The Evolution of Online Shopping — Why E-Commerce Is the New Reality
We don’t always notice, but technology changes our daily lives. And this also applies to the culture of shopping from small products to expensive branded clothes.
How often do you order food through Glovo or Uber Eats? How often do you buy tickets for the plane, train, or cinema online? What about clothes? According to the research company Frost & Sullivan, in 2017, sales through social networks in China amounted to $90 billion. So, two years ago, in China (and we know this country is a technology leader), it was no longer necessary to leave home to make a purchase.
E-commerce is one of the fastest growing areas in the world.
And here a few figures as an example:
At the end of 2017, the e-commerce niche showed an impressive growth of 21%, reaching a volume of $2.3 trillion. 68% of the world’s online customers buy apparel, shoes, and accessories abroad. This was the largest of the three popular categories in 2017 (53%, consumer electronics; 53%, toys and hobbies).
In 2018, the volume of the Ukrainian e-commerce market increased by 30% over the year and reached 65 billion UAH. It is expected that in 2019 the market growth will be about 25%. And this means that the total sales of goods and services will grow to 80 billion UAH.
By the end of 2019, total sales of online stores around the world are projected to reach $2 trillion. By 2020, total sales in e-commerce in the world should double. The leaders in e-commerce are China, the US, Japan, Great Britain, and Germany.
In China, sales revenue in 2017 amounted to $600 billion, in the US $475 billion, in Japan $105 billion, in the UK $103 billion, and in Germany $57 billion.
The gross market value of cross-border trade in 2020 is projected to be $994 billion (22% of the global e-commerce market). According to AlibabaResearch, the average annual growth rate of the cross-border e-commerce market is 27.3%. 20% of purchases abroad are for more than $200, which is significantly more than in the domestic e-commerce market. Drivers of such purchases from other countries are 72% for the best prices, 49% for inaccessible goods, and 34% for new and interesting products. 570 million customers (57% of 1 billion online shoppers) have been shopping abroad for the past six months.
Platforms such as Instagram and Snapchat are adding e-commerce features. All this confirms the fact that the global e-commerce market will grow.
What is the problem with fashion e-commerce in Ukraine?
Branded clothing in Ukraine when there is not a seasonal sale on is about 30% more expensive than the same range in Europe. During the winter sales, the difference in price reaches 70–80%. This is because purchases of more than 100 euros are taxed at 30% (20% VAT, 10% duties). This fact and the reduction of travel expenses due to it being visa-free promotes the growth of the popularity of shopping abroad.
There are two negatives, limiting the possibilities of customer experience examples:
- Online customers from abroad currently cannot shop at retail stores, boutiques, and outlets without a personal presence at the point of sale. This restriction leads to lost opportunities for both online shoppers and offline retailers. Now the best way to circumvent such restrictions is to ask friends or acquaintances who are returning from abroad or to hire a shopping agent (professional buyer) to fulfill the purchase order. However, in the latter case, the problem of lack of trust often arises, since you need to pay all the money in advance to people you barely know or don’t know at all.
- Fashion marketplaces — for example, Farfetch.com — usually charge about 25% of the commission over the price of the retail partner store, which leads to a price increase for the final buyer of at least 25%, not counting the cost of delivery.
The European shopping centers are Italy, France, the United Kingdom, Germany, and Spain. Each of these countries has its own shopping features: from locations where buying clothes is more profitable to restrictions on paying for purchases. An advantage of shopping in Europe is the fact that most European countries have a VAT-free tax compensation system that allows you to return a part of the money spent on goods. But the main problem of shopping when traveling is time. The search for the desired clothes can take too much valuable time and effort on the trip and does not always bring the desired results. ChiPeer performers (Doers) can help you with this.
At the core of the idea of creating ChiPeer is a simple and effective solution that will eliminate the existing restrictions and create fundamentally new opportunities for online customers. ChiPeer is a platform that helps with the following shoppers’ challenges:
- How to benefit from purchases abroad in stores, boutiques, and outlets, including sales, without leaving your home.
- How to buy goods that are not available in the country of the buyer.
- How to track the best deals of products of interest simply and efficiently.
- How to save money and time on the purchase, as well as on the delivery of the order.
How ChiPeer works
The ChiPeer team is transforming the usual way of online shopping of fashion abroad. Imagine Instagram boosted by economic collaboration, where you can shop abroad in retail stores as if you were there in person. With the help of ChiPeer, every online customer can hunt for discounts and sales in stores and outlets somewhere in Milan or Paris without leaving home, at the same time taking advantage of the price and availability of the authentic products.
The process is quite simple. Authors/Sellers discover interesting fashion trade offers & sales and publish them on the platform for free. When the deal is closed, Authors earn from 3% to 5% of the commission. Shoppers choose the best offers from brands and make deals with the performers. Simply by clicking “make an order”. Performers (shopping agents, travelers or residents) pick up the purchase, provide delivery and receive financial rewards for it. All this happens within the framework of the platform. The platform charges 7% commission for its services.
Initially, the platform aims at working in Ukraine (shipped from Europe), then plans include scaling to the CIS countries, Europe, the USA, and Asia.
The economics of cooperation with ChiPeer creates an unprecedented digitalized labor market for micro-entrepreneurs, where every user benefits the ecosystem and its participants, whether in content creation or participation in the execution and logistics of orders, has the opportunity to monetize their work and business reputation.
Conclusions
10years ago, we didn’t know what Instagram was, much less about shopping on social networks. Technologies are developing and sometimes it seems that people have to adapt for life with them. But this is not the case. Technology helps us meet our needs. So why not use them to live at your pleasure, help yourself save money and time, and moreover earn more money?
