Nestle sees emerging markets as an e-commerce opportunity

by Keith Nunes
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BOSTON — The proliferation of mobile technology will drive the development of e-commerce in emerging markets, said Paul Bulcke, chief executive officer of Nestle. In developed markets, Mr. Bulcke sees the development of business plans being more complicated.

“I do believe we have much more opportunity in the developing world in e-commerce,” Mr. Bulcke said June 4 during a meeting with investment analysts. “Why? Because, for me, e-commerce is going to lead our connection with the emerging markets, with emerging consumers. Because you go to villages in Africa and you know they are not going to have a Wal-Mart on every corner. You don’t have the infrastructure; you don’t have roads getting there. What is going to get there is e-commerce. Why? Because in Africa one billion people live there, and you have 100, 150 million cell phones all connected to the Internet. In China — their second-, third-, fourth-tier cities — how do you get there? E-commerce.”

But Mr. Bulcke was quick to point out that in developed markets the issue is more complicated.

“The fact is we do direct not to bypass retail,” he said. “If the motivation for direct was to bypass retail that would be a wrong motivation, because at the end of the day you would alienate your best partner.

“We are partnering at the end of the day and that is how we want to go about our relationship. Now, they (retailers) are looking quite a lot at ‘E,’ too. So how can we guard their e-journey?

“That does not mean we should not go ‘E’ ourselves. I mentioned that in the developing, emerging markets there are e-dimensions that are not retail based, because retail is not even there.”
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