From Amazon continuing it’s rapid ascent to the rise of e-wallets to challenge traditional payment systems, 2018 saw many interesting trends in the global e-commerce world. How did these trends vary from region to region?
E-commerce in developed markets are different than emerging markets due to a variety of factors. For example, internet penetration tends to be much lower as a greater percentage of the population lives in more rural locations or simply doesn’t have the economic agency to access the e-commerce market regularly.
A recent report details how these trends vary by region and what they mean in terms of affiliate marketing strategies, identifying increased mobile usage, centralization of the e-commerce market, and the rise of influencer marketing as major developments in the world of e-commerce. How do these trends play out in emerging markets? And what do these trends mean for affiliate marketing?
Hold the brakes on Amazon’s global takeover
The major players in the world of e-commerce are continuing to run away with the crown. Globally, companies like Amazon and eBay are pushing out smaller regional e-commerce markets who are unable to keep up with the quality of service and lower prices. Amazon is by far the global e-commerce leader, with its capitalization of $810 billion more than double the second highest, Alibaba at $393.8 billion. But they don’t hold the same dominance in emerging markets.
In developed countries, Amazon rules the e-commerce marketplace. Look no further than the United States, where Amazon owns a commanding 49.1% of all online retail. However, in emerging markets a number of local e-commerce marketplaces are still holding on to much of the online retail space.
In China, Amazon recently had to scale back its initiatives as they failed to compete with the regional powerhouse, Alibaba. Elsewhere, Amazon has yet to even make a dent in the regional markets. In Russia, without a powerhouse like Amazon, the top 100 retailers don’t even crack 60% of the total market share.
The digital market has grown differently in Brazil, with the Latin American online retailer Mercado Livre taking the lion’s share of e-commerce space. With over 56 million unique users each month, Mercado Livre has a commanding lead over the next closest competitor – Amazon at 22.4 million. However, Amazon saw its share of the Brazilan digital market rise over the last year, closing the gap on Mercado Livre – a trend that could continue. In a recent report conducted by Admitad they’ve predicted continued growth for Amazon globally.
A recent trend has been Amazon’s rapid expansion into ad space – a warning sign for both publishers and advertisers. Amazon’s larger take of the ad expenditure pie could effectively cause Amazon to become a ‘walled garden of e-commerce.’ This would give brands the opportunity to advertise within the app and consumers the ability to shop without the need to use the outside web – a harmful blow to affiliate marketers.
E-wallets and increased mobile shopping
The biggest trend over the last decade has been the meteoric rise of m-commerce. So much so that it should no longer be viewed as a trend, but as a key characteristic of e-commerce now and into the future.
Rising alongside increased mobile usage is the increased level of e-wallets as preferred payment methods. E-wallets have seen a massive increase in the last year and are starting to challenge traditional banking systems and credit cards. In fact, some predictions show that online wallets such as Paypal and AliPay will overtake credit cards as the preferred method of e-commerce payment in 2019, largely due to the Chinese market.
India is currently one of the most rapidly developing markets in the world. While mobile internet penetration is still relatively low at 35%, due to the sheer size of the total population, the Indian market is second in the world by the number of purchases from mobile devices. Globally, millenials are most likely to use mobile devices while shopping. With the median age in India being 28, the amount of mobile shoppers in India is only likely to increase.
Many affiliate marketers underestimate what it takes to implement successful mobile marketing campaigns. Mobile is different than desktops and advertisers need to adjust their campaigns in order to work with mobile platforms.
The influencer effect
Influencers such as bloggers, Instagram models, and Youtube content creators have continued to gain more prominence in the marketing sphere. A global trend, influencer marketing is an easy way to gain access to thousands of followers on social media.
An example of this is seen in the case of Sephora Brazil, a large fashion and beauty platform. Since 2013, the company has invested heavily in finding influencers to promote the brand and act as ambassadors for the company. The results have been tremendous: By obtaining access to 6.8 million social media followers they received an additional 60,000 clicks over the course of one year.
Social media influencers play a major role in affiliate marketing throughout emerging markets. For example, in Russia YouTube channels are vital in generating traffic to site. High levels of loyalty, audience involvement, and the ability to see products tested out before purchasing them typically lead to high conversion rates. This trend is seen throughout emerging markets, correlating with global trends.
The e-commerce world will continue to grow and adapt this year and next. While many trends are the same globally, it’s important to note the differences between the markets in order to best plan into the future.
China’s factory activity growth likely moderated during February holiday lull – Reuters poll
BEIJING (Reuters) – China’s factory activity likely grew at a slightly slower rate in February as factories closed for the Lunar New Year holiday, a Reuters poll showed, although growth is expected to remain firm, buoyed by an early resumption of production.
The official manufacturing Purchasing Manager’s Index (PMI) is expected to dip marginally to 51.1 in February from 51.3 in January, according to the median forecast of 20 economists polled by Reuters. A reading above 50 indicates an expansion in activity on a monthly basis.
Chinese factories typically scale back operations or close for lengthy periods around the Lunar New Year holiday, which fell in the middle of February this year.
However, the resurgence of COVID-19 cases in the winter had prompted local governments and companies to dissuade workers from travelling back to their hometowns, giving a boost to the earlier-than-usual resumption of production at many factories, analysts say.
“Although government COVID-19 prevention measures may constrain some manufacturing activities in the near-term, the fact that a majority of migrant workers stayed in their workplace cities for the holiday should facilitate an earlier resumption of business activity following the holiday this year,” said analysts at Nomura in a note to client on Thursday.
Wang Zhishen, a migrant worker from Gansu, told Reuters that his factory, a manufacturer of logistics boxes in the manufacturing hub of Dongguan, only closed for three days during the holiday, thanks to overwhelming businesses. Lured by the 1,500-yuan cash subsidy his factory offered, he chose to work through the holiday.
The Chinese economy has largely shaken off the gloom from the COVID-19 health crisis, with consumers opening up their wallets after months of hesitation. Growth is now set to rebound sharply this quarter, also helped by the low base effect of a year ago.
The country has successfully curbed the domestic transmission of the COVID-19 virus in northern China, with the national health authority reporting zero new local cases for the 11th straight day. Cities that were on lockdown have since vowed to push for a work resumption at full speed.
The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will both be released on Sunday.
The private Caixin manufacturing PMI will be published on Monday. Analysts expect the headline reading will dip slightly to 51.4 from 51.5 in January.
(Reporting by Stella Qiu and Ryan Woo; Editing by Sam Holmes)
Shell in Germany seeks to speed up drive to go green
FRANKFURT (Reuters) – Royal Dutch Shell in Germany aims to produce aviation fuel and naphtha made from crops and to increase to commercial scale an electrolysis plant that makes fossil-free hydrogen, as it seek to move away from crude oil.
The energy major told an online conference on Friday it had applied for subsidies to carry out the work from the European Union and from German funds earmarked for decarbonisation. It did not give detail on the expected cost.
The global Shell group has set itself a goal of net zero emissions by 2050.
At Wesseling, part of the Rheinland refinery complex, it plans to use green electricity to produce synthetic, carbon-free, power-to-liquids (ptl) to replace its conventional jet fuel and naphtha output, building a ptl plant from 2023 and starting production in 2025.
The ptl plant can also use wood as biomass input.
Hydrogen is also considered a green fuel when electricity from renewable energy is used in its production.
Shell said last September it will set up offshore wind farms to provide power and on Friday it said it could also start building a 100 MW electrolysis plant, to be called Refhyne II, from 2022, scaling up from a 10 megawatt plant.
“The product portfolio of the location clearly must change,” said Fabian Ziegler, head of Shell Deutschland.
To further the shift to clean transport in Germany, Shell also plans to equip petrol filling stations with electric car charging points.
Shell is already the owner of German solar battery maker sonnen. On Thursday, it said it has agreed to buy Cologne-based virtual power plant (VPP) operator Next Kraftwerke, Germany’s biggest VPP.
Next aggregates wind and biogas power production and markets it in balancing markets, which can help offset the unpredictable flows associated with renewable output.
(Reporting by Vera Eckert, editing by Barbara Lewis)
Why digital must be at the top of a retailer’s strategy
By Chris Burnside, Account Manager, Specialty Retail, UK & Nordics Global Sales & Verticals, Worldline
COVID-19 is constantly shifting consumer shopping habits from on-site to online, meaning that eCommerce is becoming the main driver of physical retailers’ strategies. Changes in demographics, innovations in payments, and evolving customer needs, as well as the current social isolation that the nation is dealing with are all shaping the retail sector of today.
Online shopping, price-comparison search engines, online coupons and cashback deals have created a new breed of consumers. These shoppers are smart, tech-savvy, hungry for deals and conduct their own research before making purchases. However, these connected customers tend to be bigger shoppers and might potentially become lifelong advocates (including via social media) to bring in more following for a specific brand.
Therefore, retailers must be well prepared to survive in these lucrative, yet challenging times as online purchases surge and consumers demand a way of paying for goods online.
Changing customer expectations
Today’s customers are becoming increasingly more omnichannel in the way they shop and expect to be dazzled by interactivity and connected services, while retaining the simplicity and seamlessness of payments. These shoppers also expect on-site shopping to allow them to mix online and in-store purchases, pick-up of purchased goods, and transparent refund and return policies.
Some retailers might ask what the benefits are of bringing in such demanding customers. However, these types of shoppers can increase a retailer’s profits substantially as they have been proven to deliver a higher value purchase track record compared to regular or smaller ticket item shoppers.
If any physical retailers are in doubt, they should simply consider the benefits that go along with becoming connected and offering their goods online. Firstly, online shopping offers a greater variety of ways to target individuals’ needs, from targeted ads and special occasions coupons to personalised gifts for shoppers that drives sales and generates new and returning customers.
The surging power of online
The other massive benefit is the ability to offer more online. Online is increasingly what more and more customers today are looking for. As more purchases are made online, brands must be mindful that physical retail space is getting increasingly more expensive, especially in top locations. Therefore, with an eCommerce model, businesses can choose a central warehouse located outside the city.
Another vital perk of going digital is the potential to establish direct engagement with your audience via social media. According to research by Facebook, more than 80% of people use Instagram to research their potential purchases and discover new trends and products.
When entering the world of eCommerce there are several challenges that retailers must plan for. These include, online fraud, a lack of local payment methods, no direct support for clients in case of issues or questions, lower authorisation rates and potential IT issues. However, a reliable partner can help mitigate these risks and help retailers to effectively design the registration flow and the checkout experience to retain paying customers and limit fraudsters’ activities.
Such providers have in-store solutions that provide a unified and safe payment flow that immerses and connects the buyer and the seller in this financial journey. It constitutes a set of comprehensive hardware and software-based solutions to open up retailers to more customers and boost their sales and conversion levels. Bridging the gap between online and physical stores by introducing digital kiosks, touch screens and VR experiences to POS transform the shops of today into the shops of the future.
The value of strong acquiring capabilities
Alongside omnichannel, it cannot be underestimated the importance of also offering effective, fast, and reliable acquiring services that are tailored to retailers needs based on regions and their risk appetite. It means the capacity to implement smart routing and switching to effectively optimise authorisation levels.
When offering their products globally, retailers must also consider the importance of having a well-thought out set of local payment methods. This is because one of the major differences between physical retail and online shopping is that once in the shop, customers are likely to pay for the products they really want whether by card or cash. Online sales, especially on local markets can be more complex. This is because they will typically choose a specific local payment method that they are accustomed to, such as BLIK in Poland, Sofort in Germany or iDEAL in the Netherlands. By not offering these, it can be a deal-breaker causing people to drop sales and search for stores that have these options at checkout.
The right acquiring capabilities, by having a global presence and massive knowledge base, can offer pre-implementation support to retail owners and guide them through the implementation process itself. Therefore, with a massive infrastructure and immense experience in the payments industry behind them, the right providers have the capacity to serve customers around the world and provide a seamless payment experience of the future, right here and right now.
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