions, cultures, styles of dressing, food habits, and castes - many not found anywhere else in the world. This creates unique micro-markets that e-commerce businesses need to be mindful of to cater to. Working with a company that is well versed with India’s diverse demographics and demands can help overcome this challenge.

Argentina

Argentina is a lesser-known South American country with a long history of immigration and development. Few remember it was ranked the 7th-wealthiest country in the world back in the early 1900s. While it has lost standing since the Great Depression, it is still considered one of the middle political players in South America with a rapidly expanding middle class.

E-commerce market growth in Argentina reached 124% in 2020 following the pandemic. In the last four years, the number of online shoppers in Argentina grew by 33% and is expected to reach 62% of the population by 2025. Argentina also has one of the highest internet penetration rates in Latin America (more than 80% of the population).

What are people buying? 

Statista surveyed 1,047 people aged 18-64 years about their online spending habits. These are the results:

  1. 51% of respondents bought consumer electronics (e.g. TV, Smartphones) online 
  2. 44% of respondents bought clothing online 
  3. 29% of respondents bought shoes online 
  4. 36% of respondents bought food and drinks online 
  5. 36% of the respondents bought household applications online
  1. According to CACE, credit cards are the most common method of payment for e-commerce shopping in Argentina. Credit cards used via a payment platform accounted for 64% of all sales in 2021 and Credit cards used via a payment gateway accounted for 12% of all sales. 
  2. Mobile commerce is set to grow by 160% between 2020 and 2024. Robust mobile apps and good desktop experiences will likely be crucial for e-commerce businesses in the future. 
  3. The largest portion of Argentinian e-commerce shoppers (almost 50%) lives in the autonomous city of Buenos Aires. 25% of them live in the surrounding center region of Argentina. This dynamic is set to shift in the coming years with more shoppers emerging from the interiors of Argentina. E-commerce companies need to keep these new emerging shoppers in mind when expanding into the country.

What are the risks? 

Although Argentina is growing steadily and has performed well in Q1 2022, with projected GDP growth of 4.4% for the entire year, it struggles with high inflation rates. Inflation is expected to reach 55% this year and could drastically affect customer purchasing power.

However, despite inflation brought by COVID-19, Argentinians have shifted increasingly to online purchasing and filtered money into safe havens like cryptocurrency.

Brazil

The country best known for rainforests and football (soccer for you Americans) houses the largest population in Latin America. It also has a growing middle class that now accounts for one-third of the population up from 15% in the 1980s.

Today, Brazil is the 15th largest e-commerce market in the world and the largest in Latin America. Its internet penetration rate is expected to reach 78% in 2023 up from 66% in 2021 and its e-commerce market is expected to reach $321.5 billion by 2024

What are people buying? 

Statista surveyed 2,051 people aged 18-64 years about their online spending habits in 2021. These are the results:

  1. 46% of respondents bought consumer electronics (e.g. TV, smartphones) online 
  2. 40% of respondents bought clothing online 
  3. 34% of respondents bought household appliances online
  4. 34% of respondents bought shoes online 
  5. 32% of respondents bought books, movies, music, and games online
  1. Seasonal retail dates accounted for 34% of e-commerce revenue in 2020. Valentine’s Day (June 12th) and Mother’s Day (the second Sunday in May) saw the highest revenue growth in history over the past two years. Black Friday continues to be the most important date for Brazilian consumers.
  2. Brazilians are active on social media and use both social media platforms and search engines to do their online shopping. Both channels accounted for 55% of all sales in home decor items and 44% of all sales in clothing and footwear in 2020. 
  3. 62% of all e-commerce purchases in Brazil were made through mobile devices in 2021. This figure is expected to grow to 67% in 2022. Offering a good customer experience between mobile and desktop devices will be important.

What are the risks? 

One of the biggest challenges for international businesses operating in Brazil is the high tax rate of 6.4% applied to all international purchases. Customers must pay a 60% flat-rate tax on imported products valued from $50 to $500 (this may vary based on state). This frequently dissuades them from international purchases. However, working with a logistics company that is familiar with Brazilian local payment systems can reduce the burden on customers. 

Want to access international markets but don’t know where to start? Give us a call

Are you ready to tap into these new countries stress-free? At CBIP, we have the tools to help your business reach new markets like the ones listed above and thrive.

As a Hong Kong-based business, we’re experienced in navigating complex markets like Southeast Asia and the Americas - and as a fourth-party logistics service, we specialize in making those on-the-ground connections that can give your business a local advantage. While most of our business is currently in the US, EU, and Australasia we’re more than happy to help point you in the right direction for any market.

Ready to start expanding your business? Give us a call. We’ll schedule a consultation with no strings attached and set you up for success.

About Author

Nick Bartlett

Nick Bartlett is CBIP’s director of sales and marketing. His expertise lies in marketing, supply chain management, and corporate retail experience. He honed his skills over 10+ years working across the Asia Pacific region and beyond.

Nick keeps a close eye on new markets and believes successful business operations come through value-based relationships.

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