Online Retailers

Online shopping is a large section of the retail industry. The online retail industry generates about USD 741 billion a year and comprises around half of the total sales of the retail industry, but is still considered to be relatively small. Online retail is growing exponentially and in the near future it is expected to be the most dominant sector of the industry. Online retail is the most convenient, affordable and accessible segment of the retail industry due to its speed and the wide variety of goods. Moreover, the customer is able to buy the product online within a short time frame and the products are delivered with minimal fuss. There are also many e-commerce platforms which make online shopping very efficient.

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In 2016, the retail sales volume of the online retail industry stood at US$19.7 billion which represents a growth of 8% in comparison to 2015. However, the online retail industry is also facing competition from offline retailers like B2C, B2B, retail, e-commerce and online. Also, consumers have become more aware about online purchases through online channels, which has led to increasing number of consumers looking for online retailers and therefore, increasing number of retailers in the market.

The growth of online retail industry is primarily driven by three major factors namely, consumer’s convenience, customer experience and cost of ownership. As online retailers grow, their penetration rate will increase and their market share will increase. Further, in comparison to offline retailers, the retail online retailers are able to leverage the benefits of the Internet for their business, particularly in terms of customer experience and marketing strategies.

The following table summarizes the key points of the eCommerce market for the year 2016.

Market Size, By Regions 2016 2016 % Growth 2016-2016 (in millions of $) North America $ 6,823,700 21.2 % Asia Pacific 3,832,100 20.7 % Latin America & the Caribbean 2,742,500 19.8 % Europe 5,543,100 27.8 % Middle East & Africa 628,700 13.9 % Greater China 1,077,900 9.6 % Total $ 20,914,200 100 %

The growth of the eCommerce market in 2016, and the growth of the overall market for the year, depends on the country of origin, with China leading the charge. The eCommerce market grew more than 70% in China over the past year, and the market is expected to be worth $22 billion by 2020. In the past two years, eCommerce was valued at $1.7 billion.

On the opposite end of the spectrum is the United States, where the eCommerce market declined by 15% in the last year. The American market is expected to grow by 9% over the next five years, and the eCommerce market has a growth potential of $3 billion by 2020. The eCommerce market in the US is currently valued at $1.2 billion, more and more customers visit websites like the one at everyday just to find the best offers online.

While eCommerce growth is generally positive, the growth in the country is slower than that of other countries. India has a market potential of $1 billion by 2020, but the market is less crowded and is expected to grow by 6% over the next five years.

In the US, the eCommerce market is expected to be valued at $25 billion by 2020. With a growth potential of 10%, this market is expected to be the largest.

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