The digital economy is on the rise in developing countries, and it is reshaping the global market landscape. With the increasing adoption of online payments, transfers, and other alternative payment methods, emerging economies like Brazil, India, Kenya, and Nigeria are making significant contributions. This groundbreaking revelation comes from the latest Beyond Borders report by EBANX.
According to EBANX, the digital markets in Latin America and Africa are projected to exceed a combined value of $1 trillion by 2026. Additionally, India alone is expected to reach over $275 billion in digital market value. It is the young and expanding populations of countries like India, Africa, and Latin America that are propelling the surge in consumer numbers, fueling the growth of e-commerce markets.
Statistics indicate that online commerce is growing at a faster pace in developing countries compared to more stabilized markets such as the United States or Europe. More than half of the population in these nations already utilizes digital payments, a clear demonstration of their vital role in economic development and access to products.
“The main driving factor behind this remarkable growth is demographics. Developing economies boast young and expanding populations, distinguishing them from more developed regions. The combination of demographics and economic growth further propels the process of digitalization,” emphasizes Paula Bellizia, Global Payments President at EBANX.
Latin America, known for its robust e-commerce market, is expected to double its market value by 2026. Promising investment prospects await in countries like Mexico, Colombia, and Peru, which experience an annual growth rate of around 30%. It’s also worth noting the untapped potential in Central American and Caribbean countries, where a 20% growth rate is anticipated within the same period.
India, as the second-largest e-commerce market globally, holds tremendous promise. With a population exceeding 350 million, India already dominates the online commerce landscape with a value surpassing $184 billion. However, it is important to recognize that online sales penetration in India is only at 33%, signaling significant untapped potential in this flourishing market.
Africa is steadily emerging as a crucial region for trade and digital payments. After witnessing a surge in digital payment adoption, increasing its share from 23% to 46%, the continent is now embarking on the next phase of growth – e-commerce. This growth is bolstered by the rising number of mobile phone users and the prevalence of local alternative payment methods.
While alternative payment methods play a vital role in the digital economy, card payments still hold substantial significance. Credit and debit cards contribute to 51% of Brazil’s digital trade value, 66% in Mexico, and a staggering 75% in Chile. Even in African countries like Morocco and Nigeria, card payments represent 42% and 36% of the value of online transactions, respectively. Hence, developing markets must prioritize payment strategies that cater to both card payments and alternative payment methods, granting customers the freedom to choose their preferred payment option.
Furthermore, EBANX’s Beyond Borders report unveils a new realm of growth in the payment industry – B2B payments. More companies around the world are conducting online business transactions with other enterprises. Developing markets like Brazil, Colombia, and Kenya demonstrate a higher proportion of B2B transactions compared to the global average. The value of B2B payments is forecasted to rise by 2027, with Latin America, Africa, and the Asia-Pacific region contributing 40% to this surge.
The insights from EBANX’s Beyond Borders report illuminate the immense growth potential in e-commerce and payments within developing markets. Consequently, it is imperative to pay close attention to these markets and formulate investment strategies specifically tailored to these regions.
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The source of the article is from the blog papodemusica.com