A revolution in online shopping is shaking up the retail sector and boosting national economies, and it hasn’t even got its boots on yet.

Global addressing system, what3words, is enabling e-commerce companies worldwide to scale up their offerings, at home and overseas. Here’s our view on the e-commerce landscape and where it’s heading.

Money mattersIn developing countries, consumers often don’t have access to, or don’t trust banks and are wary of giving out financial details. Many retailers like Flipkart resolve this by accepting cash on delivery. But this slows down delivery, costs the retailer, and affects their cash flow.

A better solution, Kenya’s successful mobile payment system M-PESA lets people pay for goods using accounts linked to their phones, instead of banks. Similar popular systems include Alibaba’s payment wallet Alipay, and South African MTN money.

New markets requirenew thinking

Mobile walletsbeat banks

Hungry new markets3.5 billion people worldwide now have internet access, and this number is rising fast as smartphone ownership increases, particularly in the developing world where disposable incomes are also increasing. The result is vast new markets of consumers eager to shop online.

Local e-commerce companies currently dominate these markets. India’s online marketplace Flipkart has a 43% market share and over 100 million users. China’s e-commerce giant, Alibaba, has over 430 million. Each market presents its own intricacies and challenges, meaning local knowledge is keeping them one step ahead of global players, for the time being.

Obstacles to successDespite high usage numbers, in many countries e-commerce sales are still small for the market size. Even success stories like Flipkart are reportedly struggling to turn sales into profit.

In the US and Europe, online shopping developed by piggybacking on dependable banks and reliable delivery infrastructure. When these are lacking, innovative solutions are needed to ‘leapfrog’ inadequate local systems, particularly surrounding payment and delivery.

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Unlocking the potential of e-commerce

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*Internet Users Worldwide

* Bank of America Merrill Lynch report, 2016 * Statista, 2016* Internet Live Stats

By 2020 the cross-border e-commerce market will reach

International opportunitiesE-commerce companies looking to expand internationally find that payment and delivery issues are further complicated by differing local systems, and added to by legal restrictions. As a result, cross-border e-commerce remains limited, with only 35% of consumers globally shopping on sites based outside of their home country.

Consumers increasingly want to shop internationally to access a greater variety of products and better prices. Universal solutions that work across borders, such as what3words, mean that specific local knowledge is no longer essential, opening local markets up to global players and fuelling cross-border trade.

The future is on-demandWith the rise of on-demand services, those who make paying for and receiving goods fast and easy will win out. Precise delivery windows and delivery on the move will dominate, helped by more precise addressing and innovation such as drone delivery.

The full, exciting potential of online trade is yet to be unlocked. By 2020, it is predicted that the cross-border e-commerce market will reach $1 trillion, boosting national and international economies alike. Businesses and governments who work to improve the conditions for e-commerce now, will reap the rewards in the future.

Delivery headaches75% of the world suffers from poor addressing, or none at all. The other 25% still lacks universal address coverage, making deliveries frustrating, expensive and inefficient. Globally, the last mile of a parcel’s journey reaches or exceeds 50% of the total parcel delivery cost.

To cut these costs, companies must find ways to leapfrog poor local addressing systems entirely. One solution, what3words, is a global addressing system that has divided the world into a grid of 3m x 3m squares, each with a unique 3 word address. This could allow someone in Calcutta, for example, without a street address, to use ‘bigger.comet.tightrope’ to specify the exact location of their front door.

of consumersshop globally

Market penetration & sales

35%

31% South AfricaUSD $361.9 million

India12%USD $14.9 billion

73% UKUSD $113.7 billion

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* PFSweb ‘Online retail cross-border sales’, 2015 * Accenture and AliResearch report, 2015* The Future of the Last Mile’ by McKinsey, 2016

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of delivery costs are incurred in the last mile.

How can I learn more?

what3words.com/delivery-ecommerce

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