Ecom21 in Riga: sources of success

Wed, 19 Dec 2012

The participants of the international conference on e-commerce «eCom21», that was held under the patronage of Rietumu bank, are confident that the event will become a regular.

We consider this as one of the hallmarks that the ideas of the organizers are supported and welcomed by the market. The representative membership of the conference also speaks about success: over 20 speakers and 250 participants. And all together, it seems, leads to the conclusion: the time, place, and the ideas that guided the organizers - coincided with market expectations. The time and place is known: Latvia, Riga, 14-15 November 2012. And to understand the ideas let's turn to the reports and talks on the sidelines of the conference.

The most popular was, of course, the growth of e-commerce. It was a topic of discussion not only of the hosts of the conference - Rietumu Bank, but also other participants (for example, representatives of Tieto, the "Electronic money" Association). The charts presented by Rietumu Bank (see below) help to understand the increase of online sales - an online income in the world: 2011 - 680.635 billion USD, forecast for 2012 - 820.511 billion USD, forecast for 2013 - 963.028 billion USD.

Rise of online sales acording to Rietumu Bank

More rapidly mobile sales are growing (although the absolute figures are not as large, but the expected increase of 2.5 times in two years is impressive). From 2009 to 2011 the number of active Internet users increased from 20 to 34 million, and size of the purse replenishment has grown three times and reached 120 billion rubles.

of mobile sales in the USA according to Rietumu Bank

According to QIWI Wallet, the turnover of Russian online stores grew by several times (see below one of the slides presented at the presentation eCom21)

Rise of turnover of Russian online stores (by QIWI Wallet)

A statement of the rapid growth of e-commerce speakers accompanied by an analysis of the causes of growth. Among the main reasons for the trends described above, they highlighted:

  • moving from rental vehicles to direct transfer services of video and music (streaming);
  • the development of software and game content available on the web;
  • growth in sales of e-books and the press;
  • the growth of Internet commerce and mobile commerce;
  • globalization of sales processes of leading brands;
  • the grows of the customers mobility;
  • changes in the structure of demand (life virtualization, individualization of consumption);
  • the growth of online banking;
  • development of services C2G (interaction between government and citizens);
  • new customers (children and other categories not previously involved).

Of course, many of these points are interconnected - for example, changes in the structure of demand and new customers. Naturally, there are others, especially technological, factors contributing to the growth of e-commerce (some of them were called out in the report: the development of payment technology and logistics, the growth of Internet penetration and the "mobilization" of consumers, the socialization of consumption).

A number of reports were devoted to various aspects of the organization of cross-border trade in the world and, in particular, in the Baltic. In Prime Consulting Scottish and English Partnerships, the Cypriot and Latvian companies were compared on a number of parameters, including tax and VAT registration, maintenance costs and other characteristics (for example, a summary table of tax rates, which in Europe ranges from 10% (Bulgaria, Hungary, Cyprus) to 36.1% in France). Apart from various schemes of interaction between the companies in the holding, much attention was paid to the possibilities of Latvia, which in 2013 will cancel a number of tax revenue and will introduce a favorable tax regime for international holdings. The possibilities of selling agents were mentioned in the report of Deloitte.

A number of speakers discussed the payment schemes and platforms for their implementation. Along with specific examples of payment solutions, trends in payments and instruments of fraud detection and prevention were also discussed at the conference (PayOnline, Tieto, Optimal payments, Assist). The report of E-Money Association investigated the incipience of a single payment ecosystem, including mobile accounts, e-wallets, bank cards and payment terminals / ATMs.

The question of the relationship between traditional card payments and new tools was actively discussed at the conference. We asked Andrey Popov (QIWI Wallet) to comment on this: "Nowadays the ratio of payment instruments, of course, substantially shifted in favor of payment cards (plastic cards, classic). I wouldn't contrast cards and wallets in an explicit form as two incompatible entities that are just fighting with each other. In such a struggle, if it was, the victory would have remained on the side cards for a long time because the great number of customers and a lot of banks are tied into the system. Electronic wallets and cards are integrating, this is pronounced trend in the last couple of years. Most likely, some payments, which are traditionally made through credit cards, will be made in this integration. That is why in some time these two entities will not exist separately, they will be together. The number of customers using both e-wallets and plastic cards will increase. The specific functions of e-wallets, which are mainly used in electronic money systems, will bring card holders to the number of such users. I see a trend in this. This is a very quick process. If Qiwi initiated this integration in Russia, so within a couple of months the rest of electronic systems will also offer their users the integrated products. Speed will be measured in couple of years."

The conference also lighted anti-fraud issues in the implementation of payments (Visa Europe, Assist, etc.). Visa Europe presented interesting statistics on geography and types of card fraud.

Plastic cards fraud: where and how?

Technological and IT-solutions were also discussed by the conference participants. The range of these solutions is very wide from the analysis of game markets and comparison of industry players and social games (Games OS) to the IT-infrastructure solutions, data centers, etc. (Lattelecom, DEAC).

Of course, one review does not cover all aspects of eCom21. It's difficult even to identify its main priorities until the Conference has become a traditional. But there is background needed for that. PaySpace plans to participate in the next conference, which we will also tell you about.