Digital Shopping? Fine, but from regional providers please
By definition, e-commerce is a worldwide phenomenon. However, the global perspective conceals regional differences, which could lead to investors missing out on opportunities.
Around one tenth of global retail sales are generated online and industry experts expect double-digit growth over the next few years. This growth will not be evenly distributed around the world, however. Broadly speaking, and with a few exceptions, e-commerce is a youth issue. Millennials account for the lion’s share of customers across different platforms, be those dominant players like Amazon or fast-moving niche providers.
Growth in Asia
The best opportunities for growth probably exist where the share of this generation in the total population is high and corresponding purchasing power exists - and where market penetration is still relatively low. From this perspective, it is clear that the strongest e-commerce growth is currently expected in Asia. Online retailers are increasingly focusing on these markets. Companies that know and exploit local conditions have an advantage. They are often local, familiar with the regulatory environment or payment habits. Did you know that 50 percent of the Chinese population uses a cyberwallet? In the USA, it is only 17 percent.
Emerging markets in the starting blocks
The necessary development steps are also expected to reach other regions of the world. In many emerging markets, a growing, well-educated and tech-savvy middle class is longing for the latest goods and services. Companies that recognize the needs here and cover them with the relevant regional instinct will have good prospects.
In the immediate future, however, there will be no way around growth in the Asia-Pacific region.
Risks of investing in financial markets
Investing in financial markets involves risks. The price, value and return of an investment depend, among other things, on the economic development and the price of the underlying securities.