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Where’s the last pocket of new growth?


March 24, 2023

Capturing growth from digital-first consumers requires very different commerce strategies and operations

Driving growth is an exhaustive fight for market share across most consumer-focused industries. With the explosion of digital channels, companies are paying more to sell to the same customers. So it’s no surprise that I’m often asked where the next wave of new growth in commerce will come from.

The last frontier for new growth

Our latest research study reveals the last pocket of net-new growth in commerce.

One billion new consumers will emerge in Bangladesh, Egypt, Ethiopia, India, Indonesia, Kenya, Nigeria and the Philippines over the next decade.

The emergence of these new consumers isn’t only relevant to companies that operate in these countries today. It’s tremendously relevant for multinationals that want to grow their footprints and balance their global portfolios. However, strategies based on the western model of consumerism—the steady evolution from brick-and-mortar to digital commerce models that happens over decades—won’t work for these consumers.

A leapfrog, not an evolution

Why do companies need a different strategy?

Common wisdom among established multinationals says that these consumers will follow the same path that consumers in different regions and times have before. This simply isn’t true. The tired stereotypes about mom-and-pop shops don’t hold. Instead, these one billion consumers are way ahead of us all. They are digital first. They will never have the option to be consumers in the traditional, analogue way. Even those who didn’t grow up digital will be influenced by their kids’ purchasing decisions.

Given how pervasive digital technology is today, these consumers will go straight to digital archetypes, “leapfrogging” the phases of the western model of consumerism. These leaps are already happening. For example, many fast-growing countries bypassed landlines and went straight to mobile services. The same thing is happening with digital payments technology, which is extending access to secure payment mechanisms.

The leapfrogging will look different in every industry. Why invest in supermarkets when digital is more efficient and there is a lower barrier to entry? Why build movie theaters if it’s a convenient and positive experience for people to stream movies at home? Why build bank branches and insurance offices that are becoming less common in western cities because services are available online? And how many physician offices are necessary when telemedicine is an option for treating many acute conditions?

Even the term “online” itself will become irrelevant. PCs and laptops were part of the evolutionary path to digital in the western model. But these countries will go straight to mobile.

What winners do differently

These new consumers are coming. Already, digital commerce revenues have quadrupled in these countries since 2017. There’s little to no digital competition for business among most consumer-facing companies in these countries. Brand loyalty is also very strong. And we know that consumers can be loyal to first brands for life. Even generations.

This isn’t to say there aren’t barriers to gaining digital commerce traction in these areas. Last-mile delivery logistics are particularly challenging. Companies will also have to overcome lack of access to finance and payments and cultivate awareness among target customers.

The reality is that today most multinationals aren’t on track to serve these digital-first consumers. Replicating yesterday’s model isn’t the answer. Winning here is about being as digital on the inside as on the outside. Agility is a big part of this. So is seeing people before customers, having a life-centric approach to connecting with customers. It’s also key to develop a data-powered operating model and have the courage for continuous change at scale.

Think of all this as having the capacity for continuous, dynamic reinvention. We call this Total Enterprise Reinvention. It’s a deliberate strategy that’s centered around a strong digital core. And it requires new skills and an increased depth of understanding of technology, change management, communication and how to work with partners to achieve results faster.

Don’t wait to take action

I realize that companies are struggling with navigating all the change and unpredictability that exists today. With this one-billion-strong customer base several years away, you might think that reinvention isn’t a priority. Don’t make this mistake. The very fact that change is constant reinforces how critical it is to build more agility and scalability into your commerce operations. This is non-negotiable for growth.

So start now. Ensure that your digital commerce strategy is in lock step with your growth strategy. Build a secure data and cloud-enabled analytics foundation. Develop a digital commerce ecosystem that scales to support omnichannel purchasing. Create efficient digital commerce operations to perform at speed and scale by investing in the right technology and talent.

Growth is there for the taking

For years, companies have been seeking out the very growth potential that these one billion new consumers offer. One billion new connections that can drive new growth are there for the taking—if companies shift their mindsets and disrupt themselves to strengthen their digital commerce operations.


Fabio Vacirca

Global Lead, Commerce