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Despite Global E-commerce Growth, Emerging Markets Still Off-limits Due to Constraints

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E-commerce - Investors King

E-commerce growth is predicted to reach the pre-pandemic level by the end of this year. However, Fast-Growing and Emerging regions remain excluded from access to global e-commerce due to prevailing constraints on cross-border shopping. 

With global e-commerce sales predicted to reach $4.9 trillion by the end of this year, e-commerce has shaped new consumer habits when it comes to shopping preferences. Despite these predictions, e-commerce growth and accessibility in certain regions is still off-limits due to existing constraints that could be solved—with the right timing and approach.

In the first quarter of 2021, global e-commerce recorded $876 billion in sales—up 38% year-over-year, with predictions of a continued growth of 24.5% by 2025. Yet, the surge has not been as widespread as it would seem at a first glance. Huge numbers of the population in Fast-Growing and Emerging markets are unbanked—as many as 50% of Africans are still financially excluded, South and Central Americans following close behind with 38%. Because of this, certain regions are facing limitations when it comes to cross-border e-commerce.

Frank Breuss, CEO and co-founder of Nikulipe, a Fintech company creating and connecting Local Payment Methods to access Emerging and Fast-Growing Markets, points out that, while each Emerging Market has its own specific issues around cross-border payments, there are three main ones that stand out as most prevalent.

“Problems that are stifling growth in Fast-Growing and Emerging markets have been around for ages. Variety of payment cards, country-specific legislation and currency restrictions, as well as logistics are among the key issues hindering e-commerce growth. For example, while payment cards like Visa and Mastercard are widely available in North America or Western Europe, they’re not easily accessible in Fast-Growing and Emerging markets. Even if consumers have payment cards, these are often local ones, intended for domestic use only, meaning they cannot be used to purchase goods from international merchants.”

Breuss elaborates that the situation is similar with bank transfers. For those who have accounts with local banks, these financial institutions, in most cases, are not well-connected to the banking network internationally, making cross-border bank transfers very slow and expensive.

Country-specific legislations or the lack of them are also ongoing struggles for Fast-Growing and Emerging markets. Operational payment limits, where payment orders can be placed only on working days during certain hours, is something that Latin America deals with. Fragmented market is an ongoing headache for Africa—with over 40 different currencies and regulators, it poses hurdles to international merchants. According to Breuss, even if a consumer is able to purchase goods or services off an international website, the merchant might not have easy access to the payment itself.

Logistics issues like shipment restrictions or custom hold ups are another additional battle for many Emerging markets, adds Breuss. International merchants have to figure out ways to get goods to their clients in these regions in time, as well as overcome customs holdups, which add up to delays.

To help solve these issues for international Merchants and at the same time include as many consumers in global e-commerce as possible is not an easy task—it takes time, local know-how and perseverance, Breuss notes.

“A certain lack of clear regulations and laws in Emerging Markets up the complexity of introducing new solutions. First of all, it’s key to understand the markets and their nuances, in order to offer relevant local payment methods that are suitable for consumer needs in each market. Partnering up with reliable payment solutions providers could aid in handling money flow from Fast-Growing and Emerging markets back to the merchant.”

With issues like payment and card limitations as well as logistics, Fast-Growing and Emerging Markets are ripe for new solutions. Helping solve the long-lasting issues, could eventually draw exclusion from global e-commerce to a close. If consumers continue to show their wish to shop internationally, more merchants will try to find a solution to meet the demand—and consequently, bring more pressure on legislation to adopt the needed changes. Now, with the consumers in Emerging Markets doing exactly that, it seems to be the right time to start solving the complexities.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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E-commerce

Jumia Grabs Opportunity for Black Friday Deals

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Black friday

Black Friday is a concept that originated in the United States, but the yearly retail fever has had a popularity boom across Africa in recent years, with customers moving to take advantage of the best deals that retailers have available.

Jumia, which is a marketplace with its focus placed on Africa quickly grabbed this opportunity when it first introduced the Black Friday event about nine years ago across its markets in Africa, focusing mainly on Egypt and Cairo which are the company’s top two cities when considering volume of orders.

Since its inception, the company has witnessed staggering levels of success with the event, and company data reveals that the love which consumers have for Black Friday has been increasing across the continent every year.

During the 2020 Black Friday event, the top sellers on the Jumia platform saw a 141% year-on-year increase in the amount of items sold, with one out of three clicks on average being a new customer. The company also said that it witnessed an increase in brand appetite across every one of Jumia’s 10 markets during last year’s sale, which lasted every Friday in November.

The trend is expected to continue this year’s version of Jumia’s Black Friday, as it is running from November 5 until November 30.

The company which is based in Nigeria has entered into partnerships with major brands like Adidas, HP, Unilever and Diageo, as well as with thousands of sellers in order to provide consumers the best deals on a very wide range of products.

The CEO of Jumia Nigeria, Massimiliano Spalazzi told Lagos-based Vanguard that the Black Friday programme has been a success every year, and is the biggest sale of the year.

He also stated that the 2021 Black Friday campaign will place focus on strengthening the company’s position as a brand within the African market, and providing support to the sellers.

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France Requests Removal of Wish from Search Engines and App Stores

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Several ministers in France have released a common statement in which they announced that they have made a request to the main search engines as well as the mobile app stores that are operating in the country to hide Wish’s website as well as its mobile app.

Wish is a highly popular e-commerce platform that mainly references products from merchants who are based in China. The platform does not hold inventory as the products are usually shipped directly to the customers from merchants.

Last year, the French administration which is in charge of consumer rights and fraud launched an investigation into Wish. The administration, which is known as the direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) suspected that it was not difficult to deliberately mislead customers and sell fake products on Wish, including goods like perfumes and sneakers with images which incorrectly show the logos of popular brands.

In order to find out the safety of the products on Wish and to also test their suspicions, the French administration ordered about 140 different goods on Wish.

About 95% of the toys which they acquired on the platform did not abide by the normal European regulation, with about 45% of the toys deemed dangerous. Concerning the electronic products that were ordered, 95% of them were said to be disallowed in Europe, with 90% of them being dangerous in one form or the other.

Some unexpected items were even found to constitute a risk to customers, with about 62% of ordered cheap costume jewelry considered as dangerous. It should however be noted that these numbers came from a study on a small sample of 140 products.

When Wish is notified that a dangerous product is being sold on the platform, the product is removed within 24 hours. However, the French Ministry of Economy states that in most cases the dangerous products remain accessible on the same platform, under a different name and sometimes by the same seller.

The French government is now taking advantage of changes in European regulation to block problematic apps. The process is complicated, but if successful will remove Wish from Google and the App Store. Currently, Wish is still available on the app store and the website can still be found on Google.

After Wish is shadowbanned in France, the website will disappear from Google and the app will no longer be found on the app store. However, if you had it on your phone before the shadowban, you will still be able to use it.

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Jumia Black Friday: What People are Buying

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Jumia’s yearly flash sale event, Black Friday, is still ongoing. A lot of people are taking advantage of it to get for themselves valuable items at discounted prices.

Investors King had on Friday reported that Jumia has promised earth-shattering deals in this year’s Black Friday. The flash sales had started on the 5th of November 2021 with packages like Treasure Hunt, Friday Rush Hour, Flash Sales and Wheel of Fortune.

A visit to Jumia’s website reveals the series of offers for the Black Friday sales. Some of the offers include phone deals, fashion deals, Home and Appliances, Computing deals, Television and Audio, Exploring Trends, Health and Beauty deals among others.

It however appears that of all the items available in the store, the ones people are patronizing the more or the top deals are phones, power banks, earphones and phone accessories.

Specifically, under phone deals, there are products with discounts as high as 54 and 52 percent. The implication of which is the product with such percentage of discount selling out very fast to the fastest fingers.

As of the time of filing this report, a UMIDIGI A7S phone listed in the store is labelled to have a 54 percent discount. Similarly, a Gionee S12 (4GB RAM, 64GB ROM) is listed for N58,990 after a 21 percent discount has been removed.

Under the fashion deal, there is also a ‘men luxury diamond waterproof quartz watch with 90 percent discount among other products with their discounts ranging from 1 percent to 90 percent.

Investors king spoke with a few people in order to have their takes about the ongoing sales and what they would like to buy.

I am very excited about Black Friday. Who does not like cheap things? I will definitely get some items before Black Friday is over,” one person told us. When asked what he is planning on getting, he said is planning to get a Laptop computer.

Another person said he has been eyeing some items on Jumia since Black Friday started and he hopes to get them before it ends. When asked what those items were, his answer was a phone, earbud and a wireless keyboard.

A Banker in Ibadan also said that he has ordered a refrigerator at a 47 percent discount and he is now awaiting delivery.

Jumia Black Friday sales are expected to run until the 30th of November 2021. However, the main event is scheduled for the 26th of November 2021.

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