How are ecommerce leaders handling a more tech-savvy and price-conscious consumer base?
Marketplaces like Amazon are competitive by nature, and they’re getting smarter every minute. Amazon understands their target audience -- they know consumers are constantly searching for the cheapest price, and are now able to use algorithms for promoting their own products over cheaper options, despite what is ‘truly’ cheaper. According to an article published by ProPublica, after researching 250 products on Amazon, an average price difference of $7.88 was found between suggested products by Amazon and the ‘truly’ cheapest products.
Amazon isn’t the only market behemoth leveraging their technological monopoly to increase profits. In June of 2017, Google was fined 2.4 billion euros by the European Commission for using its ‘dominance as a search engine’ as a mechanism for bolstering their ‘Google Shopping’ product/price comparison tool, which relies heavily on traffic to generate revenue and attract retailers. Leaders in the global ecommerce market are fully aware that consumers pay close attention to price above all else, and they’re using algorithms to convince consumers they are purchasing the cheapest option.
It’s obvious that the vast majority of SMEs do not have the same resources available to them, however they can improve their awareness and understanding of consumer behaviors and expectations, as well as determine the best potential ecommerce markets for their business. Using the 2017 Global Ecommerce Report will help SMEs by revealing countries with the highest potential for successful ecommerce aspirations. Focusing specifically on the infrastructure of key ecommerce markets around the world, SMEs will know the market before they even arrive.
For example, the report shows that the UK is leading regarding Internet penetration with 97.52% followed by South Korea with 95.21% and Australia with 92.44%. Additionally, both the United Kingdom and South Korea feature a spot on the top 5 list for Internet inclusivity, which is rated based on Internet availability, affordability, relevance, and readiness. The report also highlights the Ease of Doing Business Index ranking for the countries covered in the report, which ranks economies based on their regulatory environment conduciveness for business operations; interestingly, the top three are South Korea (5th), the United Kingdom (7th), and Australia (15th).
The report reveals the ecommerce share of GDP (E-GDP) for all the countries covered, and the top five list includes the United Kingdom with 7.9% and South Korea with 2.9%. Quite unexpectedly, Australia is leading in ecommerce growth, with a forecasted growth rate of 40% for 2017. By understanding the tools available and being currently used by big companies, SMEs will be more equipped to face the challenges they face with massive marketplaces monopolizing the global ecommerce market. Do your research, know your consumers, know your market, and you're on the road to success.