E-Commerce in Developing Economies: A Decade of Growth, Challenges and the Road Ahead

Over the past decade, e-commerce has moved from being a relatively specialised way of shopping to becoming an important part of the emerging digital economy. Nowhere has this transformation been more interesting than in developing economies.

From Africa and South Asia to Southeast Asia and Latin America, millions of consumers who once depended almost entirely on physical shops and cash transactions are increasingly discovering, comparing, ordering and paying for goods and services digitally.

The transformation has not been smooth. Developing economies have had to contend with unreliable logistics, limited digital infrastructure, low levels of consumer trust, cash dependence, inadequate digital skills and large informal sectors. Yet despite these obstacles, e-commerce has demonstrated remarkable resilience.

The evidence increasingly suggests that developing economies are not simply following the path taken by richer countries. In many respects, they are developing their own models of digital commerce—models built around smartphones, social media, mobile money, marketplaces and increasingly sophisticated local payment systems.

According to UN Trade and Development (UNCTAD), e-commerce sales in developing economies grew at almost twice the average annual rate of developed economies between 2016 and 2024, based on the countries for which comparable data are available. Global business e-commerce sales reached approximately $28 trillion in 2024 across 45 economies covered by its dataset.

The story of the past decade is therefore not simply one of online shopping. It is the story of developing economies gradually building the infrastructure, businesses and consumer habits required for a digital marketplace.

The First Phase: From Websites to Marketplaces

At the beginning of the last decade, e-commerce in many developing countries was still relatively immature.

Businesses that wanted to sell online often had to build their own websites, arrange their own payment systems and figure out delivery themselves. Internet access was more expensive, smartphones were less widespread and consumers were often reluctant to enter payment details on unfamiliar websites.

This made traditional online retail difficult.

The emergence of large marketplaces changed the equation.

Instead of every retailer having to build an entire digital infrastructure, marketplaces could provide the storefront, payment mechanisms, product discovery, customer reviews and, increasingly, logistics.

This lowered the barriers to entry for small businesses.

A small retailer no longer necessarily needed a sophisticated e-commerce website to begin selling online. In many markets, establishing a presence on a marketplace or social platform was enough to reach customers beyond the immediate neighbourhood.

This was one of the most important developments of the decade because it allowed millions of small and medium-sized enterprises to participate in digital commerce without having to become technology companies themselves.

The Smartphone Changed Everything

Perhaps the most important technological development behind e-commerce growth in developing economies has been the smartphone.

Developed markets largely experienced e-commerce through desktop computers before smartphones became dominant. Many developing economies have taken a different route.

For millions of people, the smartphone was their first meaningful gateway to the internet.

This produced a mobile-first form of e-commerce.

Customers could discover products through social media, communicate with sellers through messaging applications, make payments using mobile money and receive deliveries without ever visiting a traditional e-commerce website.

Africa provides a particularly clear example.

Mobile connectivity has become an important foundation for digital commerce, while smartphone adoption has continued to expand. In several major African markets, mobile devices already accounted for more than half of e-commerce transactions as early as 2020.

This has important implications for businesses.

The successful e-commerce model in a developing economy does not necessarily begin with a large desktop website. It may begin with a smartphone, a social media page, a messaging application and a reliable payment method.

Social Commerce Has Become a Major Force

Another defining trend of the past decade has been the growth of social commerce.

Platforms originally designed for social interaction have increasingly become marketplaces.

Consumers discover products through photographs, videos, recommendations, influencers and conversations. They then contact sellers directly through messaging applications or follow a link to complete a purchase.

This model is particularly powerful in developing economies because it reduces some of the barriers associated with traditional e-commerce.

A small business may not have the resources to build a sophisticated online store, but it can often photograph its products, post them online and communicate directly with potential customers.

In markets where trust is a major issue, social interaction can also be important. Buyers may want to speak to a seller before placing an order.

The result is a hybrid form of commerce in which social media, messaging, physical retail and e-commerce increasingly overlap.

Mobile Money Has Created a Different E-Commerce Path

One of the most significant differences between developing and developed markets is the importance of mobile money.

Traditional e-commerce was built heavily around bank accounts and payment cards. But large sections of the population in developing economies have historically had limited access to conventional banking services.

Mobile money has provided an alternative.

The growth has been especially striking in Sub-Saharan Africa. According to GSMA’s 2025 mobile money industry report, global mobile money transaction value has doubled from $1 trillion to $2 trillion in only four years, while regular usage has continued to rise.

This matters enormously for e-commerce.

A consumer who does not have a credit card may still have a mobile wallet.

A small business that cannot easily obtain sophisticated merchant banking facilities may still be able to receive mobile payments.

This has helped create a digital commerce ecosystem that is fundamentally different from the one that developed in North America and Western Europe.

COVID-19 Accelerated a Transformation Already Underway

The COVID-19 pandemic was a major turning point.

Lockdowns and restrictions forced consumers and businesses to experiment with online purchasing on a scale that would probably have taken many more years under normal circumstances.

Restaurants began accepting online orders. Shops started using social media to sell products. Consumers became more comfortable with digital payments and delivery services.

UNCTAD reports that business e-commerce sales accelerated during the 2020–2023 period as companies and customers turned to digital channels to compensate for disruption to conventional sales channels. Although growth slowed somewhat in 2024, sales remained above the previous year’s level.

The pandemic therefore did not create e-commerce from nothing.

It accelerated a transition that was already happening.

Many customers who had previously been hesitant to buy online were forced to try it. Some never went back completely to their old purchasing habits.

The Success Story of Small Businesses

One of the most important achievements of e-commerce in developing economies has been its ability to give small businesses access to larger markets.

A traditional shop is constrained by location.

An online seller potentially has access to customers across an entire city, country or even region.

This has created new opportunities for:

• Small retailers
• Food producers
• Fashion businesses
• Artisans
• Beauty businesses
• Farmers and agricultural enterprises
• Home-based businesses
• Service providers
• Independent brands

For entrepreneurs, e-commerce can reduce the importance of having an expensive physical storefront.

A business can begin with a relatively small inventory, market through social media, receive digital payments and use third-party delivery services.

That does not make success easy, but it lowers some traditional barriers to entering retail.

But the Obstacles Have Been Significant

The growth of e-commerce should not obscure the fact that developing economies face structural obstacles that richer markets often take for granted.

1. Logistics

Getting a customer to place an order is only half the problem.

Getting the product to the customer reliably is the other half.

Weak addressing systems, poor roads, traffic congestion, inadequate warehousing, expensive transportation and unreliable delivery networks can make e-commerce difficult.

A website may promise delivery within 24 hours, but that promise means little if the logistics infrastructure cannot support it.

UNCTAD has repeatedly identified transportation and logistics as important constraints on e-commerce development in developing countries.

This is one reason why successful e-commerce companies in emerging markets often end up investing heavily in logistics rather than concentrating exclusively on technology.

2. Trust

Trust remains one of the biggest obstacles.

Consumers may worry that:

• The product will not look like the photograph.
• The seller may disappear after receiving payment.
• Their payment information may be compromised.
• Their personal information may be misused.
• The product may be counterfeit.
• A promised refund may never arrive.

These concerns are particularly important in markets where consumer protection systems and online dispute resolution are still developing.

Building trust therefore requires more than attractive website design.

Businesses need clear contact information, transparent pricing, reliable delivery, secure payment systems, customer reviews, return policies and responsive customer service.

3. Cash Remains Powerful

Digital commerce does not automatically produce a cashless economy.

In many developing markets, consumers continue to prefer cash, sometimes because they trust it more and sometimes because digital payment options remain expensive or inconvenient.

Cash-on-delivery became an important bridge between traditional and digital commerce.

It allowed consumers to order online without having to make an advance digital payment.

But it also creates problems for merchants, including failed deliveries, customers refusing orders and the cost and security risks associated with transporting cash.

Ghana provides a useful example. UNCTAD’s assessment identifies continued cash dominance, transaction costs and limited trust as barriers to the wider adoption of digital payments for e-commerce.

4. The Digital Divide

Internet access has expanded enormously, but access is not equal.

There can be major differences between:

• Urban and rural communities
• Wealthier and poorer households
• Younger and older consumers
• Large companies and micro-businesses

Even where internet coverage exists, data costs, device affordability, connection quality and digital skills can determine whether people can actually participate in e-commerce.

This creates an important distinction:

Being connected is not the same as being digitally included.

UNCTAD continues to identify infrastructure, skills, resources, access to capital and enabling policy environments as major factors determining whether developing countries can fully benefit from digitalisation.

5. The Informal Economy

The large informal sector found in many developing economies presents both an opportunity and a challenge.

Millions of informal businesses already sell products and services successfully, but they may not have:

• Formal business registration
• Digital accounting systems
• Professional websites
• Merchant payment accounts
• Reliable inventory systems
• Formal customer records

This makes it difficult to measure the true size of e-commerce.

It also makes it harder for businesses to access financing and integrate with larger digital platforms.

Yet the informal sector could become one of the greatest sources of future e-commerce growth if more small businesses can be brought into the digital economy.

Ghana: A Useful Example

Ghana illustrates both the progress and the unfinished work.

UNCTAD’s Ghana eTrade Readiness Assessment reported internet penetration of approximately 76% in 2023, while also identifying rural connectivity, logistics, payment costs, consumer trust and policy coordination as continuing challenges.

At the same time, Ghana has developed significant digital payment infrastructure.

Mobile money has become deeply embedded in everyday economic activity, while Ghana’s payment ecosystem includes interoperable systems that connect banks and mobile money platforms. KPMG reported that mobile money transaction value reached GHS 2.36 trillion by October 2024, up 55% year-on-year, illustrating the scale of digital payments in the economy.

This creates an interesting situation.

The country has many of the foundations needed for a much larger e-commerce economy, but the opportunity is constrained by issues such as logistics, trust, affordability, consumer habits and the informal nature of much of the retail sector.

For Ghanaian businesses, therefore, the next stage of e-commerce is unlikely to be simply about putting more products on websites.

It will be about building trust and making the entire customer journey easier.

The Rise of Local Solutions

One of the most encouraging trends is that developing economies are increasingly producing their own digital solutions rather than simply importing models from developed markets.

Local payment systems, mobile wallets, delivery platforms, digital marketplaces and fintech companies are being built around local circumstances.

This is important because the needs of a consumer in Accra, Nairobi, Lagos or Dhaka are not necessarily identical to those of a consumer in London or New York.

Developing economies have therefore become laboratories for new business models.

Mobile-first commerce, social selling, mobile money, agent networks and hybrid online-offline businesses are examples of solutions that have emerged partly because conventional models were not always suitable.

What Does the Next Decade Look Like?

The future prospects for e-commerce in developing economies are strong, but growth is likely to become more sophisticated.

The next stage will not simply involve getting more people to shop online.

It will involve building better ecosystems around online commerce.

Mobile Commerce Will Continue to Dominate

As smartphones become more affordable and connectivity improves, mobile commerce will remain central.

Businesses will increasingly design the entire shopping experience around the smartphone rather than treating mobile as a smaller version of desktop e-commerce.

Digital Payments Will Expand

Mobile money, account-to-account payments and other local payment methods are likely to become increasingly important.

Ghana provides a good illustration. A 2024 global e-commerce payments analysis projected that non-card wallets could account for 43% of Ghanaian e-commerce transaction value by 2028, compared with 24% in 2023.

The broader lesson is that the future of e-commerce in emerging markets may be less card-centric than the traditional Western model.

Logistics Will Become a Competitive Advantage

As more businesses sell online, delivery will become an increasingly important differentiator.

Customers will expect:

• More predictable delivery times
• Better tracking
• Easier returns
• Lower delivery costs
• More convenient collection points

Businesses that can solve these problems efficiently will have an enormous advantage.

AI Will Transform Online Retail

Artificial intelligence is likely to become one of the next major drivers of e-commerce.

AI can help businesses:

• Recommend products
• Answer customer questions
• Create product descriptions
• Translate content
• Predict demand
• Manage inventory
• Detect fraud
• Personalise shopping experiences
• Automate customer support

For small businesses, this could be particularly significant because AI can provide capabilities that previously required larger teams.

Social Commerce Will Become More Sophisticated

Social commerce is likely to evolve from simply displaying products on social media into a much more integrated shopping experience.

Customers may discover a product in a video, ask questions through an AI assistant, complete payment through a mobile wallet and track delivery without leaving the broader digital ecosystem.

The distinction between social media, advertising and e-commerce will continue to blur.

Cross-Border E-Commerce Could Become a Major Opportunity

Perhaps one of the biggest long-term opportunities is regional trade.

A small business in Ghana should not necessarily have to limit itself to customers in Accra or even Ghana.

As payment systems, logistics networks and regional trade infrastructure improve, businesses could increasingly sell across West Africa and beyond.

The African Continental Free Trade Area provides a broader framework within which digital commerce could eventually play a much greater role.

For African entrepreneurs, this could be transformative.

The Real Opportunity Is Bigger Than Online Shopping

It is tempting to measure e-commerce simply by asking how many people buy products online.

But its economic impact can be much broader.

Digital commerce can help small businesses reach new customers, create jobs, formalise transactions, improve access to financial services and connect local producers to larger markets.

It can also give consumers greater choice and make it easier to compare prices and products.

UNCTAD notes that digitalisation can create opportunities for innovation, productivity, new business models and participation in regional and global value chains.

However, these benefits are not automatic.

If connectivity improves but logistics remain weak, e-commerce will struggle.

If payment systems improve but consumers do not trust sellers, adoption will remain limited.

If businesses get online but lack digital skills, many will not be able to compete effectively.

The future therefore depends on building the whole ecosystem, not just the online storefront.

Conclusion: From Digital Experiment to Economic Infrastructure

The past decade has demonstrated that e-commerce can thrive in developing economies even when the conditions are very different from those in developed countries.

The winning formula has often involved adaptation rather than imitation.

Smartphones have replaced computers as the primary gateway for many consumers. Mobile money has provided an alternative to traditional card-based payments. Social media has become a sales channel. Marketplaces have lowered barriers for small businesses. COVID-19 accelerated adoption. And local entrepreneurs have developed solutions suited to their own markets.

Yet enormous challenges remain.

Trust, logistics, digital skills, infrastructure, affordability, regulation and access to capital will determine how far the next phase of e-commerce can go.

The prospects, however, are compelling.

UNCTAD’s latest data indicate that e-commerce sales in developing economies have been growing faster than in developed economies, suggesting that much of the world’s future digital commerce growth may come from markets that are still relatively early in their digital transformation.

The next decade could therefore be even more significant than the last.

For businesses in developing economies, the question is no longer whether e-commerce belongs in the future.

It is whether they will be ready to participate when that future arrives.

For entrepreneurs, retailers and service providers, the opportunity is clear: build trust, embrace mobile-first commerce, adopt appropriate digital payments, solve delivery problems and create experiences that make buying easier.

For governments and institutions, the challenge is equally clear: invest in connectivity, digital skills, consumer protection, payment infrastructure, logistics and policies that allow small businesses to participate.

And for web and technology companies such as Webtrix Graphix, the opportunity is to help businesses make that transition—from simply having an online presence to building digital systems that actually generate business.The next era of e-commerce in developing economies will not simply be about selling more things online. It will be about creating a more connected, accessible and inclusive way of doing business.