A Brief Overview of the Global Ecommerce Market

A Brief Overview of the Global Ecommerce Market

A Brief Overview of the Global Ecommerce Market

By Tallal Nawaz

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E-commerce is big business and getting bigger every day. Growth estimates from eMarketer report that business-to-consumer (B2C) e-commerce sales worldwide will reach $1.5 trillion in 2014, increasing nearly 20% over 2013. But not all e-commerce categories are created equal. The most popular e-commerce categories, not surprisingly, are nonconsumable—durables and entertainment-related products. Almost half of global respondents in an online survey intend to purchase clothing or make airline or hotel reservations using an online device in the next six months. Other categories growing in prominence for online shopping include e-books, event tickets, sporting goods and toys (to name a few). Spending intentions for each have risen at a double-digit or near double-digit percentage-point rates since 2011.

The online market for buying groceries and other consumable products is comparatively smaller—but is starting to show promise. While durables are the starting point of adoption, consumables are attractive due to the frequency of purchase. Aside from online purchasing, digital is an increasingly important research and engagement platform. Consumable categories are not likely reach the same level of online prominence as non-consumable categories due to the hands-on buying nature and perishability of the products, but the market is wide open and an eager audience is at the ready. This study provides clarity about global consumers’ buying intentions for both consumable and nonconsumable categories in the growing e-commerce landscape, which answers important questions for brand marketers and retailers on who is buying what and how they can achieve greater success.

The global ecommerce market is in a state of both expansion and consolidation. More consumers than ever before are buying digitally, and worldwide retail ecommerce sales are rising. At the same time, major international players like Amazon and Alibaba are widening their reach by buying up smaller local platforms, especially in burgeoning ecommerce markets.

  • Revenue in the “eCommerce” market amounts to US$1,474,196M in 2014.

  • Revenue is expected to show an annual growth rate (CAGR 2014-2022) of 10.8 % resulting in a market volume of US$2,464,543m in 2022.

  • The market’s largest segment is the segment “Fashion” with a market volume of US$407,981m in 2014.

  • User penetration is at 24.7 % in 2014 and is expected to hit 48.0 % in 2022.

  • Where the US once held ecommerce supremacy, by 2020 its stake is expected to be 16.9% (down from 22.2% in 2015).

  • Global B2B Ecommerce Sales Dominate B2C

Cumulative data from Statista anticipates a 246.15% increase in worldwide ecommerce sales, from $1.3 trillion in 2014 to $4.5 trillion in 2021. That’s a nearly threefold lift in online revenue.

Numbers of that scale are often hard to wrap our heads around. They’re at once both invigorating … and mind-boggling. If your company is staring down that $4.5 trillion barrel and wondering, “What do we do?” rest assured, you’re not alone. As Harvard Business Review wrote earlier this month:

“Business leaders are scrambling to adjust to a world few imagined possible just a year ago. The myth of a borderless world has come crashing down. Traditional pillars of open markets—the United States and the UK—are wobbling, and China is positioning itself as globalization’s staunchest defender.”

    

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DEVICE DIFFERENTIAL

With a plethora of Internet-connected devices to choose from, there is no shortage of ways for consumers to browse and buy online. And the device of choice is decidedly different around the world.

Computers are the favored device for online browsing and buying among respondents in all regions, but mobile phones are a close second pick for respondents in the Middle East/Africa region and growing in prominence in Asia-Pacific and Latin America. In developing markets, mobile is often the first-access device to the Internet. Tablets—which have been available for just four years, beginning with the 2010 introduction of Apple’s iPad—are used by nearly one-third (31%) of global respondents for online shopping.

North America (84%), Latin America (82%) and Asia-Pacific (81%) boast the largest percentages of respondents using a computer to shop online, exceeding the global average of 80%. European respondents come up just below the global figure at 78%. Survey respondents in the Middle East/Africa reported the lowest computer usage at 60%. Mobile phone usage is strongest in the Middle East/Africa, with 55% of respondents using the device for online shopping—11 percentage points higher than the global average of 44%. Similarly, mobile phone usage is popular in Asia-Pacific (52%) and Latin America (48%). One-third of European respondents (33%) and more than one-fourth (27%) of North Americans use their mobile phones to shop.

While tablets are currently less popular than other devices for shopping online, their portability and large-screen features are conducive to online shopping. As penetration of these devices continues to grow, so too will online shopping usage. Tablet usage in the Middle East/Africa (38%) and Asia-Pacific (35%) eclipse the global average, followed by Latin America (29%), North America (26%) and Europe (24%). Countries where tablet usage is strongest include Egypt (46%), Saudi Arabia and Finland (44%), India (41%), Indonesia and United Arab Emirates (39%).

THE TIPPING POINT FOR ONLINE CONSUMABLES

Little things can make a big difference. When it comes to growing an online shopper base for consumable categories, knowing what drives behavior is vital to increased engagement. And, of course, not all shoppers want the same things. While some shoppers treasure convenience and are less risk averse, others need research and reassurance before making a purchase.

Still others are bargain hunters, always on the hunt for a good deal. And then there are the skeptics. For these cynical shoppers, overcoming negative online perceptions can be the difference between a doubter and a devotee. Regardless of shopper classification, when it comes to shopping online for consumable products, the experience must be convenient, cost-effective and safe. Companies that address these critical components will be best-positioned for online success.

SHOPAHOLICS

Online shopping for these global respondents is convenient (76%) and fun (64%). They like getting email notifications from retailers (46%), and they manage their grocery lists using a mobile app or via an online tool (35%). As these shoppers represent active online participants, marketers should leverage a full suite of online strategies to keep them engaged. Offering tools that remember past purchases, and providing flexible return policies and pick-up options will help keep these shoppers coming back for more.

RESEARCHERS

Knowledge is king for these global online shoppers who like to read online reviews prior to purchasing a product (71%). They spend a considerable amount of time researching products before buying (61%). Social media is a helpful tool in reaching these consumers who often connect with friends, family and strangers to help make purchase decisions (43%). To satisfy their need for knowledge, offer detailed product descriptions and product images. Posting review forums and product reviews will help to build trust.

SAVERS

Savvy savers are always on the hunt to find the lowest prices. These global shoppers believe they get the best prices online (60%), and they find deals that are better than those offered in the store (54%). They subscribe to product and store emails to stay informed and to save money (54%), and they use price-saving apps or websites when planning a shopping trip (47%) and when in the store (42%). When reaching these consumers, consider pricing and promotion strategies that are competitive with or better than in-store offerings. Offer online coupons and free shipping delivery options to help keep costs low for these shoppers.

SKEPTICS

Privacy and security are worries for these global respondents who are wary of giving their credit card information online (48%). To help alleviate concerns, assure shoppers that their information will be kept confidential by including security notifications at checkout. Shipping costs (38%) and confusing websites (33%) are other barriers for these skeptical shoppers. Free shipping is important here, too, as is clarity of presentation. To increase digital engagement, then, retailers must deliver on multiple shopper needs for lower prices, quality choices and peace of mind. Easy-to-navigate websites that offer a wide selection of welldescribed, unique products with plenty of images and have proper security protocols are a must.

 Retail Ecommerce’s Global Spread Makes International Sales Non-Negotiable

According to Business.com, the 10 largest ecommerce markets in the world are …

  • China: $672 billion

  • United Kingdom: $100 billion

  • United States: $340 billion

  • Japan: $79 billion

  • Germany: $73 billion

  • France: $43 billion

  • South Korea: $37 billion

  • Canada: $30 billion

  • Russia: $20 billion

  • Brazil: $19 billion

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More vital than market size is understanding market fit. Thankfully, Nielsen’s Global Connected Commerce report provides a detailed breakdown of the most lucrative industries by country:

Domestic Shoppers Look Beyond their Borders When They Go Online

One of the simplest ways to begin testing and entering foreign markets is to prioritize online advertising abroad. This approach requires you to take an international approach to AdWords, Product Listing Ads (PLAs), Facebook, and Instagram … but it doesn’t demand creating multiple storefronts for each location or setting up full-scale international warehousing and fulfillment.

Why?

Because, as Nielsen’s Connected Commerce Report found:

“Shoppers are increasingly looking outside their country’s borders, as more than half of online respondents in the study who made an online purchase in the past six months say they bought from an overseas retailer (57%).”

Overseas purchases were in the majority on all but one continent: North America. And — for most of you reading this — that’s where you’re already successfully operating.

Online Payment Preferences Vary Around the World

Online payment methods weigh heavily on buying decisions and local preferences vary depending on the country.

Still, it’s easy to overlook how people pay. Cultural-centricity blinds us to the differences in buying habits. Without carefully considering the data, we default to whatever payment methods have been working for us domestically.

It’s no surprise that in North America, credit cards are number one by a mile. Digital payment systems like PayPal and Apple Pay are a close second. At the global scale, credit cards — 53% — and those same digital payment systems — 43% — also dominate.

Unlike North America, cash on delivery is the number one choice in Eastern Europe, India, Africa, and throughout the Middle East. Similarly, enabling direct debit is a must if your target markets include India, Africa, and both China as well as Southeast Asia and the Pacific (listed as “Asia” above).

For some, the differences in preference are small. For others, the gap is wide. Wherever you’re planning to head next or have already set up shop (digitally speaking) sensitivity to payment methods is second only to the next trend we’ll look at.

It’s Time …

If there’s one thing all the above data points, reports, guides, and trends reveal, it’s that global ecommerce isn’t a choice; it’s a necessity.

The future of your company’s growth depends on it. Maybe even its survival.

Whether the struggle you’re facing is internal buy in or external how to, we’re here to help.

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2018-09-30T06:47:31+00:00 November 9, 2016|

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