In a single day in October 2021, Li Jiaqi and Viya, two of the most watched live-streamers in China, sold $3 billion worth of goods, more than triple Amazon’s average daily sales. And they did it without depending on any third-party e-commerce platform. This is the future of commerce – a new model that doesn’t rely on huge tech giants but on genuine connections, a sense of community, and equal access to the internet.
Traditional e-commerce has long acted as a gatekeeper to digital trade, reaping the lion’s share of the benefits of globalization and digitalization. But a new narrative is unfolding that positions the Davids of retail against the Goliaths of e-commerce. Millions of retailers across the world’s fastest-growing markets are waking up to the reality that there is a better way to sell on the internet – a way that doesn’t leave them at the mercy of Bezos and his hungry empire.
I have long maintained that the future of retail is not about trillion-dollar tech firms in Silicon Valley; it’s about the small retailers, the one-man bands, and the mom-and-pop shops that power the world’s economy across emerging market cities. The future of consumer goods trading is personal and intimate, powered by Open Commerce, a new type of technology. There is a new hope on the horizon for a future where power returns to the hands of the many – the next billion retailers.
The Battle of Commerce: Retailer Rebel Alliance vs. Galactice-commerce Empires
Today, over 90% of all consumer goods across emerging markets are traded offline, and most B2B payments are still in cash. This outdated system has made it impossible for sellers to grow their businesses, as they lack visibility across the supply chain. Last year alone, FMCG brands lost over $1 trillion in sales because their products didn’t reach the retailer’s shelves. This, in turn, has led to increased costs of products for consumers, many of whom cannot afford essential food products like rice, milk, or diapers.
Traditional e-commerce was touted as a revolutionary solution, promising to digitize trade and make consumer goods available and accessible for everyone. Despite its seeming success, it has failed to deliver on its promises and make trading easier for millions of small businesses and retailers, many of whom make little to no money by putting their products on these platforms.
In 1977, George Lucas introduced us to a galaxy where a scrappy Rebel Alliance stood up against the oppressive Galactic Empire, scoring unlikely victories against a seemingly invincible foe. This story is a perfect parallel to the state of global retail today, where small retailers are pitted against the largest e-commerce brands. Much like Darth Vader, third-party e-commerce marketplaces like Amazon and even Shopify, with their stringent rules and monopolistic practices, have stifled the growth of these small businesses and kept them from maximizing the enormous growth opportunities available via the internet.
The biggest problem with e-commerce is centralization. Third-party e-commerce platforms operate a centralized system and hoard essential market and customer data, preventing retailers from understanding the market or their own customers. Today, the average seller on Amazon does not know who is buying their products or where the demand for their products is coming from. They can only pour thousands of dollars into Amazon’s mysterious marketing engine to drive sales and hope their products get bought.
Furthermore, the high fees charged by these platforms eat into the already razor-thin margins of retailers, making survival, let alone growth, a herculean task. Little wonder why many small businesses say that Amazon’s growth is one of the biggest threats to their survival.
Empowering The Next Billion Retailers: The Call to Rebellion
The future of commerce is not in the developed economy, where consumer growth has slowed considerably. It’s in emerging markets, where 1 billion new consumers will be created by 2025, and annual consumption in these markets will reach $30 billion. In total, it is expected that there will be over 5 billion consumers across emerging market cities, and over 1 billion retailers will be needed to serve this growing market. However, these retailers must transform from simple mom-and-pop stores into digital micro-entrepreneurs fully equipped to compete in the digital economy. They must be empowered with cutting-edge digital technologies built for their specific context.
E-commerce platforms are already leveraging new technologies like generative AI and machine learning to capture even more of the market. For example, Amazon recently released a new AI feature that allows sellers to create content for their product pages – so professional-level product images can be generated with a few clicks. As far back as 2014, they had patented an “anticipatory shipping algorithm” that determines what products will be needed before an order is placed, so the product is already moving along the distribution chain. This level of technology sophistication is in sharp contrast with retailers in emerging markets who have to place a call to their distributors or sometimes wait in hope until the delivery van comes to their store.
We are bridging this technology gap at RedCloud with our AI-powered Intelligence Open Commerce platform. We are incorporating best-in-class generative AI into our suite of products, making it possible for brands to see in detail where the demand for their products are, who is buying their products, and other essential data. Our intelligent Algorithm collates data across the market in real time and provides sellers with actionable insights that can be leveraged to maximize growth opportunities across the market. We’ve also created the world’s largest local payment network that gives millions of retailers access to digital payments, even if they do not have a bank account.
The next billion retailers deserve better than the current tech ecosystem has given them. They need Open Commerce to survive, and RedCloud is proud to have helped over 300,000 retailers and some of the largest consumer brands to unlock exponential growth across emerging markets.
The rebellion is on.