A COMPLETE OVERVIEW
The rise of online stores
This article now has a Part 2 — The Growth of eCommerce: Trends and Statistics.
Ecommerce now plays a vital role in our daily lives. It is redefining commercial activities around the world. Over the years, eCommerce has evolved in profound ways. As we proceed, we will learn about the growth of eCommerce and how to run an eCommerce business in this age.
For starters, eCommerce is short for Electronic Commerce. It refers to the activity of buying and selling products or services over the internet. With the help of the internet, people can buy and sell virtually everything, like books, electronics, apparel, software, furniture. E-commerce provides a platform for people to buy or sell whatever they want, whenever they want.
Before the coming of eCommerce, the dominant form of commerce was the brick-and-mortar. Brick-and-mortar businesses are retail outlets that have at least one physical location. Buying and selling goods requires an active and physical interaction between the buyer and the seller. Brick-and-mortar commerce still exists, but, is quickly being replaced by eCommerce. In an evolutionary sense, most of the brick-and-mortar stores are transforming into eCommerce stores. Thereby requiring the establishment of an online presence and moving core business operations online.
Let us look at statistics and trends that depict the growth of eCommerce globally. We are going to describe the growth of eCommerce according to a report published in 2019 by Aaron Orendorff to help businesses launch beyond borders.
The report presents statistics and trends about eCommerce since 2014 and also gives estimates of the future of eCommerce up to 2023. Cumulative data over the most-recently tracked period anticipates a 276.9% increase in eCommerce sales globally.
The following is a regional breakdown of the eCommerce market ranks in 2019.
Asia and the US
E-commerce activities in the Asia-Pacific region represent over 70% of global eCommerce. China alone accounts for $2.8 trillion, while the US accounts for over $905 billion in eCommerce sales. Estimates show that China will reach $3.3 trillion in eCommerce sales by 2025. Similarly, the US is also expected to reach $1.5 billion in eCommerce sales by 2025.
Europe
Statistics from the report also depict the growth of eCommerce in European markets. However, Western Europe has accounted for the highest eCommerce growth in this region. The United Kingdom accounts for over $93 billion in eCommerce sales, which may grow to 31.5% by 2023. Similarly, Germany and France account for $77 billion and $55 billion in eCommerce sales, respectively.
Africa and the Middle East
Africa and the Middle East, however, portray the slowest eCommerce growth rates. The slow growth of eCommerce in Africa is due to low Internet penetration and slow adoption of technology by its population. E-commerce activities in this region only represent 1% of total eCommerce transactions worldwide. This estimate is expected to increase slightly by 2021.
Things to Note
- As Internet penetration and accessibility increases, more people can benefit from the majority of online services, including eCommerce.
- E-commerce has become mainstream in people’s daily lives with profound benefits.
- The eCommerce sector is expected to break the net accounting for double-digit growth in all locations around the world. Of course, the highest emergency market growth rates are in the Asia-Pacific and Latin America regions. Countries in these regions are responsible for the greatest eCommerce market success. Also, as digital payment options becoming more prevalent in these regions, eCommerce will thrive immensely.
- As of now, about 22% of the world shops online.
- Retail eCommerce sales may reach $5 trillion by 2021.
Let us look at the main factors that are responsible for the growth of eCommerce globally in a small time frame.
The Rise in the Use of Mobile Devices
The rise in the use of mobile devices globally has contributed to the growth of eCommerce. With mobile devices, people are buying and selling over the Internet more flexibly and passively.
Also, fintech companies are transforming payment methods, making them secure and simple to effect transactions. E-commerce businesses rely on these payment systems and are integrating them into their mobile applications. Customers are now more than ever, hooked to their mobile devices with fingers ready to pay.
Data-driven Nature
Statistical observations gathered by eCommerce businesses have also contributed to the growth of eCommerce. In the Business to Consumer model, eCommerce businesses track consumer preferences and make remarkable observations. These observations are then integrated into retail models for seamless future purposes, ensuring that eCommerce sales soar globally.
Improved Consumer Experiences
Consumers are usually in search of product offers at very affordable or discount prices. Personalization holds a higher command on customer engagement. Customers frequently encounter new product offers that match their interests and they can get with simple taps of buttons, without having to move their feet.
Low Cost
Another important factor responsible for the growth of eCommerce is the low cost of running an eCommerce business. Unlike brick-and-mortar stores, it is relatively cheaper to establish an online store than a physical one. E-commerce eliminates the need to build physical stores in which products are cataloged.
Also, eCommerce stores are accessible from any part of the world over the Internet. As a result, eCommerce stores are more accessible to customers globally and provide a passive experience for commercial activities.
The eCommerce sector has become broad and diverse. However, some giants are ruling the eCommerce world. These are businesses that have established a monopoly of some sort and immense credibility in the eCommerce sector.
The most popular eCommerce businesses worldwide are Amazon, Alibaba, eBay, and Walmart. These eCommerce giants have redefined the retail industry irrespective of location. They accumulate revenues that exceed billions of dollars yearly. As internet accessibility increases, these estimates would skyrocket. At the time of this writing, Amazon is present in 58 countries, Alibaba in 15, Walmart in 27, MercadoLibre in 18.
At the moment, we have a fair understanding of how eCommerce has grown in the past years. The question many people ask today is,
“How can we launch an eCommerce store?”
When you consider the level of competition that exists in the eCommerce sector, this becomes an important question. However, the thought that the demand for goods and services is always rising is a comforting fact. Also, the giants that rule the eCommerce world today have already answered that question.
There are many ways to launch an eCommerce store, but, an effective one that is cost-saving and guarantees support is to use an eCommerce platform like Shopify or Big Commerce.
An eCommerce platform is a software solution that allows businesses to build and manage online storefronts. A storefront is any customer or business facing proposition relating to the selling of products and services. These platforms provide everything a business needs to sell online, on social media, or in person.
Benefits of an E-commerce Platform
Running an eCommerce store using an eCommerce platform helps you to:
- Sell on a Global Scale: Using a single platform to sell products to anyone, anywhere — online with your eCommerce store, online marketplaces, and social media, and in-person with point of sale.
- Market your Business: Use built-in marketing tools that help you create, execute, and analyze campaigns on Facebook and Google.
- Manage your Business: Use a single dashboard to manage orders, shipping, and payments anywhere you go. Use insights provided to grow your business.
Just as eCommerce is changing the retail industry, it is also changing consumer experiences in so many ways. In eCommerce, consumer experience revolves around three key aspects:
Consumers who shop online do so at their convenience, wherever, and whenever they want. Unlike brick-and-mortar stores, consumers don’t need to be physically present at the storefront to effect a purchase. At the consumer’s comfort, he or she can swipe through products and with the push of a button (or a few) complete a purchase. As a result, this saves time and guarantees satisfaction. Of course, this is very important to the consumer.
E-commerce businesses go the extra mile of personalizing consumer experiences. Consumer experiences can be tailored based on the consumer’s past transactions. E-commerce platforms use insights obtained from consumers’ histories to suggest product offers that match their interests.
By shopping online, consumers save a lot on time, money, and other valuable resources. All consumers need to do, is place an order at a convenient time and location, and it is then made available to them.
The eCommerce sector is rapidly evolving as the Internet becomes more accessible in different parts of the world. Traditional retail businesses are migrating to the eCommerce space. Therefore, expanding their reach to consumers and also staying in the competition.
The improvement of consumer experiences in eCommerce stores is evident. An increase in Internet accessibility, ease of transaction, plenty of products and personalized offers, absence of the constraints of a physical presence and interaction makes online shopping desirable to consumers.
Whether you are a business or consumer, eCommerce has many benefits for you. Learn more about powering online stores with eCommerce platforms like Shopify and Big Commerce.
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FAQs
The Growth of Ecommerce? ›
The COVID-19 global e-commerce surge was initially born out of necessity. Online shopping provided a practical alternative as retail locations closed and people stayed in to avoid the virus. In fact, global e-commerce rose from 15% of total retail sales in 2019 to 21% in 2021.
What is the growth of e-commerce? ›Ecommerce growth is the process of increasing revenue, expanding your customer base, entering new markets, earning a bigger market share.
What is the biggest growth in eCommerce? ›In June 2022, forecasts projected that the e-commerce market would grow most significantly in Asia, Australia, and the Americas. Singapore and Indonesia were forecast to exhibit the largest growth, with increases in online sales of 36 and 34 percent, respectively.
What are the growth factors of e-commerce? ›- Growing investment in logistics and warehouses. ...
- Growing usage of debit cards for cashless transaction. ...
- Unique or Commoditized Products. ...
- Remarketing. ...
- Adoption of Multi-Channel Investments. ...
- Growth in cities beyond metros. ...
- Maintaining eCommerce Sites by the Third-Party Provider.
In the changed post COVID-19 business landscape, the global market for eCommerce Payments estimated at US$206.7 Billion in the year 2022, is projected to reach a revised size of US$612.1 Billion by 2030, growing at a CAGR of 14.5% over the analysis period 2022-2030.
Why is ecommerce booming? ›Why is ecommerce growing fast? The rapid adoption of smartphones, easy and affordable access to technology, and the convenience of shopping from anywhere, at any time are the major reasons for the rapid growth of online commerce.
Is ecommerce growing in the US? ›Total e-commerce sales for 2022 were estimated at $1,034.1 billion, an increase of 7.7 percent (±0.4%) from 2021.
Is ecommerce growing rapidly? ›Global ecommerce is growing rapidly.
In 2021, over 2.14 billion people worldwide were estimated to shop online, up from 1.66 billion global digital buyers in 2016. Chinese ecommerce platform, Taobao, is the largest online marketplace with a gross market value (GMV) of $711 billion.
According to a recent study analyzing the fastest-growing consumer products, products in the food and beverage are set to experience the biggest surge in online sales in 2023. Total retail ecommerce sales from these products are set to grow by 24.3% in 2023.
Is ecommerce growth slowing? ›With a big boost from inflation, e-commerce sales revenue in the US exceeded $1 trillion for the first time in 2022. But a far more reliable metric of its growth rate—the e-commerce share of overall retail sales—appears to be stalled between 14% and 15%.
What is e commerce growing so substantially? ›
Ecommerce activity has grown substantially over the past two years. While online shopping was already primed for healthy growth over the next decade, the COVID-19 pandemic accelerated any past projections. Globally, ecommerce sales saw a 27.6% growth rate throughout 2021.
What is the growth of ecommerce 2023? ›E-commerce sales are expected to grow 10.4% in 2023
Since 20.8% of retail purchases are expected to take place online in 2023, it's no surprise that e-commerce sales are supposed to increase as well. With more customers shopping online, your business can sell more and earn more as a result.
The e-commerce industry has been growing at an unprecedented rate in recent years. But with the rise of online shopping giants and a waning pandemic, is selling online still worth it in 2023? The answer is yes.
What is the future of ecommerce in 2040? ›E-commerce sales will reach 16% of all U.S. retail spending this year, 19.2% by 2024 and Nasdaq research anticipates that 95% of purchases will happen online by 2040.
How eCommerce is changing the world? ›Shoppers Have Greater Access to Goods
Today's consumers have access to more information, and ecommerce has given them access to products from around the world. New trade agreements and advances in ecommerce technology has opened the door for brands to sell outside their domestic markets and customers are bought in.
The buying power in the industry is relatively high since there is no switching cost for the customers. This makes customers switch eCommerce companies if they are not providing quality products. Moreover, buyers have a wide range of options due to the large number of companies in the industry.
Why is eCommerce declining? ›eCommerce grew disproportionately during the pandemic since physical stores remained closed. Once physical stores reopened (sometime around June 2021), the growth in traffic to DTC and eCommerce sites started declining. So did the share of eCommerce sales in total retail sales. The readjustments have happened.
Who is the leading eCommerce in USA? ›- Amazon. Amazon first started as an online bookstore and now offers a product catalogue so huge that one can find anything they need in it. ...
- eBay. ...
- Walmart. ...
- Etsy. ...
- Target. ...
- The Home Depot. ...
- Best Buy. ...
- Wayfair.
Amazon is the current leader in ecommerce in the USA with 1.704 billion visits in February 2023 alone.
When did eCommerce become popular in the US? ›By the 2010s, eCommerce rapidly started to pick up speed. In 2010, for the first time in online shopping history, U.S. online sales during Cyber Monday surpassed $1 billion. Around the same time, the launch of new digital payment tools helped add fuel to the fire.
When did eCommerce get big? ›
By the 2010s, eCommerce rapidly started to pick up speed. In 2010, for the first time in online shopping history, U.S. online sales during Cyber Monday surpassed $1 billion.
What is the most popular type of e-commerce? ›B2C E-Commerce. B2C e-commerce is the transaction between a merchant or retailer and an end customer on an e-commerce platform. It's the most common type of e-commerce today.
What is the failure rate of eCommerce? ›A research project completed by Forbes, Huffington Post, and Marketing Signals, found 90% of all eCommerce (online only) businesses fail within the first 120 days of launch. The research polled the failed leaders and asked them to define the top 10 reasons why they think the business failed (see the top 10 below).
What are the threats to the growth of e-commerce? ›Common threats to ecommerce businesses include fraud, malware, and other security breaches, along with the illegal sharing of data. Digital businesses should also be mindful of the risks associated with working with third-party vendors, digital security regulations, data privacy laws, and customer service issues.
Is e-commerce here to stay? ›Marketing Strategies E-Commerce Is Here To Stay. Many businesses are adopting the approach by creating eCommerce websites, as they know that they can reach a much larger audience at a lower monthly cost, by using online stores instead of traditional brick and mortar retail. Read this blog to find out more!
How profitable is ecommerce? ›What's a good profit margin for ecommerce? According to a 2023 NYU Stern School of Business study, you can make around 42.78% in gross profit margins and 0.64% in net ecommerce profit margins from your online business. But bear in mind that these are ballpark figures.
Which are the 4 phases of e-commerce? ›- Phase I: Get Back To Basics.
- Phase II: Make It Easy.
- Phase III: Make It Familiar.
- Phase IV: Create Conversation.
There are three main types of e-commerce: business-to-business (websites such as Shopify), business-to-consumer (websites such as Amazon), and consumer-to-consumer (websites such as eBay).
What is the difference between ecommerce and digital commerce? ›Ecommerce is focused specifically on buying and selling products online, while digital commerce encompasses all aspects of the consumer journey and leverages digital technologies to provide a seamless customer experience across all touchpoints.
What are consumers looking for in 2023? ›LONDON—Global consumer trends for 2023 include responsible but emotional spending, the role of digitization in purchasing processes, female equality demands and a disruptive Gen Z, according to Euromonitor International's Top 10 Global Consumer Trends 2023 report.
Does e-commerce have a future? ›
In conclusion, e-commerce is an ever-evolving industry, and staying ahead of the trends is key to success. In 2023, we can expect to see continued growth in social commerce, personalization, AR/VR, subscription services, and sustainable and ethical shopping practices.
Can you make money from e-commerce? ›Many eCommerce entrepreneurs make and sell their products through their websites, which means you own the entire brand and everything you produce. Whether it's arts and crafts, clothing, or any other types of products, you can make a profit if you have a unique skill.
Is Shopify still profitable in 2023? ›In 2023, every new online retailer wonders, “Is Shopify still profitable?” To put it briefly, the answer is yes. Shopify is still profitable for E-commerce startups whether you're looking to sell your wares online as a side gig or intend to turn it into a full-fledged enterprise.
What is the future of eCommerce in the US? ›Future Stats for eCommerce Industry
In the U.S., 16.4% of retail purchases are expected to take place online in 2023. By 2040, around 95% of all purchases are expected to be via eCommerce. Online stores with a loud social media presence will get 32% more sales on average those who do not.
...
Retail e-commerce revenue in the United States from 2017 to 2027 (in billion U.S. dollars)
| Characteristic | Revenue in billion U.S. dollars |
|---|---|
| 2027 | 1,563 |
| 2026 | 1,451 |
| 2025 | 1,357 |
| 2024 | 1,169 |
In 2030, retailers must have an integrated omnichannel shopping experience that allows them to plan their supply based on the demand they're driving by personalizing offers, making product recommendations, and better directing customer interest.
Is the fastest growing type of e-commerce? ›Automobile and auto parts was the e-commerce category with the highest expected year-over-year growth between 2021 and 2022. As of February 2022, car and auto parts retail e-commerce sales were forecast to increase over 30 percent compared to the previous year.
What is e-commerce growing so substantially? ›Ecommerce activity has grown substantially over the past two years. While online shopping was already primed for healthy growth over the next decade, the COVID-19 pandemic accelerated any past projections. Globally, ecommerce sales saw a 27.6% growth rate throughout 2021.
Is e commerce the next big thing? ›Global ecommerce sales are expected to reach $5.7 trillion worldwide in 2022, proving ecommerce is an increasingly lucrative option for businesses. That's huge, and the good news is that it certainly isn't a new trend. Ecommerce is also an industry that's ever-changing.
What is the fastest growing ecommerce in the US? ›Amazon will once again hold first place by a wide margin in 2023, with 37.6% of US retail ecommerce sales compared with the 6.4% of No. 2 Walmart Inc. Amazon has lost share since last year, but that will change in 2024, when its share will increase to 38.0%.
Why is ecommerce declining? ›
eCommerce grew disproportionately during the pandemic since physical stores remained closed. Once physical stores reopened (sometime around June 2021), the growth in traffic to DTC and eCommerce sites started declining. So did the share of eCommerce sales in total retail sales. The readjustments have happened.
What is the future forecast for ecommerce? ›Revenue from retail e-commerce in the United States was estimated at roughly one trillion U.S. dollars in 2023. Statista Digital Market Insights forecasts that by 2027, online shopping revenue in the U.S. will exceed 1.5 trillion dollars.
Is e-commerce on a decline? ›In conclusion, the idea that e-commerce is in decline is based on a narrow and misleading view of the data. In reality, e-commerce is experiencing strong growth, driven by permanent changes in how consumers discover new products and make purchase decisions.