Luxembourg named best place to shop online

22 April 2016

Luxembourg retained its position at the top of the latest UNCTAD B2C E-commerce Index measuring the underlying capability of 137 economies to support online shopping and other business-to-consumer electronic commerce.

The 137 economies represent 96% of the world population and 99% of world GDP. Among the top 10 economies on the Index, six are European, three are from the Asia-Pacific region and one is from North America (see table 1).

Among developing countries, three high-income economies – the Republic of Korea, Hong Kong (China) and Singapore – rank the highest, followed by several Gulf States. Uruguay is the top performer in Latin America and the Caribbean. At 61st place in the Index, South Africa is the front-runner in e-commerce readiness on the African continent (see table 2).

The Index, which draws on data on Internet use, secure servers, credit card use and the reliability of postal deliveries, shows that e-commerce readiness varies by region. Just over a fifth of the population in Africa uses the Internet compared to two-thirds in Western Asia. While Western Asia and former communist economies in Europe ("transition economies") fare well on most indicators, the availability of credit cards is average. Overall, Asia needs to boost Internet use, which currently stands at just over a third of the population, as well as the number of secure servers.

This year's Index was improved by increasing geographic coverage – from 130 to 137 economies – and fine-tuning the indicator to measure the delivery aspect of e-commerce. The greatest improvements compared with the previous Index are noted for Qatar (up 47 positions) and the United Arab Emirates (up 41 positions), in large part due to an improved indicator measuring postal efficiency. Conversely, Madagascar and Sierra Leone are negatively affected by the changed methodology and saw the largest declines in ranking.

In Latin America and the Caribbean, the main barriers appear to be low levels of credit card use and relatively unreliable postal services. Africa ranks the lowest in all the indicators. Unless there is improvement in the underlying transaction and logistics processes, online shopping in Africa is likely to remain confined to relatively well-off people in cities.

Aside from methodological changes, as compared to the previous edition of the Index, Uruguay and the Russian Federation have seen sizable improvements in their share of individuals with credit cards. This jumped by as much as 13 percentage points in Uruguay (from 27% to 40%) and by 11 percentage points in the Russian Federation (from 10% to 21%).

An increasing number of countries are designing national policies and strategies to harness the full potential of e-commerce for economic development and the UNCTAD Index can help policy makers assess to what extent their economies are e-commerce ready and what areas are in greatest need of improvement.

The UNCTAD B2C E-commerce Index 2016 is composed of four indicators: Internet-use penetration, secure servers per 1 million inhabitants, credit-card penetration and a postal reliability score. The straightforwardness and transparency of the Index allow countries to compare how they perform in different areas.

Table 1. Top 10 economies in the UNCTAD B2C E-commerce Index 2016
Note: The 2014 and 2016 indices have different postal methodologies.

Table 2. Top 10 economies in UNCTAD B2C E-commerce Index 2016, by region
Source: UNCTAD.