Reaching customers other e-tailers can’t
But the percentage of the population with access can vary greatly across the globe. In a recent study by Internet Live Stats, Iceland tops the table, with 100% of its population having access, whilst Eritrea sits at the bottom with just 1.1%.
The opportunity presented by increased Internet access is huge, with over 4 billion people (54%) currently “internet-less”. In some countries, the volume of untapped market is astonishing: in China, despite it being one of the biggest online markets in the world there are 661 million without internet access; India has 851 million, and even developed markets, such as Russia, have 41 million residents who can’t access the internet.
Many governments are investing heavily to ensure their population can have access. In the UK, for example, the government has set a target of getting superfast broadband to 95% of the population by the end of 2017.
And it’s not just government investment that’s driving access – Facebook are currently testing drones which can beam the internet via lasers to underserved areas.
So – if more people in remote locations are able to shop online, what opportunities does this offer e-tailers, and what are the challenges? Let’s take a look at a few …
1. Be first to build a relationship
Alibaba Group, one of China’s biggest eCommerce players, already invests heavily in “rural eCommerce”. It’s opened rural hubs and recruited locals to teach villagers how to browse and shop online. Alibaba aren’t sure when their rural operations will become profitable (only 1/10th of purchases made on their platform were shipped to rural locations in the first quarter of this year) but they estimate the potential market to be worth 460 billion yuan ($74 billion) by next year.
2. Research the market
At Worldpay, we’re constantly researching cultural trends around preferred payment methods (See our latest research: ‘Why Do They Pay That Way?’ http://paythatway.worldpay.com). And we’ve found offering the right payment methods is essential to maximising sales in each country.
But when it comes to “rural eCommerce” it’s vital you understand the regional differences of each country. It’s likely that rural customers, with recent internet access, are less tech-evolved online shoppers than their urban counterparts. They may not have smartphones, for example, so e-wallets may not be an option for them.
Think about how easy it is to navigate through your website. Is your checkout process easy to follow for someone purchasing online for the first time? Is the payment process clearly signposted?
And even think about the products you offer. Are they suitable for rural customers as well? Or should you look to extend your product range to attract this market?
3. Think logistics!
We all know that consumers are becoming more demanding. They want more choice, and retailers who can offer this reap the benefits. And when it comes to delivery – customers are just as picky. Recent research showed that 36% of retailers believe offering multiple delivery choices leads to increased sales.
Whether it’s Click-and-Collect, Next Day delivery, 1-hour delivery slots or Free Delivery for orders over a specific amount, today’s online shoppers are faced with a lot of choice. But when it comes to “rural eCommerce”, e-tailers need to think through their offerings. Some might just not be viable for the customer (Click-and-Collect for example), whereas some may be too expensive or a logistical headache for the retailer.
One solution could be to provide delivery options (and costs) once the purchaser has provided their address; however, our research has shown that not providing upfront delivery costs can lead to increased shopping cart abandonment.
Another question: Do you swallow the additional costs associated with rural deliveries or pass this on to the customer? As mentioned before, it’s likely that rural customers will be less savvy, so e-tailers could potentially offer less choice to these customers initially.
It’s also key that you involve your logistics partners in any decisions. It’s no good offering next day delivery if they simply can’t fulfil that in more remote locations.
Overall, it’s a really exciting time for online retailers. As more and more people get access to the internet, it’s opening up new opportunities in existing markets. The key is to ensure you have a strategy in place now, so you can move quickly when the time is right.