A COMPLETE OVERVIEW
The Growth of Ecommerce
The rise of online stores
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.
What Exactly is E-commerce?
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.
The E-commerce Explosion
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 $740 billion, while the US accounts for over $560 billion in eCommerce sales. Estimates show that China will reach $1,086 billion in eCommerce sales by 2023. Similarly, the US is also expected to reach $735 billion in eCommerce sales by 2023.
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.
Major Drivers of the Explosion
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.
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.
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.
E-commerce Giants: Everybody Wants to Rule the World
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.
Powering an E-commerce Store
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.
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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