We’re now in the midst of a tectonic shift in the global digital economy
Unprecedented investment in third world digital infrastructure
In 2014, FB’s Mark Zuckerberg bought WhatsApp (a minimal fee messaging service) with the objective of getting in at the ground level one of the greatest entrepreneurial opportunities of all time. He exemplifies the broad movement among American and European tech giant leaders now working to introduce the Internet to the 5 billion people on the planet who are not yet online.
The digital economy is no longer growing fastest in the richest nations
We’re now in the midst of a tectonic shift in the global digital economy. At the end of 2014, the seven biggest emerging markets were already larger than that of G7 economies of Canada, France, Germany, Great Britain, Italy, Japan, and the United States combined. In addition, Asia-Pacific region consumers are now spending more online than North American consumers.
A standout player in this revolution is the German company, Rocket Internet—with the stated mission of becoming the world’s largest e-commerce Internet platform outside of China and the U.S. They are facing competition from other emerging competitors aspiring to become new global Alibabas and Amazons. They include Jumia, which operates in Africa; Namshi in the Middle East; Lazada and Zalora in Southeast Asia; Jabong in India; and, finally, Kaymu in 33 markets across Africa, Asia, Europe, and the Middle East.
Even in cash transaction-based economies like India, Indonesia and Columbia, billions of dollars are being invested in e-commerce. But how can e-commerce work in societies where credit cards and PayPal are rarely used? Corporations like Amazon are deftly working with and around cash-based transactions in those countries, ready to quickly move forward when their consumers are able to pay for products online.
Where is all this taking us? Potential investors need to understand that the next several billion consumers coming online will be making their purchase decisions via mobile devices. This presents a significantly different dynamic from how the first billion consumers began making e-commerce purchases. —The key to success in this new business paradigm is cross-cultural savvy combined with the IT skills to make it all come together. As the rest of the world catches up with the Europe and the U.S, Western tech giants like FB, Amazon and Google will be able to expand into new markets and product areas while helping to adapt to and create a new International business culture.
At a micro level, we at OWDT have experienced the benefits of a multi-cultural team. Similarly, Internet giants in the years ahead will need that kind of diversity of experience and creativity to customize their strategies for the complex global market—one that will continue to operate at different speeds, with different institutional and other constraints from country to country.