Presentación Kati Suominen - eCommerce Day Buenos Aires 2016
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Digital Disruption in 2016-2020: Where Is Growth Coming From – and Is That Where You Want to Be? Dr. Kati Suominen Founder & CEO, NextradeGroup & TradeUpCapital Fund Adjunct Fellow, Center for Strategic and International Studies (CSIS) 11 August 2016 eCommerce Day, Buenos Aires [email protected]
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Transcript of Presentación Kati Suominen - eCommerce Day Buenos Aires 2016
Digital Disruption in 2016-2020:
Where Is Growth Coming From – and Is That Where You Want to Be?
Dr. Kati SuominenFounder & CEO, NextradeGroup & TradeUpCapital Fund
Adjunct Fellow, Center for Strategic and International Studies (CSIS) 11 August 2016
eCommerce Day, Buenos [email protected]
Ecommerce is still driven by only a handful of humanity…
7.4bn people
5.2bn mobile phones
3.2bn online
1.1bn high-speed
Internet
• Wealthy• Urban• Young• Male• Developed
countries
?
Megatrend 1: Huge Growth in Internet Users
270m in LatAm
More & More of LatAm Netizens =Digital Buyers
Megatrend 2: Incomes Are Growing
Per capita income, 2016 and 2020
• 75% of consumption growth is from income growth
Income Growth Internet Use, Consumption
LatAm 2016
LatAm 2020
Strong Income Growth in LatAm 2016-2020
Megatrend 3: More Low Income Online Shoppers – do you buy online?
Before
Megatrend 3: More Low Income Online Shoppers
Now
Ecommerce as % of LatAm Retail Growing
• UK: 14%• US: 8%• China: 13%• Brazil: 4%
By 2020
• 270m new Internet users in LatAm, 3bn globally Most lower income
• LatAm shopper is wealthier by 10-15%
• More low-income Latin Americans shop online
How do you get at this massive market?
Global Income “Pyramid”
1bn people<$1 / day
3bn people$1-$8 / day
2bn people$10-$60 / day
1bn people>$60 / day
Global Income “Pyramid”
1bn people<$1 / day
3bn people$1-$8 / day
2bn people$10-$60 / day
1bn people>$60 / day
Mobile Use Is on Fire
Smartphone Usage Rates 30-50%
Low-Income People Connect Online on Mobile
Go “Mobile First”
Buy online to save time
Buy online to find best fit, save money
Know Your Customer & what drives them
And Do Customer Analytics
Source: McKinsey.
Know Where Your Customer IsSource: Esri data.
2016
And where she is tomorrowSource: Esri data.
2020
Cross-Border Ecommerce Grows Much Faster
Cross-border ecommerce growth = 5x domestic ecommerce growth in 2016-2020
Digital Disruption in 2016-2020:
Where Is Growth Coming From – and Is That Where You Want to Be?
Dr. Kati SuominenFounder & CEO, NextradeGroup & TradeUpCapital Fund
Adjunct Fellow, Center for Strategic and International Studies (CSIS) 11 August 2016
eCommerce Day, Buenos [email protected]
$
Legal and regulatory frameworks
Ecommerce strategies Ecommerce logistics
Online payments
ICT infrastructure and services
Ecommerce skills
Much has to go right in the “enabling environment”
Ecommerce is still driven by only a handful of humanity…
Demographics
Geography Psychographics
Ecommerce is still driven by only a handful of humanity…
Demographics
Geography Psychographics
Demographics
Know Your Customer
Internet is used more by some demographic groups
32Source: UNCTAD
% of individuals purchasing products online, 2013
Most emerging market shoppers have not bought online
…and only some companies sell online
% of companies with online sales
Typically these are: Larger, fast-growing, skill-intensive, export-oriented, urban
Source: Author based on Eurostat.
Even most EU companies are offline
The Next 5 Years
Cross-Border Trade Is Growing
Who’s Driving This? B2C Ecommerce Markets in 2015
Source: eMarketer.
Emerging Markets Catching Up
% of people using the Internet
Megatrend 2: Incomes Are Growing
Per capita income, 2016 and 2020
• 75% of consumption growth is from income growth
China’s $24,000 Club
• Higher incomes: more discretionary income, purchases of luxury products
• 100 million by 2020
• Highly connected
• Buying ~$6.5T
• 53% of the millennials – who buy 40% more than older people of same incomes
Womenomics
• Women drive 65-80% of all B2C purchasing
• Women have money to spend: incomes at $18T by 2018
• U.S. women make 61% more online purchases than men and make up 58% of online spending
Asian women emerging as spenders –and breadwinners
Source: EIU.
Huge Mass of Urban Consumers
• Want to reach 80% of consumers by 2020?
Be in 430 world markets = cities
• 410m people & 61% of world GDP by 2030 in 750 mega-cities
• 91% of growth in consumption comes from cities
• Large young & urban populations in Nigeria, China, India, Brazil, U.S.
• Most urban consumption still in China + North America: 315 cities make up 40% of consumption growth
Biggest spenders: today’s millennials
Source: McKinsey Global Institute.
Source: McKinsey Global Institute.
Surprise! Rural ecommerce growing fast
• Rural consumers: 80m new online buyers in 2015 alone
• Rural buying growing with rise of smartphones: physical retail not near, while phones are
• India: more and more demand from 3,313 tier II & III cities & 1,233 rural hubs
Cities
What Is Your Strategy?
New Spending Power
New connectivity
China $24K Club
B2C & B2B
Emerging markets of Africa, LACB2C, B2B
Emerging market women
B2C
Advanced economy
women and men B2C
Advanced economy
businessesB2B
Rural, BOPB2C, B2C
LatAm Companies: Already in Crossborder
LatAm Companies: Already in Crossborder
LatAm Companies: Already in Crossborder
LatAm Challenges
LatAm Challenges
LatAm Challenges
Most consumption still in advanced economies
% of world GDP per capita, 2016 and 2020
• B2B ecommerce at $6.7T by 2020: manufacturers and wholesalers getting online
• Smartphones accelerate this: already, 42% of B2B purchase researchers use a mobile device during the purchasing process
• >50% of B2B decision-makers in 2020: Millennials
B2B Is Exploding
Source: Google.
2012 2015
3x growth in B2B searches from mobiles
In B2B too, Think of Millennials & Mobile: Shift in B2B Researcher Demographic
Source: Google.
How Do People Buy (or Browse)
Source: Nielsen.
What Sectors – and Where?
Source: Nielsen.
