How International E-commerce Companies Have Changed the Global Economy
E-commerce is one of the technological megatrends that have driven economic growth over the past decade. Especially now, as a result of the pandemic, online retailers have had a major boost, with e-commerce revenues going through the roof. As a result, the stock prices of e-commerce giants like Amazon are trading near all-time highs.
The development of international e-commerce has changed the global economy in many ways, which will continue to do so over the years. Here are five ways e-commerce is becoming a key disruptor:
- Value Matters More than Location
Before the internet, consumers mostly bought what they could find in their surroundings. Choice was limited to what was available offline. Now, in the age of e-commerce, consumers can order items from almost anywhere in the world, meaning they have many more options in terms of quality and price.
This transition to technology has also increased competition amongst retailers. Instead of competing only locally, even SMEs now face international competition and have to ensure they offer the best product at a competitive price, very much to the advantage of the consumer.
- Larger Markets
Businesses can now relatively easily tap into global markets and leverage their advantages. Perhaps a company sells a product that is only available in their area; Now, they can sell it anywhere in the world via the internet. Furthermore, because labor costs less in developing countries, e-commerce companies can use this advantage to sell customized products to consumers in developed markets – a win-win situation for both consumers and businesses.
- Multichannel Marketing
E-commerce also enables completely new marketing channels, making it easier for companies to reach out globally, establish customer relationships across the world, and use various multichannel marketing strategies. International e-commerce companies can reach a wide audience not only because they can market internationally but also because they can use the entire arsenal of digital marketing tools.
- A Push for Innovation
E-commerce has also made business much harder for companies that aren’t innovative enough to keep up. Stationery retail stores have much higher costs and much less outreach, making it almost impossible for them to keep competing with the online competition in the long run. That is unless they have a truly compelling offer that entices people to visit their store, such as excellent customer service.
- Global Connections
E-commerce has brought the world closer together. It has enabled people to experience the world through interacting with global companies and consuming goods that aren’t available in their area. Of course, that brings new challenges as well, for example, international taxation. However, the bottom-line of people from different cultures communicating and trading with each other is definitely positive.
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