SOURCE: A.T. Kearney

A.T. Kearney

November 18, 2013 10:00 ET

China Tops A.T. Kearney Global Retail E-Commerce Index for Market Opportunity; India Fails to Rank Due to Infrastructure Issues

e-Commerce Is Increasingly Viewed by Retailers as an Efficient and Effective Global Expansion Vehicle

CHICAGO, IL--(Marketwired - Nov 18, 2013) -  The A.T. Kearney Global Retail E-Commerce Index™ includes a combination of 30 developed and developing markets with China occupying the top position, and the G8 countries (Japan, United States, United Kingdom, Germany, France, Canada, Russia and Italy) all within the top 15.

Developing countries feature prominently in the Index, holding 10 of the 30 positions. Many developing markets have been able to shortcut the traditional online retail maturity curve as online retail grows at the same time as physical retail becomes more organized. E-Commerce is increasingly viewed by retailers as an efficient and effective global expansion vehicle.

Mike Moriarty, A.T. Kearney partner and co-author of the study, noted, "Consumers in developing markets are fast adopting behaviors similar to those in more developed countries. For example, mobile phones per capita in Russia (1.8) and the United Arab Emirates (1.7) are much higher than many developed markets, including the United States (1.0) and France (1.0). Consumers in these countries use their phones to research products, compare prices and seek input from their friends on social media."

The Index ranking also includes 10 "small gems" -- countries with populations of less than 10 million, including Singapore, Hong Kong, Slovakia, New Zealand, Finland, United Arab Emirates, Norway, Ireland, Denmark and Switzerland -- that have active online consumers and sufficient infrastructure to support online retail. Because of the investment profile required for global retailers or pure-play e-tailers, these small gems can be powerful online retail markets.

Globally over the past five years, online retail has grown at a 17 percent CAGR, with growth particularly strong in Latin America (27 percent) and Asia Pacific (25 percent).

The Global Retail E-Commerce Index is the only truly global study that ranks the top countries in online retail, based on a 0-to-100-point scale. A.T. Kearney looked at 186 countries to determine the ranking of the top 30 countries. The Index evaluates countries across four dimensions and nine variables and ranks the retail e-Commerce attractiveness for each country.

Global Retail E-Commerce Index Results
While there are some obvious differences between developing and developed markets, the study highlights some key similarities such as consumer sophistication, the creativity and ingenuity of online sellers, fierce competition, and the types of products consumers will buy online.

Hana Ben-Shabat, A.T. Kearney partner and co-author of the study commented, "Understanding these similarities will enable retailers to devise online strategies that are effective and scalable."

Mobile is becoming a critical e-Commerce enabler. Ninety-three percent of mobile phone owners in Brazil and 51 percent in the United Kingdom use their devices to learn about retail offerings.

Social Media is another factor that is having a major impact, but in different ways. Developing markets such as China encourage shoppers to write post-purchase reviews in exchange for loyalty points or online coupons. In developed markets, online retailers such as Amazon mine purchase reviews for insights on products, instruction manuals, and supply chain hiccups.

When the A.T. Kearney team did the data analysis and the on-the-ground interviews, they confirmed that there are three very distinct kinds of retail e-Commerce markets - Next Generation, Established and Growing, and Digital DNA

China, Brazil, and Russia lead the Next Generation Markets, with Argentina, Italy, Slovakia, Chile, Turkey, Venezuela, UAE, Ireland and Malaysia completing the group. Consumer online practices are well developed, but each of these markets lacks one of the big three capabilities -- Internet accessibility, logistical infrastructure, or financial systems. Developing these capabilities (as each of these markets is working hard to do) will quickly make these countries critical e-Commerce targets for global retailers.

Australia, Canada, the United States, and Nordic and Western European countries are Established and Growing Markets. All these markets have high Internet penetration and use, but logistics and last-mile strategies make the first three (Australia, Canada, and the U.S.) higher-growth opportunities than the Nordic and Western European markets. There is still considerable room for growth in these markets.

Parvaneh Nilforoushan, A.T. Kearney consultant and study co-author noted, "Moving forward, success in the Established and Growing markets will depend on innovation across all the customer touch points, better insight into why consumers buy online versus other channels, and clarity as to what customers' expectations are from pre-purchase to delivery."

Japan, South Korea, Singapore, Hong Kong, and New Zealand are Digital DNA markets, with high technology adoption rates, advanced infrastructures, and a track record of innovative, new ways of shopping online. Growth may be slower, but these consumers understand online retail. New entrants will have to be sophisticated, with exciting online offers, new omnichannel experiences, and innovative last-mile strategies. 

The 2013 Global Retail E-Commerce Index Ranking

Index Rank Country Market Type
  1   China Next Generation
  2   Japan Digital DNA
  3   United States Established & Growing
  4   United Kingdom Established & Growing
  5   Korea, South Digital DNA
  6   Germany Established & Growing
  7   France Established & Growing
  8   Brazil Next Generation
  9   Australia Established & Growing
  10   Canada Established & Growing
  11   Singapore Digital DNA
  12   Argentina Next Generation
  13   Russia Next Generation
  14   Hong Kong Digital DNA
  15   Italy Next Generation
  16   Sweden Established & Growing
  17   Slovakia Next Generation
  18   New Zealand Digital DNA
  19   Netherlands Established & Growing
  20   Chile Next Generation
  21   Finland Established & Growing
  22   Turkey Next Generation
  23   Venezuela Next Generation
  24   Belgium Established & Growing
  25   United Arab Emirates Next Generation
  26   Norway Established & Growing
  27   Ireland Next Generation
  28   Denmark Established & Growing
  29   Switzerland Established & Growing
  30   Malaysia Next Generation

To read the full 2013 Global Retail E-Commerce Report, please go to:

About the Study
A.T. Kearney's Global Retail E-Commerce Index ranks the top countries in online retail, based on a 0-to-100-point scale. The higher the ranking, the more near-term ROI potential a country has in online retail. Online retail is defined as the sale of consumer goods to the general public through websites operated by pure-play online retailers or store-based retailers. This term also includes mobile commerce sales through smartphones or tablets. Sales are attributed to the country where the purchase is made, not where retailers are located. Countries in the Index are evaluated across four key dimensions - Online Market Size (40 percent), Consumer Behavior (20 percent), Infrastructure (20 percent) and Growth Potential (20 percent).

About A.T. Kearney
A.T. Kearney is a global team of forward-thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results. Since 1926, we have been trusted advisors on the most mission-critical issues to the world's leading organizations across all major industries and service sectors. A.T. Kearney has 58 offices located in major business centers across 40 countries.

About the A.T. Kearney Global Consumer Institute
The A.T. Kearney Global Consumer Institute is a worldwide network of professionals and executives. The Institute combines proprietary and public data resources with local knowledge to deliver strategic and operational insights to executives in consumer-facing industries seeking long-term growth and competitive advantage. For more information, please contact

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