People aged 45 and over will account for 51% of the increase in annual online spending in emerging markets through 2036, or $4.4 trillion.
This is according to a joint study by World Data Lab (WDL) and EBANX. Overall, emerging markets are expected to account for 60% of new online spending worldwide over the next decade.
The information is a sign of demographic changes in e-commerce in these countries. Traditionally, growth was driven by younger consumers owning mobile devices, while the generation of wealthier older consumers starts to play an important role.
The online spending of the people aged 65 years is the fastest-growing figure by the rate of 12.2% a year—the highest figure among all the age categories. By the year of 2036, consumers aged 45 to 64 years are expected to spend $318 billion on gaming, streaming, and social networks, which is almost 25% higher than the expenditures of people aged 15-29 years.
“Over the next ten years, people aged 45 and over will add USD 4.4 trillion in online spending in emerging markets, half of all the growth. Some of them already shop on their phones and will keep doing so as they get older. Others will buy online for the first time in their fifties or sixties. Merchants who build their checkout only for a 25-year-old will miss both groups,” said Wolfgang Fengler, CEO of World Data Lab.
According to the study, most new online buyers in emerging markets through 2036 (adults who use a mobile phone to shop on the internet) will be over 45: 223 million people aged 45–64 and 170 million aged 65 or older.
At the same time, younger consumers will remain important, especially in regions with very young populations, such as countries in Sub-Saharan Africa. In emerging markets, 221 million people aged 15–29 will make their first purchases through digital channels over the next decade. Online spending in this group will rise by $1.9 trillion (8.7% a year).
One of the key drivers of growth is the expansion of the middle class. By 2036, another 930 million adults will join it, bringing the total to 3.8 billion people. Two-thirds of them will enter the middle class as their spending rises above $13 a day, while the rest will come from population growth. Over the same period, the size of this group in developed countries is expected to shrink by 37 million people.
“A difference of almost a billion consumers in a single decade reveals a clear shift in the center of gravity of global consumption and cross-border business, which is moving toward the countries where most of the world’s population lives,” said Marie-Elise Droga, Chief Revenue Officer at EBANX.
Annual online spending in emerging markets will more than double, from $7.1 trillion today to $15.8 trillion in 2036. This represents an additional $8.7 trillion in the global digital economy. China and India will lead the growth (+$4.7 trillion and +$1.3 trillion, respectively), followed by Brazil ($249 billion), Indonesia ($243 billion), and Mexico ($191 billion).
Unlike in many developed economies, e-commerce in emerging markets is becoming less dependent on credit cards. The study projects that online spending by adults without a credit card in these countries will grow 130% over the decade, from $3.3 trillion to $7.6 trillion in 2036.
“This is closely tied to the innovation that came out of the financial industry in emerging markets, which developed solutions for an increasingly mobile economy and for the habits of local consumers. Today, we call them local payment methods, or LPMs, and they allowed e-commerce growth to decouple from the credit card, which still has very low penetration in these countries,” said Estelita Hass, Head of Market Intelligence at EBANX.
By 2036, only 20% of adults in emerging markets will use a credit card, compared with 66% in developed economies. As a result, two-thirds (67%) of new e-commerce users in these countries will join without a card. Local payment methods will be the main entry points for them: mobile money, digital wallets, locally issued debit cards, and instant account-to-account transfers (such as Pix in Brazil, UPI in India, and Bre-B in Colombia).
An older, larger, and more affluent audience that is increasingly paying digitally is creating new demand across all verticals. The largest absolute increase is expected in retail (+$4.3 trillion), while the fastest growth rates are projected in video gaming (14.2% a year, +$352 billion). Social media (+9.6%, $202 billion), SaaS (+9.6%, $459 billion), travel (+8.1%, $1.2 trillion), and streaming (+8.0%, $194 billion) are also expected to grow.
