Report: Emerging markets poised for digital revolution

Source: China Daily

The value of digitally influenced spending in emerging markets will approach $4 trillion by 2022, according to a report by the Boston Consulting Group.

The report, titled Digital Consumers, Emerging Markets, and the $4 Trillion Future, said half of the population in emerging markets worldwide is now connected to the internet—a stunning increase from 2010, when fewer than a quarter of those in emerging markets were online, the report said.

"Emerging markets are on the brink of a major digital revolution," said Nimisha Jain, a BCG partner in New Delhi, who leads CCI in emerging markets.

China is leading other emerging-market countries in internet usage, with 20 percent of its retail sales already coming from e-commerce, the report said.

Even more dramatic in emerging markets will be the growth of digital influence—the effect of information that consumers collect online, often by smartphones, on their online and offline purchases.

By 2022, there will be $3.9 trillion in digitally influenced expenditures in emerging markets, BCG forecasts.

In particular, Chinese consumers make 70 percent of their online purchases through smartphones, a level of mobile commerce that sharply exceeds the level in developed countries. In 2016, Chinese mobile payments were nearly 50 times as great as those in the US.

"One lesson of this study is that emerging market consumers aren't uniform in their behaviors," said Jeff Walters, a BCG partner and CCI's leader in Greater China. "Different markets have distinct requirements. This is something any online seller would learn if it tried to enter China without appreciating the need to create a fun experience or if it tried to do business in parts of Asia or Africa without understanding the workings of cash on delivery."

BCG's report comes at a time when emerging markets are growing at three times the rate of developed markets and contributing much of the world's growth.

In the last two decades, emerging markets' share of the world's gross domestic product has risen from 11 percent to 28 percent, and their share of global household consumption expenditures has risen from 11 to 24 percent, according to the World Bank.