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Out for delivery. Photo: Issouf Sanogo/AFP/Getty Images

In several emerging markets, entrepreneurs are using the Amazon playbook to bring e-commerce to their own countries, but they're finding that demand for online shopping is expanding faster than the infrastructure needed to support it.

The big picture: Serving populations that tend to rely on cash and live in harder-to-reach areas, the online retailers of the developing world are searching for creative ways to grow — and keep the international giants at bay.

By the numbers: By 2020, the global e-commerce market is projected to hit $4.2 trillion, about double its size in 2016, according to eMarketer.

  • The regions driving the boom are Asia, Latin America and Africa. Asia's e-commerce market, led by India, is expected to grow 25% this year; Latin America, 21%; Middle East and Africa, 21%.
  • Yes, but: "All of these pockets have their own unique dynamics," says Andrew Lipsman, an analyst with eMarketer. And the players in these markets are investing millions — or even billions — to overcome infrastructure challenges.

In Africa, the dominant player is Jumia, a pan-African e-commerce platform which recently filed for an IPO as the continent's first tech unicorn. Since its founding, Jumia has added food delivery, flight and hotel bookings, and even a subscription service for free delivery called ... Prime.

  • The company has accrued about 4 million shoppers across Africa. It has a long runway ahead of it on a continent that now has 400 million internet users.
  • But one of the biggest hurdles Jumia faces in Africa is that many homes don't have traditional addresses. "[F]or example, if you say in a city in Africa, 'I live in the third street by the church with the blue door,' that’s the address," Jumia co-founder Sacha Poignonnec said in an interview with McKinsey.
  • To get around the issue, Jumia works with local courier partners, dubbed "co-pilots," reports the Washington Post. These partners tag along with drivers and get on the phone with individual shoppers to figure out where to deliver their goods.

In Russia, another emerging hotbed for e-commerce, the biggest online retailer is apparel company Wildberries, which has gotten ahead because it has invested billions in trucks and warehouses, says Fedor Virin of Data Insight, a research firm. Russia's Amazon equivalent is Ozon, a platform which sells everything.

  • Both firms have to work with cash. Around 40% of Russian e-commerce orders are still paid for in cash upon delivery, per Data Insight. Another 20% are paid for with cards upon delivery, while 40% are pre-paid.
  • Much of the population is uncomfortable with having packages left on doorsteps, so 75% of orders are collected at lockers or pick-up points, Virin says. Maintaining these facilities adds another cost.

India's population also relies heavily on cash. Nonetheless, it's the second fastest-growing market for e-commerce, behind Mexico.

  • Giants like Amazon, Walmart and Alibaba are making massive investments in homegrown firms like Flipkart and Reliance Retail — and betting the size of India's online shopping market will eventually rival that of China.
  • That's "still a ways off," says Lipsman.

What to watch: The world's burgeoning e-commerce giants may hope to become the next Amazon. They certainly hope their home markets become the next China.

  • Because China leapfrogged credit cards and went straight from cash to mobile payments, e-commerce has boomed there. It accounts for 30% of all retail, compared to the 10% in the U.S.
  • The rest of the developing world lags behind. But it's catching up.

Go deeper

17 mins ago - World

Former spy Steele defends controversial Trump Russia dossier

Former U.K. intelligence officer Christopher Steele arrives at the High Court in London in July 2020. Photo: Tolga Akmen/AFP via Getty Images

The author of the "Steele Dossier," containing unverified claims about former President Trump told ABC News he stands by his controversial report, according to excerpts from an upcoming documentary published Sunday.

Why it matters: Former U.K. intelligence officer Christopher Steele's dossier was used as part of former special counsel Robert Mueller's investigation into the Trump campaign's alleged links to Russia's government.

Ina Fried, author of Login
4 hours ago - Technology

Intel CEO sees making own chips as a matter of national security

Pat Gelsinger. Photo: Axios on HBO

Intel CEO Pat Gelsinger is putting the pressure on the U.S. government to help subsidize chip manufacturing, insisting the current reliance on plants in Taiwan and Korea as "geopolitically unstable."

Why it matters: There is bipartisan support for funding the domestic semiconductor industry, but Congress has yet to sign the check. The Senate has passed the CHIPS Act that includes $52 billion in semiconductor investment, but it has yet to pass the House.

Updated 4 hours ago - World

17 U.S. and Canadian missionaries kidnapped in Haiti

Haitian soldiers guard the public prosecutor's office in Port-au-Prince this month. Photo: Richard Pierrin/AFP via Getty Images

Children are among a group of 17 missionaries kidnapped in Port-au-Prince, Haiti, per a statement from Christian Aid Ministries Sunday.

The latest: "The group of 16 U.S citizens and one Canadian citizen includes five men, seven women, and five children," the Ohio-based group said. Haitian police inspector Frantz Champagne on Sunday identified the 400 Mawozo gang as the group responsible, in a statement to AP.

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