‘… THE GLOBAL E-COMMERCE BOOM’ part two
by Porter Erisman
Published by St. Martin’s Press
eBook ISBN: 9781250088680
Copyright (c) 2017 by Porter Erisman
“Does this notion seem Pollyannaish? Absent the example of China, it might. But I had a front-row seat during China’s e-commerce revolution, so it’s clear to me that other countries are following suit, transforming both their economies and the way retail is conducted around the world. The boom will affect brands, retailers, providers of logistics, and financial institutions in highly disruptive ways that will become fully apparent only over time.
Just look at where China is today. In 2000, when I joined Alibaba, just as it moved out of founder Jack Ma’s apartment, skeptics told me that e-commerce would never work in China. The reasons they cited were many: Payment infrastructure was inefficient. Credit card use was nearly nonexistent. Logistics infrastructure was poor. Engineering and management talent was concentrated in Silicon Valley. And, most important, they said, Chinese shoppers would never trust online merchants enough to buy products online. Fast-forward less than twenty years, and the figures are staggering:
* China has now become the largest e-commerce market in the world.
* In 2016, in a single twenty-four-hour period, Alibaba’s consumer websites alone handled more than $17.8 billion in transactions, more than the total combined online sales of Black Friday and Cyber Monday in the United States.
* E-commerce in China now represents 14 percent of total retail sales in the country, compared to 8 percent in the United States. By 2020, e-commerce in China will reach an estimated 21.5 percent of total retail sales in the country.
And this is with only half of China’s population online. We can only imagine how big the market will become as the rest of China moves online.
Since Alibaba’s $25 billion2 initial public offering (IPO) in 2014—the largest in history for any company—China has received most of the headlines about e-commerce. But the China experience has triggered an investment wave in e-commerce in India, Southeast Asia, Latin America, and Africa. This book will take you through these emerging mega-markets to show where they started, where they stand now, and where they likely are going.
To give the discussion historical context, I will begin in the United States, at the American frontier of the 1800s, when retail took root in the great emerging market of its time. Part of the story is how retail’s gradual evolution in the United States made for a relatively smooth transition from traditional commerce to e-commerce, which the giants eBay and Amazon dominated in the early days. The other reason to start with the United States is that the early history of e-commerce in today’s emerging markets has been one of failed attempts to apply US business models to developing countries. Understanding how the US experience skewed early attempts to introduce e-commerce to emerging markets can help us understand why e-commerce in the developing world—and brands and companies there—is growing in a different direction.
In Chapter Two we head to China, the biggest e-commerce market of all. To understand how China’s deep cultural roots have led to a more social approach to e-commerce, we will visit some of China’s remote villages. Then I’ll explain how, after years of Maoism, the opening of China’s economy triggered the conditions that enabled China’s e-commerce to leapfrog beyond that of the West and play a much more important role in China than its counterparts did in North America and western Europe. In tracing this evolution, I will discuss some of the key players, including Tencent, Jingdong, and my former employer, Alibaba.
Chapter Three will cover China’s current state of e-commerce and its likely future direction. China’s market has matured into a more structured one than India’s and Southeast Asia’s, so it provides an excellent window to the future of e-commerce in emerging markets. I will describe how China’s main platforms for e-commerce differ from those of eBay and Amazon. I also will show how Chinese businesses are making the most of the e-commerce opportunity and discuss some of the bigger trends and lessons of the Chinese experience.
In Chapters Four and Five we travel to India, the world’s next mega-market. Mumbai’s dabbawallas (lunchbox deliverymen) provide a great example of how innovative companies are overcoming one of India’s biggest challenges, logistics. When I interviewed the key pioneers of e-commerce in India, they generously discussed their mistakes and their successes, India’s unique challenges, and where its e-commerce may be headed. All the global e-commerce leaders, from eBay to Amazon to Softbank to Alibaba, have made India the center of a proxy war for global dominance of e-commerce, investing billions of dollars in a mad scramble for “the next China.” What they are doing provides a sense of how businesses should be positioning themselves for India’s e-commerce boom.”
An insightful, practical guide to e-commerce in emerging markets–and how to profit from their explosive boom.
From China to India to Nigeria, e-commerce is entering a golden era in countries that were long left out of the e-commerce gold rush experienced in the West. If the story of the first twenty years of e-commerce’s growth was set in developed markets, the story of the next twenty years will be set in emerging ones. The rise of e-commerce in emerging markets is being driven by three major trends: widespread internet adoption, a rising middle class, and, most importantly, innovative new business models that serve the needs of local customers better than the models used by western e-commerce giants.
Six Billion Shoppers takes readers on an exciting and colorful journey around the world to visit the next e-commerce mega markets and explore how a new e-commerce boom is opening opportunities for entrepreneurs and global brands alike. Traveling through Nigeria, China, India, Southeast Asia, and Latin America, Porter Erisman addresses e-commerce across these new markets and what it means for western brands. He argues that e-commerce in developing countries is revolutionary and will play a much larger role in emerging markets than in the West. With e-commerce in emerging markets entering a rapid period of expansion, Six Billion Shoppers explains how to seize the massive opportunity created by emerging market consumers and provides practical advice on how to ride this new business trend.
From 2000-2008, Porter Erisman worked as a Vice-President at Alibaba Group, joining the company just as it moved out of founder Jack Ma’s apartment. He is the writer/director of Crocodile in the Yangtze: The Alibaba Story, an award-winning documentary about the rise of Alibaba and its famous founder, Jack Ma. Erisman is also the bestselling author of Alibaba’s World: How a Remarkable Chinese Company is Changing the Face of Global Business. An expert on e-commerce in emerging markets, he has consulted to e-commerce companies in Africa, Asia, and Latin America and has spoken at high-profile industry events in over 30 countries.