Logiq CEO Tom Furukawa Discusses Global Trends in Digital Commerce | Trends
By Jack M. Germain
Aug 4, 2021 5:00 AM PT
E-commerce and m-commerce are transforming the economic landscape. Both markets were steadily growing before the pandemic. But since then, consumers have been fueling both types of commerce with a frenzy.
For instance, global e-commerce is expected to yield $6.5 trillion by 2023, growing at 17.5 percent compound annual growth rate (CAGR). That represents nearly a quarter of all retail transactions.
“Global e-commerce is flourishing. As highlighted in a recent eMarketer report, the market is growing at a 28 percent pace with sales exceeding $4 trillion,” according to Tom Furukawa, CEO of Logiq.
Add to that, global m-commerce is on target to produce $4.3 trillion by 2023, growing at 18 percent CAGR. Mobile commerce transactions have overtaken desktop transactions.
CAGR is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance. That definition assumes the profits were reinvested at the end of each year of the investment’s life span.
U.S.-based Logiq is at the forefront of the changes. It is a global provider of e-commerce, m-commerce, and fintech business enablement solutions. The company has a portfolio of innovative offerings, such as AppLogiq, to help businesses capture opportunities in e- and m-commerce markets. Its DataLogiq business provides a data-driven e-commerce marketing solution.
The AI-powered LogiqX data engine delivers valuable consumer insights that enhance the ROI of online marketing spend. The company’s Fixel technology offers simplified online marketing with critical privacy features.
The E-Commerce Times discussed with Logiq CEO Tom Furukawa, opportunity trends in digital commerce and the role of market intelligence in the global commerce space. The interview covered the use of commerce platforms to stay informed about the e- and m-commerce markets, their trends worldwide, and the growth and trajectory in the sectors.
E-Commerce Times: How are e-commerce and m-commerce transforming the economic landscape?
Tom Furukawa: Certain trends in e-commerce and m-commerce are geographically specific. In Southeast Asia, for example, the strong growth in m-commerce has been driven by massive smartphone adoption. Just about everyone has a smartphone, while much fewer have PCs or laptops.
This makes the main challenge for businesses, mostly micro-sized, to develop and maintain an e-commerce and m-commerce presence. That requires marketing and selling their products and services to consumers through a dedicated app.
Does that mobile-only platform help or hinder payments?
Furukawa: While there is an increasing volume of digital payments, there remains a great amount of daily cash-based transactions. The transformation of cash payments to digital forms will be a pivotal market driver over the coming years. This trend is accelerating with fintech now gaining market share against conventional banking.
How else does the Asian market differ from U.S.-based e-commerce and m-commerce operations?
Furukawa: Another important aspect of Southeast Asia is the need for consumer product deliveries (consumer staples, food, etc.) at the hyper-local level. Indonesia is a great example. The population density and traffic patterns make it extremely difficult to drive, which creates a demand for delivery via pedestrian foot traffic.
Tom Furukawa, CEO of Logiq
In North America, businesses have much easier ways of bringing their brand online and conducting e-commerce transactions, such as via Shopify, Wix, and Squarespace. However, the biggest challenge for marketers is customer acquisition, with audience targeting being the hardest to get right.
The North American market is also interesting, because the top 10 e-commerce companies control 63 percent of all sales, with Amazon as the lead, according to eMarketer. This means there are in excess of 500,000 smaller brands struggling to compete with the large-scale players.
Does that mean that smaller brands have fewer chances for growth in the digital marketplace?
Furukawa: There is space to compete though, considering that forecasters anticipate 95 percent of all retail sales will be conducted in the e- and m-commerce space by 2040. That is economic transformation!
How much of this transitioning was already taking place prior to the pandemic?
Furukawa: The e- and m-commerce wave was growing for years prior to 2020, and Covid merely accelerated the dynamic by four to six years, according to Forbes.
The most glaring point that the pandemic revealed was that a business must have an online presence to be successful and grow. A brick-and-mortar presence alone is no longer a viable option. Even industries, such as medical clinics, which may have never considered a digital architecture, now realize that they need to develop and implement an online strategy.
Digital marketing is a complicated arena and businesses need a trusted partner to navigate the complexity. One other area of note, digital media consumption, and digital advertising have been steadily expanding year-over-year prior to the pandemic. In 2020 and into 2021, the growth skyrocketed and continues to show no signs of dissipating.
Pandemic aside, what trends are firmly entrenched in the economic landscape today?
Furukawa: The best answer is that e- and m-commerce are taking more market share of the overall retail space. Interestingly, in 2020, overall retail sales growth slowed, even as, previously mentioned, e-commerce accelerated by 28 percent. To that point, consumer behavior has permanently changed, and data-based marketing efforts are now embedded in the sales lifecycle.
Another macro advancement concerns data, artificial intelligence, and deep and machine learning. E-commerce is flourishing as data collection and analytics becomes more robust. The economics of data is a core pillar for e-commerce expansion in the coming decades.
What new trends are appearing?
Furukawa: For certain, the digitization of advertising continues to gain traction and momentum, as does the movement towards digital wallets and payment models.
In advanced economies, these trends are established, but in the emerging markets, they are still in the inchoate stage. As businesses and consumers discover the value in digital offerings, the curve on adoption is likely to steepen.
As an example, in the emerging and developing nations, the unbanked can participate in the economy to a far greater degree with access to digital payments and services.
A final point on new trends: E- and m-commerce are differentiated from traditional retail in that there are network effects driving the growth trajectory. User engagement and experience are the foundation of commercial activity. Brands such as Uber become more valuable as more users engage on the platform. Logiq’s AtozGo app is another great example of the economics of the network effect.
How does Logiq assist businesses in capturing opportunities in e- and m-commerce?
Furukawa: Logiq’s mission statement is to help businesses by simplifying e- and m-commerce. Focusing on Southeast Asia and the app presence for local businesses, our company’s AppLogiq solution enables a business to quickly create a digital presence on their own app. That gives consumers access to purchase goods and services.
As for the payment side, AtozPay is the company’s fintech solution to bring digital payments to the forefront in the region. Relative to deliveries, AtozGo provides the hyper-local delivery service in densely populated areas such as cities in Indonesia.
In the North American market, Logiq is helping those small and medium-sized businesses with their digital marketing, as a tool to compete for customers against the e-commerce giants. Our artificial intelligence-enabled, enterprise software solution, Logiq Digital Marketing, provides companies with the intelligence they need for targeting customers and increasing sales.
Are there specialized differences in how vendors/marketers need to approach e-commerce versus mobile commerce?
Furukawa: For m-commerce it is about enabling businesses to conduct their business via an online presence. The experience must be holistic to be successful. An app that does not offer a payment function becomes obsolete, just as a restaurant that cannot deliver food misses out on customers. M-commerce is all about the ecosystem and synergies.
In North America, the approach for vendors begins with the question: How can this business compete in the sphere of e-commerce against the titans?
The answer is to adopt technologies in a cost-effective way, which will optimize resource usage and elevate brand awareness.
What is driving the accelerated growth of the online economy today?
Furukawa: Ease of purchasing is an obvious factor for e-commerce expansion compared to a brick-and-mortar transaction. Ordering goods and services from a smartphone, tablet, or laptop is quick and efficient.
Beyond that, companies in every industry are now, at some level, e-commerce businesses. The requirement of an online presence, post-pandemic, is incredibly important for financial success.
Given these trends and their driving factors, what is the likelihood they will remain in the post-pandemic marketplace?
Furukawa: E- and m-commerce are not only here to stay, they are evolving and becoming an integral piece of the global economic framework. This progression is playing out in front of us daily and will accelerate as technologies improve and new participants enter the marketplace. The economics of commerce are morphing rapidly. In a word…disruption.
Are the e-commerce trends universal, or does geography play a role in how viable and thriving consumer adoptions are?
Furukawa: As mentioned, there are locale differences (Southeast Asia, North America, Europe, and South America). However, the most important distinction is between the advanced, developing, and emerging economies.
Because both e- and m-commerce are online-based (website and apps), smartphone proliferation is a key driver for consumer adoption. The largest surge in e- and m-commerce growth will emanate from the emerging and developing world.
How are innovations changing the e-commerce and m-commerce landscape?
Furukawa: The days of website-only e-commerce, marketing, and ads are over. There are so many other platforms and mediums, such as apps, streaming content, social media, audio, and native channels. These advancements have facilitated, to some degree, a leveling of the playing field for businesses across verticals and industries.
In addition, the ubiquity of data and analytical prowess are unlocking value for companies on customer behaviors, purchasing tendencies, future product, and service interest. Firms that can bring technology to market that makes data more actionable will thrive the most.
What innovations do you see as significant?
Furukawa: Without question, artificial intelligence, and deep and machine learning are essential. These technologies are revolutionizing the way companies utilize their customer data and ultimately how they advertise and market to customers and generate sales.
What lies ahead for e-commerce and m-commerce?
Furukawa: The next decades will be a period of robust growth for e- and m-commerce. The crucial intersection for companies will be their digital advertising strategy to customers, and the subsequent probability of this audience purchasing goods and services online.
Another fascinating space for the development of e- and m-commerce is in the augmented and virtual reality mediums. Companies can create unique branding experiences for customers on these platforms. To be sure, utilization of the technology from a commerce perspective is in its infancy.