April 29, 2014
Over the past few months, I traveled to several different eCommerce- and retail-related conferences, including events in Brazil, China and Colombia. The eCommerce markets in these countries are wildly different, yet a few common themes emerged at the events, especially in relation to omnichannel:
Retailers aim to leapfrog with their omnichannel initiatives. In all three markets, there are a number of traditional retailers that are just launching or building out their eCommerce offerings. Given that these retailers are starting with a clean slate when it comes to digital initiatives, they are aiming to forego the siloed approach that many US and European retailers took when they launched eCommerce. Instead, as these retailers look to develop or expand their eCommerce initiatives, they seek to create integrated offerings across all of their channels that emulate best-in-class omnichannel offerings around the globe.
Integrated online/offline offerings are a priority everywhere even though competitive landscapes differ. A streamlined omnichannel experience remains the end goal in every market. However, there won’t be a single path to omnichannel excellence, as the nature of the competitive landscape differs in each market. Indeed, the role that traditional retailers play in eCommerce varies greatly: In China, for example, local offline retailers’ involvement in eCommerce remains limited, with only a handful of standouts ranking among the top eCommerce players. The omnichannel bar is therefore being raised by a number of global brands that are simultaneously opening retail stores and launching eCommerce offerings in the country. Additionally, web-only leaders like Alibaba are making online-to-offline a priority. By contrast, in Latin America – as in markets like the US and the UK – the list of leading eCommerce players includes a large number of traditional retailers as well as web-only players. In these types of markets, traditional local retailers are playing a key role in driving omnichannel initiatives.
Everyone is looking for the next big game-changer in eCommerce. In every fast-growing eCommerce market, there is debate over which new initiatives will disrupt the current state of the market and which developments will ultimately drive eCommerce forward. In Colombia and Mexico, for example, there is much discussion of which factors contributed to eCommerce success in Brazil and whether similar ones will propel market growth in other countries in the region (Brazil’s GDP is roughly twice the size of Mexico’s, but its online retail market is almost 7x larger). In China, as we mentioned in a previous post, the integration of eCommerce within the popular WeChat mobile app has caused many to debate whether the new offering will change the dynamics of the market given that it merges mobile messaging and eCommerce. While it is hard to upend an entire industry in a large, established market, the same is less true in earlier-stage markets: Countries in which eCommerce represents just a small percent of overall retail sales are often the most ripe for disruption.