Developing economies to account for nearly 40 percent of B2C ecommerce by 2018

These are the findings of The Information Economy Report 2015, subtitled “Unlocking the Potential of E-commerce for Developing Countries”, which was released on 24 March 2015 by UNCTAD, the United Nations body responsible for dealing with development issues, particularly international trade – the main driver of development.

In 2013, global B2C ecommerce was valued at about USD 1.2 trillion. While considerably smaller than business-to-business (B2B) ecommerce, valued at more than USD 15 trillion, this segment is growing faster, especially in Asia and Africa.

The report also indicates that China has emerged as the largest global market for B2C ecommerce, taking into account both online buyers and revenue. Between 2013 and 2018, the share of the Asia and Oceania region in global B2C ecommerce is expected to jump from 28% to 37%, while that of the Middle East and Africa is set to slightly increase from 2.2% to 2.5%.

The extent to which people buy online still varies greatly. The share of individuals who have made an online purchase was for example only 2% in Mexico and Thailand, and over 60% in some developed countries. Unlike social networking, where activity rates are relatively high among developing countries, the share of internet users who buy online is generally lower there than in developed countries. This may reflect limited purchasing power and other mitigating factors such as a lack of trust, limited shopping options and poor delivery services.

According to the UNCTAD B2C E-commerce Index included in the study, the highest ecommerce readiness is found in Luxembourg, Norway and Finland. Among developing and emerging economies, the front-runners are all in East Asia, namely the Republic of Korea, Hong Kong (China) and Singapore. Meanwhile, in terms of actual levels of online shopping, countries with large populations – such as Brazil, China and the Russian Federation – are performing better than predicted, suggesting that large markets facilitate ecommerce.

In order to unlock the potential of ecommerce, the UNCTAD report calls for policies that can help harness ecommerce for sustainable development. Key policy areas include the development of information and communications technology infrastructure, logistics and trade facilitation, the legal and regulatory environment, e-payments, and platform and skills development in combination with an enabling international environment.