Local E-Commerce Market Potential

The potential for local e-Commerce is significant. In 2013, the foreign e-Commerce market size was $530 million. In 2014, the estimated market size was $621 million; an estimated growth of 17.1%. Despite any supporting data and based on its infancy, we can safely say that the market size for local e-Commerce is considerably less. My opinion is that the market is less than $10 million. However, there is substantial room for growth.

Based on a report by Ecommerce Europe, the European retail online revenues for goods and services in 2013 were €363 billion. This represented a 16.3% increase from 2012 and 2.2% of European gross domestic product (GDP). In Europe the top 5 mature e-Commerce countries are the U.K., Germany, France, Austria and The Netherlands. The first 3 countries account for about 61% of the market. In Europe, internet penetration is 74%.

According to emarketer.com, U.S. retail e-Commerce sales were $263 billion in 2013. This represented an increase of 16.9% from 2012. In 2012, the growth rate was 16%. In 2013, the top categories were computer and consumer electronics (21.7%) apparel and accessories (16.7%) and auto parts (10.2%). The categories that saw the largest growth were books, music and videos (18.5%), apparel and accessories (17.6%) and auto parts (17.3%). In 2013, e-Commerce represented 1.5% of U.S. GDP.

No doubt e-Commerce can play a significant role in the economy. According to the international consulting firm, McKinsey and Company, e-Commerce can contribute as much as 3% of GDP for developed countries. For developing countries it is much less. For example, in African countries it is 1.1%; for Nigeria it is 0.8%. The lower the contribution the greater the potential for growth. Of course growth is dependent on the ICT infrastructure and internet penetration in the country.

In 2013, foreign e-Commerce represented about 0.37% of Trinidad and Tobago GDP. Certainly, local e-Commerce is a fraction of that. It is unlikely that the local e-Commerce market size will exceed that of foreign e-Commerce. Nevertheless, this new industry can generate considerable revenues. As can been seen by the growth rates for foreign e-Commerce and that of the US and Europe, local e-Commerce is likely to experience explosive growth.

Let us gain an appreciation of the potential market for local e-Commerce. From 2009 to 2013 the average GDP in Trinidad and Tobago was TTD 140 billion. Assume the market can grow to 0.1%, 0.15% or 0.20% of GDP. The potential market size in the short- to medium-term is TTD 140 million, TTD 210 million or TTD 280 million, respectively.

As you will agree we are a long way from the horizon. Nevertheless, as we develop the local e-Commerce industry do not lose sight of the high stakes.