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It is unusualYour browser does not support the element. for Amazon, the world’s biggest e-emporium, to be playing catch-up in its own industry. Yet that is exactly what it is doing in India, where last month it began piloting a quick-commerce service in the city of Bangalore, delivering a wide variety of goods in minutes. It is years behind local stars such as Swiggy, Zepto and Zomato, which already offer such a service.A decade ago Jeff Bezos, Amazon’s founder and then boss, stood atop a brightly decorated truck in Bangalore and waved a cheque for $2bn, determined to dominate India’s market. It has been an uphill struggle. The company, which accounts for a quarter of e-commerce sales in India, trails behind Flipkart, a local e-commerce rival that commands a third of the market (and is now owned by Walmart, America’s bricks-and-mortar behemoth). Elsewhere Amazon’s record has been worse. In South-East Asia it has been bested by local firms such as Shopee, Tokopedia and Lazada. In Latin America MercadoLibre, an Argentinian firm, is the undisputed leader in e-commerce (see chart).America’s internet champions once seemed destined to conquer the globe. With China off-limits, many turned their attention to expanding in other developing markets. Some of them triumphed, including Google, a search giant, and Meta, a social-media titan. But many did not, particularly in areas such as e-commerce, ride-hailing and digital payments, where local knowledge or physical presence matters. Uber, which once promised to make “transportation as reliable as running water, everywhere, for everyone”, withdrew from South-East Asia in 2018 after burning through over $700m. PayPal, a payments firm, has struggled to make inroads in much of the developing world, even as digital payments have boomed.Local challengers in the global south once imitated American offerings and competed with clever adaptations for their home markets. MercadoLibre and Flipkart built logistics networks in places where existing infrastructure was shoddy. MercadoLibre turned to motorcycles for congested cities. Flipkart introduced “cash on delivery” to counter mistrust of online payments. Now internet firms in the global south are moving from adaptation to invention—and teaching American firms a thing or two in the process.Quick commerce is one example. The pandemic-era frenzy in the West for ten-minute deliveries has largely fizzled out. In India it is . In its densely populated cities, where roads are often gridlocked, riders on two-wheelers zip around making small deliveries to lots of customers, relying on networks of compact warehouses. The products on offer go well beyond groceries and include everything from clothing and electronics to gold coins. Bernstein, a broker, reckons that quick-commerce sales in India reached $7.2bn in 2024, up from just $200m in 2021, and will almost double this year.Another example is digital banking. Whereas centuries-old banks continue to dominate in the West, digitally native ones have made big inroads in the global south. Nubank, a Brazilian digital lender, has more than 100m customers in its home market, representing over half the adult population, and is expanding quickly across Latin America. Its approach has been to focus on segments of the population that have been underserved by traditional banks, whose reliance on physical branches makes it expensive to serve poorer customers. Having started with credit cards, it now offers bank accounts, insurance and investments. A strategy of targeting underserved customers has also worked well for Meesho, an online marketplace that has focused on India’s smaller cities and is now its third-largest e-commerce firm by sales.A final example is , which blends shopping with entertainment. It has taken off in South-East Asia, where most online shopping is done on smartphones (65% of e-commerce sales in Indonesia are made on mobile devices, compared with 39% in America). Jianggan Li of Momentum Works, a Singaporean research firm, notes that traditional e-commerce sites spend heavily to lure in users. Social selling keeps costs low as users come to be entertained and stay to shop.In 2021 TikTok, a short-video app owned by ByteDance, a Chinese tech giant, launched TikTok Shop, which lets users buy products while scrolling. In 2023 the app sold $20bn-worth of products, with three-quarters of that coming from South-East Asia. The model proved so successful in Indonesia that the government banned e-commerce sales on social-media platforms to protect small merchants. TikTok acquired Tokopedia in response, and now offers a similar service through it. In September Shopee announced a partnership with YouTube, an American video site, to develop a rival offering.Not all these innovations will have a place in the West. Costly labour and lower population densities make quick commerce tricky in America and Europe. It can be tough to find underserved populations in rich countries. Social commerce, though, is gaining momentum. America is now the largest market for TikTok Shop, overtaking Indonesia last year. Although America’s Supreme Court is deciding whether to in the country from January 19th, TikTok continues to expand elsewhere in the West.That should remind America’s tech giants to keep an eye on innovations in the global south. Local ideas often take time to “bubble up” to headquarters in Silicon Valley, notes Kevin Aluwi, co-founder of Gojek, an Indonesian ride-hailing app, who is now a venture capitalist. Those delays could cost America’s champions dearly.
