China narrowly beats out Brazil as the developing market with the most near-term potential in the e-commerce sector, according to [pdf] a study released in June 2012 by A.T. Kearney. Constructing its e-commerce index based on 18 infrastructure, regulatory, and retail-specific variables, the study finds China (78) and Brazil (77) to be the clear leaders, ahead of Russia (60) and Chile (59). Mexico and the United Arab Emirates (UAE) are tied for the 5th spot with an index score of 50, slightly ahead of Malaysia (48). Rounding out the top 10 are Uruguay (45), Turkey (43), and Oman (41).
Optimism Abounds for China
China’s top ranking echoes December 2011 findings from Translated, which actually forecast China’s online sales potential to surpass that of the US by 2015. This optimism is unsurprising given recent research into the country’s consumer and online spending growth. For example, a previous A.T. Kearney report released in May 2012 projected that China will contribute 19% of the $12 trillion in global consumer spending growth over this decade. And per a WorldPay study from April, 63% of consumers in China report spending more online since the start of the global recession, compared to just 5% who say they spend less, with this net growth of 58% points far outpacing the nearest country, India (+30% points).
China Tops for Online Market Attractiveness
Indeed, according to the most recent A.T.Kearney report, China tops the online market attractiveness component of the index – which measures online retail sales, projected sales growth, and various online behavioral indicators – with a perfect score of 100 on a 100-point scale. Brazil (84) and Russia (83) are the next-highest scorers in this component, with Mexico (53) trailing distantly. No other country scored above 35 in this regard. This particular component made up 50% of the total index score.
Brazil narrowed its overall index score with China by virtue of its retail development component score, which was worth 15% of the overall index. In this particular component, Brazil was given a rating of 90 on the 100-point scale, while China only had a score of 58. Even so, Uruguay led the 10 developing markets in this component with a perfect 100-point score. The retail development component measures retail sales per capita and modern retail development indicators (including online and brick-and-mortal retail).
- The UAE (100) took the top score in the online infrastructure establishment component, meaning that is has the most developed technological, financial, and logistical infrastructure. Malaysia (78) and Turkey (76) were next.
- Chile (100) and Oman (97) led in the digital laws and regulations component, which measures digital environment, trade regulations, and internet censorship. Russia (23) had the lowest score in this component.
About the Data: A.T. Kearney’s “2012 E-Commerce Index” examines the top 30 countries in the company’s “2012 Global Retail Development Index,” ranking the top 10 by their e-commerce potential.