Marius Costin from PayU talks about e-commerce landscape in a post-COVID market

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PayU executive on e-commerce landscape in a post-COVID market. Source:

PaySpace Magazine reached out to Marius Costin, Head of EMEA High-Velocity Sales & US Global Account Team at PayU to ask him about the current e-commerce state, most attractive markets nowadays, which sectors turned out to be the most unprepared, and more!

How has the pandemic shaped today’s payments and e-commerce landscape?

The pandemic completely transformed the payments market and has been the catalyst for a seismic acceleration from cash to digital transactions. Around the globe, we have seen continued adoption of mobile payments and this shows no signs of slowing down.

We have reached the much-anticipated tipping point of e-commerce adoption. The closure of non-essential businesses also caused merchants and services to move online and as a result, so did consumers. Many who had previously resisted online shopping have been won over by its simplicity and convenience. As it stands, e-commerce sales are on track to reach a staggering $5.9 trillion by the end of 2023. With over 59.5% of the global population being active internet users, digital transactions and e-commerce are now more accessible than ever before.

The rapid acceleration of e-commerce also called for a global innovation of the digital payments landscape. As such, the post-COVID payments landscape will heavily revolve around the customer experience to accommodate the continued trend of online shopping. For merchants, optimising their payment models to provide a seamless transaction experience is the first, and most critical, step for capitalising on the post-pandemic e-commerce boom.

Did PayU witness changes in demand across the regions it serves?

Absolutely – when COVID-19 hit, global demand for e-commerce services and solutions skyrocketed. Throughout the pandemic, we were committed to empowering local merchants to prosper online, and our free onboarding and fee holidays resulted in a huge surge in demand. In Colombia, nearly 1,500 merchants signed up for our online payments solutions in the second half of April 2020 alone. Global merchants in our portfolio were not an exception – the ones playing in growing business verticals accelerated their global expansion to leverage on the same e-commerce boom.

Our recent report, “The Next Frontier: the most promising markets for emerging e-commerce leaders in 2021 and beyond,” saw us analyse online consumer spend in 19 countries across five continents in four fast-growth e-commerce sectors: beauty and cosmetics, digital goods, fashion & gallantry, and education. And what we saw across the board was unprecedented consumer spending growth in e-commerce in high-growth markets that have often been overlooked before 2020 in favour of more traditional, Western markets.

Marius Costin. Source: PayU

Which market is now the most active for you in terms of the number of new clients? Can you highlight the main reasons for it?

Every market is completely unique, and as such, there are many different reasons for high demand. Through our global reach and local presence, each merchant can easily access through a single integration market across Asia, Central and Eastern Europe, Latin America, the Middle East, and Africa. Each market has its nuances and the effect of the pandemic differs across regions. But what The Next Frontier report clearly demonstrated was that Latin America has the most promising and consistent growth trends and is set to become the new global e-commerce destination for Emerging E-commerce Leaders – fast-growing online and omnichannel businesses looking to stand out in their sector.

It’s also worth noting that regions like Latin America, along with others such as Africa, Central, and Eastern Europe, and Southeast Asia, have increasing levels of disposable income for certain population groups. Coupled with a growth in both internet connectivity and mobile penetration you have markets full of digital-savvy shoppers with strong demand for globally-sourced goods and services.

Our goal when onboarding new clients and servicing existing ones has been to help navigate the crisis and align our services with what our merchants need to grow and scale their business. We adapt our approach across the board to fit the needs of each local market. In Colombia for example, we initiated an SMB promotion, reducing rates for credit cards and offering lower prices for foundations and merchants supporting crisis relief. Meanwhile in Poland, April and May 2020 marked the highest number of SME merchant registrations we’ve ever seen in one month, followed by a second wave in September. The overarching reason for this demand that applies across our markets is that e-commerce has been a lifeline for consumers, businesses, and economies.

Which sectors were the most unprepared for the pandemic?

No sector escaped disruption from the crisis, but some were impacted worse than others. Airlines had well-documented struggles, as did the leisure industry. Indeed, those sectors that rely on attracting large crowds, such as the performing arts and hospitality, suffered more than most.

Sectors that operated on legacy systems with limited online infrastructure also struggled. Even certain food retailers, which performed well, were held back due to not having the right technology in place. A survey found that convenience store retailers could not implement mobile payments, home deliveries, and self-checkouts quickly enough to meet the demands of this new normal.

Despite these challenging circumstances, we have seen additional innovations such as ‘click and collect’ becoming increasingly popular during times of crisis. In fact, a survey by McKinsey & Company late last year showed that 68% of South African consumers who used alternative mobile methods such as delivery pick-up point service for the first time during the lockdown said that they will continue using this method due to its flexibility. COVID-19 has brought forward a sense of urgency for genuine change – one which we must maintain.

From which sectors did you witness the highest demand?

Naturally, those sectors that were primed for online shopping have performed best. For example, when looking at the findings from The Next Frontier report we saw that beauty and cosmetics retailers performed well in Latin America, with a regional growth rate of 133%, while data analysis showed that total online spend on beauty and cosmetics across the region reached nearly $3.8bn in 2020.

Staying in LatAm we saw consumers in Chile and Argentina, in particular, gravitate towards digital goods in 2020, where spending increased by 211% and 131% respectively, according to PayU’s data. In Argentina, consumer spend in the sector is expected to reach $615m by the end of 2021.

However, it was fashion and gallantry that emerged as the sector with the highest consumer spend across every high-growth market. Annual consumer e-commerce spend in this segment is projected to be particularly high by the end of 2021 in India ($16bn) and Indonesia (>$9bn), followed by Russia, Poland, and Turkey (>$6bn) and Brazil and Mexico (>$5bn).

How did consumer behavior change amid the pandemic?

Over the course of the pandemic, consumers have become accustomed to accessing world-class products and services from the comfort of their own homes. However, digital payments are often not as easy to undertake across many international borders, especially between heavily cash-based markets. I think this change of consumer behaviour will catalyse innovation and policy reforms in global cross-border payments, and finally break down financial borders.

Alongside the accelerated breakdown of financial borders, one of the changing behaviours we’re witnessing firsthand is a huge increase in online remittances. Even before the pandemic, cross-border remittances in regions like sub-Saharan Africa were predicted to pass $67 billion in 2021. With facilitations being introduced through financial market infrastructures such as the East African Regional Payment System (EAPS), I predict that online remittances will continue to see innovation and growth.

Although physical remittances in low and middle-income countries fell in line with the economic slowdown, it’s a different story online. In July of last year, we led an $85m fundraise in Remitly, which reported that customer growth for the company was up 200% from 2019. Again, this is a technology-based solution, which does not require people to send money physically from shops; an appealing option for many consumers.

Will consumers return to their pre-COVID shopping and living habits? If no, why? If yes, when?

It’s still too soon to be conclusive, but there are early signs that there will be a longer-lasting shift in the way consumers shop. Countries that have tentatively reopened their high streets have witnessed footfall recovering at a slower rate than physical retailers would prefer, indicating that demand for e-commerce is here to stay.

The pandemic forced many to shop differently for the very first time, and often using different payment methods. Markets that have previously struggled with the widespread adoption of digital payments have seen a considerable shift in attitudes. All signs point to e-commerce now being fundamental to many economies. Once the fear of trying something new has been overcome, it’s becoming apparent that merchants have the opportunity to unlock a large pool of potential consumers due to the convenience and security of digital payments. This is an incredibly exciting behavioural change and one which is likely here to stay.

What measures can you suggest to merchants willing to save their businesses in these uncertain times?

For the businesses that have prospered in 2020, there’s one clear narrative: merchants must embrace technology and move operations online. There has never been a better time to be in e-commerce. At a time of unparalleled global disruption brought on by COVID-19, e-commerce has not only sustained sales for retailers but provided a lifeline for many consumers, offering their only route to groceries and everyday essentials.

By improving customer experience and security, enabling access to new markets with a wider pool of consumers, and offering tailored payment solutions, we’re helping merchants take the right steps. The pace of innovation in payments has been blistering for a while now, and the effects of COVID-19 are only going to disrupt the sector further. Merchants must adapt to reap both the short-term and long-term benefits.

Is there any way for merchants to future-proof their businesses?

Absolutely. As e-commerce continues to grow, merchants looking for cross-border growth will need to capitalise on the momentum now. This will be a key differentiator in terms of future success. Not only does moving online offer resilience in the face of future crises, it also allows small and large businesses to significantly widen their customer base. By partnering with an integrated payments provider like PayU, merchants gain access to over 400 different payment methods and 2.3 billion people with a single API, and expanding to any country in the world becomes increasingly seamless. Based on the payments landscape today, there’s never been a better time for merchants to take this step to future proof their business.

How do you see the role of governments in rebuilding economies and saving SMEs?

COVID-19 accelerated change across the globe and policymakers have been more central than ever as they react, recover, and reform. As we operate across +50 markets, we have had a bird’s-eye view of how all of these policy reforms affected markets. The best path to recovery still consists of the private and public sectors working together. Colombia is a prime example where the government did its best to facilitate collaboration and introduced a number of VAT-free days to entice consumers to spend. We witnessed sales rise by at least seven-times than that of regular shopping days.

The Central Bank in fellow Latin American country Brazil is also taking initiatives to accelerate e-commerce growth. Its Open Banking agenda will bring financial system interoperability to Brazil, and reduce consumer barriers to financial inclusion while reducing costs of accessing financial systems for consumers. The Central Bank has also launched QR-code based instant payment solution (Pix) which is expected to become so popular that they will account for 25% of all online payments within three years.

What’s critical in any government initiative to encourage e-commerce that helps rebuild economies and save SMEs is a collaboration with businesses whilst putting consumers and their needs front and centre. Collaboration is truly the only way in which we will create a world where everyone can prosper.


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