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COVID-19 and online shopping behaviors in emerging markets

As more and more cities around the world are going under lockdowns (again), and with nonessential businesses being ordered to shut their doors, customers around the world have slowly made the switch to online shopping throughout the year. People now shop online for their electronic products instead of going to stores, get food delivered instead of going to restaurants, watch movies online instead of going to movie theaters, etc. Online consumption is becoming the new normal. However, shopping behaviors have not changed overnight, we are experiencing an acceleration of an existing trend, especially in the developed economies where that trend already started long before the beginning of the pandemic.

While developed nations are experiencing a shift, with online retail sales being higher than general merchandise sales in the US for the first time in history, the biggest change to come will be in emerging markets, where digitalization is catching up. In those markets, ecommerce and home delivery services are also becoming increasingly popular and are showing strong signs of a change in purchasing behavior.


2020 will be a turning point for the digitalization of emerging markets*

As we are reaching the end of 2020, it is becoming more and more evident that the pandemic will have a lasting effect on people’s online shopping behaviors around the world, and there is strong indication that 2020 will be a turning point for the digitalization of emerging markets.

For example, according to Reuters, Brazil ecommerce jumped almost 60% in the first five months of 2020 as more consumers have shifted to online shopping during the COVID-19 pandemic. The number of online orders grew by almost 66%, with cosmetics, furniture and electronics driving the growth.

Similar numbers are also visible in Asia. A Blackbox Research report showed that South East Asia experienced a spike in online spending during the COVID-19 pandemic, with almost 60% of people in the region now spending more online. The report also showed that the average South East Asian consumer is now spending online 32% more than before the pandemic. South East Asia’s retail industry went through a profound shift since the beginning of 2020. Consumers are more digitally adept than before, with older generations getting more comfortable with digital tools and services. The generational gap is shrinking.

This trend was also boosted by the physical economy going digital. In developing countries, a lot of small businesses had to go digital in 2020 in order to survive. Smaller merchants and traditional brick-and-mortar retailers had to undergo a digital transformation of their businesses so they could keep operating.

With the rise of online users and consumers, companies selling digital products have an immense opportunity in emerging markets going forward. However, in order to be successful, online merchants that want to tap into that potential should keep in mind that going global comes with research and localization. In fact, in order to make local consumers feel safe and secure, companies will need to offer a customized customer journey and shopping experience, in the local language(s), using local payment methods and local currencies, with a localized customer support, run checkout optimization tests, minimize fraud, comply with local taxes and regulations, and more.

Businesses that are selling digital products and that want to expand into emerging markets are well positioned to compete on a global scale using Softline Ecommerce. Our all-in-one ecommerce solution makes cross-border digital sales easy and safe, so that online merchants can reach new customers and grow their business in Europe, Asia and Latin America.

If you want to conquer emerging markets successfully and find out more about us and what we can do together, you can contact us directly on our website, via Linkedin or email (ecommerce@softline.com).

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