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August 31, 2014

Alibaba: Ready to Conquer the Far West?

Filippo BattainiAnalyst Insight by Filippo Battaini - Retailing Analyst

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Alibaba has been featuring quite frequently in business news of late as the company piques investors’ interest with the issuing of its prospects for the planned IPO on the New York Stock Exchange. Notably with the opening of 11Mail.com, the Chinese e-commerce giant made clear that its presence in the US market will not only be limited to Wall Street or to Silicon Valley with investments in tech start-ups and that, with this move, Alibaba will attempt to compete against its fiercest global rivals, Amazon and eBay, in their domestic territory.

Global E-Commerce Competitive Environment

At present, and despite being mainly a regional player, Alibaba is the world’s second largest e-commerce company, with total B2C value sales of US$44.3 billion in 2013, according to Euromonitor International. However, when considering other indicators, in 2013 Alibaba was already the biggest online retailer in the world. For example, in terms of Gross Merchandise Volume, the Chinese company is bigger than Amazon and eBay combined, and also appears ahead of its two main competitions in terms of profits. So how do Alibaba’s operations compare with those of its main competitors?

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August 30, 2014

The Prevalence of Electronic Payments in the UAE

Dependence on cash is shrinking in the United Arab Emirates faster than many other markets around the world due to the prevalence of electronic payment methods. Improved infrastructure and a rise in point-of-service terminals and ATMs in the country are making it easy for consumers to pay for goods and services with electronic payments. Euromonitor forecasts that card payment transactions in the UAE will grow by 10.4 percent until 2018.

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August 27, 2014

Lessons Learned from the Mobile Innovation Summit

Michelle EvansAnalyst Insight by Michelle Evans - Senior Consumer Finance Analyst

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The CONNECT: Mobile Innovation Summit took place in mid-August in Chicago. The emergence of the connected mobile consumer was the conference’s overall theme. Throughout the event, speakers talked about the impact of mobility on various aspects of the commerce experience, including payments, marketing, loyalty, security and privacy. The conference explored many of the opportunities that retailers and restaurants have for leveraging mobile and digital channels to build their brands, increase sales and improve customer engagement.

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August 24, 2014

FMCG and Retailing in Russia: Uncovering Business Opportunities

The 7th annual Euromonitor International seminar FMCG and Retailing in RussiaUncovering Business Opportunities is organised for top-level management from leading companies operating in consumer markets, as well as government, trade and banking institutions. 

Hear more about each session from our expert panel of analysts by watching the video.

Register Now >>

 

August 21, 2014

The Four Aspects of PayPal’s Current Growth Strategy

Michelle EvansAnalyst Insight by Michelle Evans - Senior Consumer Finance Analyst

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When PayPal launched in 1999, online card payments were still a challenge for many merchants. PayPal’s great breakthrough was determining how individuals and businesses could more easily accept money over the web. PayPal’s founders figured out early on that it could make a decent profit in this low-margin business of processing transactions if it could encourage enough users to fund PayPal payments via bank accounts rather than financial cards.

In time, it was speed, convenience and security that made PayPal’s online platform popular, especially among eBay’s small-time sellers. PayPal went public in 2002, and immediately its market value skyrocketed. Within a year, eBay, which once dominated the e-commerce market, bought the start-up for US$1.5 billion, as it realised PayPal was squeezing out its own in-house payment option.

The core component of PayPal’s strategy today still hinges on this online platform that dates back to its roots. Today, the online platform enables its 150 million registered users to send money in 26 different currencies to over 200 countries and territories. Over time, PayPal has also moved into other aspects of financial services, including consumer credit, mobile card acceptance and even card issuance.

Even so, PayPal, which dominated the e-commerce storyline a decade ago, now finds itself fighting to stay relevant as consumers shift their focus to the emerging mobile channel. PayPal today is in the more established role as payment incumbent, facing increased competition from younger start-ups. The entire payments landscape today is filled with innovative start-ups all are aiming to solve problems while siphoning a portion of the payment transaction fees from more established players like PayPal.

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August 2, 2014

Arrival of Financial Cards to Latin America Led to Credit Binge

Michelle EvansAnalyst Insight by Michelle Evans - Senior Consumer Finance Analyst

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The introduction of financial cards to many emerging markets not only gave many consumers a new way to pay, but it also gave them easy access to credit. Consumers could fund more purchases than ever before. Of course, this newfound access to credit also came with its own set of challenges as many consumers can attest. While card lending helped some markets to rebound more quickly from the global recession or expand the economy in general, this emerging category of lending also left numerous consumers deep in debt.

The debt troubles associated with this lending type for consumers were especially pronounced across Latin America more so than any other region. Three Latin American countries (Colombia, Argentina and Chile) ranked in the top 10 for the fastest growth in card lending debt since 2008. In addition, out of the top 15 markets with the greatest reliance on card lending as of 2013, four are located in Latin America (Venezuela, Colombia, Argentina and Brazil). In fact, Latin America is the most reliant on card lending only after Asia Pacific, which was heavily influenced by China. 

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August 1, 2014

Euromonitor to Speak at Cartes 2014

CartesLogoEvent: Cartes: Secure Connexions

Date: November 4-6, 2014

Location: Paris, France

Event Description: The landscape of payment in the world is changing, non-bank players are emerging, offline – online – mobile: multi-channel era is on its way. As the world becomes more integrated and interconnected, it is important to have a level of trust while maintaining security between transactions. Moreover, new threats appear and thus new countermeasures are needed. Secure identity has become a critically important issue for citizens, enterprises and governments.

The 2014 conferences will provide an insight into major trends shaping the future of payments, digital security, identification & mobility.

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July 23, 2014

Open-Loop Pre-Paid Cards: The Fastest Growing Card Function

Kendrick SandsWith Kendrick Sands, Analyst - Consumer Finance

Open-loop pre-paid cards, which are network branded payment cards that do not have a limited pre-defined acceptance network, are the fastest growing card type in the world. These cards have proved their ability to replace cash and electronic transfer channels in several instances including government benefits and traveller’s cheques. Open-loop pre-paid cards can also help the unbanked and financially underserved by offering an alternative to traditional financial services and as a stepping-stone to other products and services.  

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July 17, 2014

Techweek Chicago 2014 Recap

David McGoldrickAnalyst Insight by David McGoldrick - Research Associate

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Techweek Chicago was held in Chicago over 23-28 June. The event centred on new technological advances that are disrupting nearly every area of commerce. Every industry – from finance and health to packaged food and tourism – is being impacted by these technological developments. The event was a chance to discuss and present on what has occurred so far and on new ideas in the pipeline.

Beacons and Mobility Create New Possibilities

Mobility was a big topic at the conference, with presenters discussing the infiltration of electronics into all aspects of life and how this will create smarter consumers, businesses and cities. Ray Velez, Global Chief Technology Officer at Razorfish, explained that growth in the number of internet-enabled devices sold will soon outpace growth in the number of children born each year. A panel on the future of location-aware marketing discussed how these internet-enabled devices (especially the combination of beacons and smart phones) could be used to enable customers to see reviews of products simply by standing in front of them. These devices could also let consumers know that items they have previously viewed online are available in the store they just entered. Others cited their potential usage in high-end boutiques and hotels, which will enable employees to recognise loyal customers and provide a personalised level of service.

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July 12, 2014

Coffee Shops are Best Positioned to Benefit from Mobile Payments

Dana LaMendolaAnalyst Insight by Dana LaMendola - Beverages Analyst

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Starbucks is the reigning poster-child for mobile payment implementation in US consumer foodservice. While its popular loyalty programme and early move into mobile payments contribute to Starbucks’s celebrity status, the company’s success is also reflective of the particular compatibility of specialist coffee shops and mobile payments. In fact, coffee shops might be the best positioned for mobile payments out of all consumer foodservice operators.

The reason that specialist coffee shops are so well positioned is that their primary offering – coffee – is an everyday and oft-repeat purchase. Indeed, in 2013 US consumers averaged over one cup of coffee per day. A large number of coffee shops purchases are made by commuters looking for their morning jolt on the way to the work.  The high frequency of purchases by coffee shops patrons make these consumers prime candidates for the streamlined payment methods and loyalty benefits afforded by mobile payment technologies. Furthermore, coffee shops are most attractive to demographics that have both access to and interest in mobile technology: affluent consumers, and younger tech-savvy consumers like students.

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Recent Posts

Alibaba: Ready to Conquer the Far West?

The Prevalence of Electronic Payments in the UAE

Lessons Learned from the Mobile Innovation Summit

FMCG and Retailing in Russia: Uncovering Business Opportunities

The Four Aspects of PayPal’s Current Growth Strategy

Arrival of Financial Cards to Latin America Led to Credit Binge

Euromonitor to Speak at Cartes 2014

Open-Loop Pre-Paid Cards: The Fastest Growing Card Function

Techweek Chicago 2014 Recap

Coffee Shops are Best Positioned to Benefit from Mobile Payments