Online shopping is a growing global phenomenon, and the country currently with the best ecommerce infrastructure is the Netherlands. That’s according to the UN’s annual B2C E-commerce Index.
The Index measures how prepared a country is to support online shopping. This year, it monitored 151 countries across the globe, seven more than in 2017. Each nation is ranked in terms of the quality of its ecommerce infrastructure based on several indicators. These include postal reliability, number of individuals using the internet, and the amount of secure internet servers.
Europe leads the way
Good news for Europe is that eight countries from the continent feature in the top 10 for best ecommerce infrastructure. And that’s even after Luxembourg, which topped the chart last year, fell to 19th place, This was down to a drop in the reliability of its postal service.
Following the Netherlands is Singapore in second place. Then come Switzerland, the UK, Norway, Iceland, Ireland, Sweden, New Zealand and Denmark.
The Netherlands performed well across most indicators achieving a high ecommerce infrastructure ranking. It was particularly strong with respect to secure servers where it was rated the best in the world. The study explained: “Secure servers is used as a proxy for ecommerce shops, and the Netherlands had over 40,000 pure play online retailers in 2016, the highest figure in the European Union.”
The Netherlands also has the second highest proportion of online shoppers in the world, namely 76% of the population aged 15 and older. Meanwhile, the UK rose two places to fourth thanks to one of the best postal reliability scores and having a high share of citizens with an ecommerce account. The country also boasts the highest annual online spend in Europe and is the country where ecommerce revenue takes up the greatest proportion of GDP at 7.3%.
The Asian angle
Singapore, the highest placed non-European country, was ranked highest in terms of postal reliability, along with Ireland. The Asian state was also the biggest climber in the top 10, rising from 18th place last year.
Focusing on Asia, Hong Kong and South Korea make up the top three states with the best ecommerce infrastructure along with Singapore.
A few major infrastructure components are needed for any country to support e-commerce shopping experiences. First, consumers must have access to banks or mobile wallets to be able to make payments online. Then, reliable, secure internet servers and good internet connections in homes are necessary to handle e-commerce site traffic. Retailers must also have access to an e-commerce tech stack that can help them manage stock and warehouse processes, and connect with logistics networks and shipping carriers to deliver to customers. Lastly, a country needs to have dependable postal services or good coverage with commercial shipping carriers to make delivery possible. Coverage can be a big barrier for commercial carriers to enter a market and it sometimes requires government incentives to make it easier.
Nearly 1/3 of the world’s population is now shopping online, but that’s not evenly distributed across the globe. Higher-income countries have a much larger number of online shoppers than lower-income ones. Lower-income nations tend to have fewer homes with internet access and often have rurally dispersed populations, making it more complex and expensive to ship e-commerce orders. Small and medium businesses don’t have the means to create their own technologies or logistics networks to compete with the e-commerce tech giants.
Because e-commerce allows brands to serve customers across borders, there is a good amount of overlap in the e-commerce platforms that brands have access to across these two major online shopping regions. Some of the most popular options include: Shopify, Magento, BigCommerce, Squarespace, Drupal Commerce, Woocommerce, Wix, Weebly and Voog.
Choosing the best platform can be based on factors from company size and technology maturity to skill sets and internal resources available. However, many of the platforms fall short after check-out. E-commerce retailers may also need a quality post-purchase experience platform that integrates with these tools to keep the customer experience seamless through delivery and returns. This emotional part of the online shopping experience becomes incredibly important as the cost of getting new customers increases and brands spend more resources encouraging repeat purchases.
The layers that make up e-commerce infrastructure can be incredibly complicated. The consumer-facing layers include the store’s front-end shop, feedback tools like Trustpilot, social platforms, and communications hubs. On the back end, there are carrier systems, order management and marketing systems, and customer service tools. Ecommerce retailers may either choose a platform provider or create their own proprietary systems. In the past, companies looked for a single system that could do most things well enough. But with emerging technologies and changing consumer trends, more companies are considering headless commerce, essentially allowing back-end data to be separated from front-end systems. This feature allows retailers more flexibility to add and change technologies and keep up with demands for new services like click and collect, curbside pickup, buy online and return to store, and virtual reality technologies. However, it comes at a cost in terms of development dollars and the tech skills required to build and maintain it.