A look at the attractive business opportunities in developing countries.
The overall global economy has drastically changed with the introduction of new tools through technology. Online businesses have expanded and no longer remain bound to geographical borders. New opportunities and revenue streams can be found with sectors like online eCommerce. Developing countries have become an emerging market for new online business opportunities.
In this article, we explore the potential of scaling your online business opportunities to developing countries. We also look at the advantages for expanding your business operations to developing countries for leveraging their user-base.
Online Business Opportunities in Developing Nations
The expansion of an online business has become favorable in developing countries. The growing use of smartphones and the internet has led to an increasing user base in developing nations. Recent research reveals that global eCommerce reached $25.6 trillion, of which developing nations accounted for half of the top economies for B2C sales. Furthermore, the share of cross-border customers has increased since 2017.
Let’s look at the factors that facilitate scaling your business to developing countries.
1. Growing Smartphone Users
Smartphone users are rising at a rapid scale in developing nations like India. A report suggests that India’s smartphone base is estimated to reach 820 million by 2022. Indonesia is one of the world’s largest smartphone markets, which is expected to reach 256 million smartphone users by 2025. Moreover, these markets are strategically shifting towards online methods for different needs including banking.
2. Internet Penetration
Online business opportunities in developing countries have significantly increased due to the rise in internet penetration among its user base. Countries like India, Pakistan, and Indonesia have witnessed an increase in the number of internet users. Moreover, the growth in infrastructure by telecom companies have further led to a subsequent rise in the internet-users.
For instance, the internet user penetration rate which stands at 94% in 2020 is expected to increase to 97.5% by 2025. Another developing nation India already holds the world’s second-largest internet population at over 483 million users in 2018. This figure is estimated to reach nearly 500 million by 2023.
3. Rising Opportunities
About half of the global online sales originate from consumers belonging to developing countries. The customer base accessing online business or eCommerce has significantly increased in the last few years. For instance, it is estimated that India's eCommerce sector will reach US$99 billion by 2024 from US$30 billion in 2019, expanding at a 27% CAGR.
In the Philippines, eCommerce sector is expected to grow from $3 billion in 2019 to more than $12 billion in 2025. The country also holds more than 73 million Filipinos as registered internet users. Another developing nation Thailand also holds a growing number of users driven towards eCommerce. With an increase of 38%, the Thai eCommerce market contributed to the worldwide growth rate of 17% in 2019.
4. Trade Infrastructure
The supply chain trade infrastructure has expanded significantly in the last few years. The dynamic supply chains facilitate the expansion of one's business operations on a global scale. It has become relatively easy to export your goods to different countries and cater to international demand.
Payment Solutions for Expanding Online Business Opportunities
Smartphones and information infrastructure are the two trends that have commonly been observed in developing nations. This has led to innovative payment solutions that facilitate cross-border transfers. However, concerns for high transfer fees and longer duration for settlements persist even today.
XanPay has introduced a payment infrastructure that facilitates scaling of your business to developing countries without the typical hassles. XanPay enables a payment solution that allows you to cater to countries like India, Pakistan, Malaysia, Philippines, Thailand, and more. Additionally, it will enable you to offer a customized experience to your customers by enabling common local payment methods. For instance, your customer can pay in Rupee (India's fiat currency) with a local payment method such as UPI.
Furthermore, XanPay facilitates a simple process for onboarding and integrating its system into your current infrastructure. Once integrated, you can take advantage of its features like fast and cost-effective cross-border transfers. With XanPay, you incur a transaction fee of 1.99% as compared to the industry standards ranging anywhere between 5-9%.
Integrating tools like XanPay enables you to scale online business opportunities to other countries. It allows you to leverage the diverse customer base from developing countries without developing an extensive infrastructure for payments.
Developing countries certainly represent a fair share of the market for nearly any product or service. Moreover, the pandemic has escalated the need for the necessary infrastructure that easily caters to global markets. These countries with a diverse population hold unprecedented opportunities for B2C businesses.
Furthermore, this would help you scale your business to a new market with emerging demand. To know more about how to scale your business to international markets, refer to this blog article.