Despite challenges such as limited infrastructure and digital literacy, the digitization trend in Emerging Markets is strong, driven by mobile technology and expanding internet access.
In this article we explore how digitized Emerging Markets are today, what trends are shaping their future and where they are headed as well as strategies like mobile leapfrogging, digital infrastructure investment, and e-government as means to accelerate digital transformation and unlock the potential of emerging markets in shaping the global digital economy.
How digitized are Emerging Markets today?
According to a report by GSMA, the global mobile industry association, there were over 5 billion unique mobile subscribers worldwide at the end of 2020, with 60% of these subscribers in developing markets. In addition, there has been a surge in internet usage, particularly in Africa and Asia, driven by the increasing availability of affordable smartphones and low-cost mobile data plans.
However, challenges such as limited access to electricity, lack of digital literacy, and insufficient regulatory frameworks remain significant barriers to digitalization in many emerging economies.
Therefore, the level of digitalization in emerging markets varies widely depending on factors such as infrastructure, economic development, education levels, and government policies.
Where is digitization going in Emerging Markets?
The digitization trend in emerging markets is strong, and it is expected to continue in the coming years. With advancements in technology and increased access to the internet, emerging markets are adopting digital technologies and services at an unprecedented pace.
One significant trend is the growth of mobile technology, which has become a crucial tool for accessing the Internet and digital services in emerging markets. Mobile subscriptions in these countries are predicted to reach 4.6 billion by 2025, which would represent 76% of the total population.
Additionally, the use of mobile payments and e-commerce is growing rapidly in emerging markets, with many consumers using these services for the first time.
Governments in emerging marketsare also making significant investments in digital infrastructure and promoting policies to support digitization. For example, many countries are rolling out national broadband plans and investing in smart city initiatives. The goal is to create a more connected and digitally inclusive society.
As these countries continue to digitize, it is expected that digital technologies and services will play an increasingly vital role in driving economic growth and improving the lives of citizens.
How can Emerging Markets leapfrog transition into a digital world?
There are several ways in which emerging markets can leapfrog into a digital world:
Mobile Technology: Mobile technology is an essential tool for leapfrogging into the digital world. Countries can skip the traditional PC era and move straight to mobile devices, which are often cheaper and more accessible.
Digital Infrastructure: Governments can invest in digital infrastructure, such as high-speed internet, to facilitate digital transformation. This can be done through partnerships with the private sector or by creating government-run programs.
E-Government: E-Government services can help streamline administrative processes and increase citizen participation in government decision-making. This can be achieved by developing digital platforms that enable online access to government services and information.
Digital Education: Governments can invest in digital education to ensure that citizens are equipped with the skills necessary to participate in a digital economy. This can be achieved through the integration of digital literacy into the education system.
Digital Payments: Digital payments can help facilitate e-commerce and increase financial inclusion. Governments can work with private sector partners to develop digital payment systems accessible to all citizens.
Innovation Ecosystems: Governments can create innovation ecosystems that support the growth of digital startups and entrepreneurs. This can be achieved through the creation of incubators, accelerators, and venture capital funds that provide funding and support to startups.
Public-Private Partnerships: Public-private partnerships can be an effective way to bridge the digital divide. Governments can work with private sector partners to develop digital infrastructure, services, and products that benefit citizens and businesses.
3 questions with…
FANU (Omagbemi) BIDEMI
Digitalization, Automation, Route Optimization & Analytics
Expert in Sales Forces Automation and Digitalization, Route Market Optimization, Incentive parameter setting, VAN Tracking, Customer Experience, and Gamification.
He says of himself: “I am one of those who sees the big picture in the weirdest of ideas and gradually works hard to make it a reality. Also, I strongly believe that those who change the world are those who do hard things.”
Q: How has the level of digitization changed over the past 20 years?
The level of digitization in the FMCG (Fast-Moving Consumer Goods) industry has increased significantly over the past 20 years. The adoption of digital technologies has transformed the way FMCG companies operate, from product development and marketing to supply chain management and customer engagement.
Here are some specific ways in which digitization has changed the FMCG industry over the past two decades:
Online sales: The rise of e-commerce platforms has allowed FMCG companies to sell their products directly to consumers online, eliminating the need for brick-and-mortar stores. Companies can now reach customers 24/7, and tailor their offerings to specific customer segments based on their online behavior.
Data analytics: FMCG companies can now collect vast amounts of data on customer behavior, product performance, and supply chain operations. With the help of advanced analytics tools, this data can be used to identify trends, predict future demand, and optimize production and distribution.
Social media: Social media platforms have become a key channel for FMCG companies to engage with consumers and build brand loyalty. Companies can use social media to share content, run promotions, and gather customer feedback in real-time.
Automation: Advances in robotics and automation have allowed FMCG companies to improve efficiency and reduce costs in areas such as manufacturing and warehousing. This has enabled companies to increase production speed and accuracy while enhancing quality control.
Q: What are the major obstacles that you identify in the growth of digital skills, adoption of technologies, and integration of digital services?
Here are some of the major obstacles:
Resistance to change: possibly the major challenge. Many companies are used to traditional ways of doing business and may be hesitant to adopt new technologies or change their business processes. This can be a major barrier to digitization.
Lack of digital skills: this is another major challenge among employees. To fully leverage digital technologies, FMCG companies need employees who are knowledgeable about digital tools and platforms. However, many companies struggle to find and retain employees with these skills.
Cost of implementation: Implementing digital technologies can be expensive, especially for smaller FMCG companies. The cost of hardware, software, and training can be prohibitive, making it difficult for these companies to invest in digital transformation.
Data integration: FMCG companies often have complex supply chains that involve multiple partners and systems. Integrating these systems and data sources can be a significant challenge, requiring careful planning and investment.
Q: What are the key drivers in your view that can support the upskilling of human capital and the growing adoption of technologies in emerging markets?
Overall, a combination of government support, public-private partnerships, investment in education and training, and collaboration with technology companies can help to drive the upskilling of human capital and the growing adoption of technologies in emerging markets.
In conclusion, the digital future of emerging markets is bright and full of opportunities.
With the increasing adoption of digital technologies, these countries are poised to leapfrog into a more efficient and sustainable future.
However, this transformation is not without its challenges, as emerging markets must address issues of infrastructure, regulation, and investment to fully realize the potential of the digital revolution. Nevertheless, with the right policies and investments, emerging markets can position themselves as leaders in the global digital economy, creating new opportunities for growth and prosperity.
As the world becomes increasingly digital, emerging markets have the potential to play an essential role in shaping the future of our global economy.