E-commerce Market Size, Share & Trends Analysis Report By Model Type, By Region, And Segment Forecasts, 2020 - 2027
2022-02-21 14:35:00
Report Overview
The global e-commerce market size was valued at USD 9.09 trillion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027. Increasing penetration of internet is bolstering the smartphone using population across the world. Digital content, travel and leisure, financial services, e-tailing among others constitute a variety of e-commerce options available to the internet accessing customer base that are gaining momentum with increased internet usage. Hence, technological awareness among customers is expected to have a positive impact on market growth. The growing importance of faster browsing has led to the development in the connectivity, thus leading to development in 4G and 5G technology.
Implementation of 4G and 5G technology for the connectivity purpose is expected to have a positive impact on the market growth as it provides an uninterrupted, seamless experience to the user. Moreover, the adoption of smartphones is gaining momentum at a significant rate, thus increasing the exposure of online shopping for the customer. Therefore, the growing use of smartphones is projected to propel the market growth over the forecast period.
Increasing number of small and medium enterprises is also projected to escalate the demand over the forecast period. Small and medium businesses are growing at a significant rate, especially in India, South Africa, and Russia. Initiatives such as Make in India and Start-up India have led to an increased number of start-ups in the country, which adopt the online marketplace for business, thus powering the market growth. Moreover, increasing consumer wealth is estimated to propel the market growth over the forecast period.
Established organizations and large enterprises are leaning towards online business due to lesser expenditure in communication and infrastructure. E-commerce offers the organization an easier reach for the customers, and hence necessary exposure to business is also achieved. E-commerce is also driven owing to the increasing importance of online marketing tools, such as Google ads and Facebook ads. Nowadays, the marketing options are in abundance due to the popularity of social media applications, which, in turn, helps in driving the market for e-commerce towards growth trajectories.
Furthermore, due to the on-going COVID-19 pandemic, customers’ inclination towards online shopping is rising since brick and mortar shops are closed. Major economies such as U.S, China, India, and Italy are severely affected due to pandemic. Hence, the evident impact on the market is projected in regions such as Europe and North America. For instance, as per the data provided by Emarsys and GoodData, revenue earned is up by 37% and orders are up by 54% since January in U.S. However, lack of implementation of technical infrastructure in the rural areas of countries, such as India, China, and Brazil, is expected to cause hindrance in the market growth.
Model Type Insights
In terms of revenue, Business to Business (B2B) dominated the market for e-commerce with a share of 63.1% in 2019 and is expected to witness the fastest growth from 2020 to 2027. This is attributed to the growing inclination of the companies towards online selling and buying of goods and services. Furthermore, increasing penetration of smartphones, coupled with internet usage, is anticipated to drive the B2B e-commerce segment over the forecast period.
The business to business e-commerce comprises the buying and selling of goods and services between business corporations. Moreover, B2B platforms offer companies with new possibilities of buying and selling the products, thus reducing the operational as well as inventory costs. This is anticipated to bolster the segment growth over the forecast period. Rise of specialized or vertical marketplaces in B2B e-commerce is generating avenues for the market. The vertical marketplaces offer a wide range of products in a product category. Similarly, specialized marketplaces provide value-added services, such as quantity discounts, and multiple payment options.
Inclination of companies towards selling and buying of goods and services through the B2B e-commerce platform can be clearly observed worldwide. Businesses preferring B2B e-commerce platforms follow either the marketplace model or direct model to conduct their business. The marketplace model involves companies selling their products on a common platform alongside their competitors, while the direct model involves companies setting up their private B2B platforms and selling directly to the buyers.
Increasing acceptance of technology is allowing the e-commerce sector to be more efficient and reachable. Growing middle-class population and intense use of social media are also aggravating the demand for online purchasing of various products and services, thereby positively impacting the Business to Consumer (B2C) segment growth. The internet has transformed the way people sell and buy goods and services. E-commerce or online retail is changing the shopping experience for customers. Banks and other players in the e-commerce industry are allowing a safe and secure online platform to pay easily via payment gateway. Market players are focusing on unique changes to their business models in order to enable sellers and consumers to transact online. The leading retailers in the market are trying to complement their traditional retailing with online commerce and tying up with other major e-commerce players.
Regional Insights
Asia Pacific dominated the market for e-commerce with a share of 55.3% in 2019 and is expected to witness the fastest growth from 2020 to 2027. This is attributed to a growing preference among businesses to carry out businesses through the B2B e-commerce platform. Furthermore, developing infrastructure facilities and surging the number of internet users are expected to fuel the regional market growth.
Furthermore, the region is expected to witness a rise in demand for B2B e-commerce adoption, which can be attributed to smartphone proliferation. Additionally, the Chinese market is going through a consumer revolution, wherein international products are taking benefit of innovative marketing, research techniques, and advertising. Brand consciousness is getting more importance in attracting Chinese consumers. Luxury goods and service providers are witnessing significant growth in China.
North America and Europe are anticipated to witness steady growth over the forecast period. U.S. consumers are open to foreign brands and products. They are more aware of overconsumption and the environment. Consumers are very specific about the quality of the product, its composition, and its price. North America has one of the highest internet penetration rates. Middle East and Africa and Latin America are expected to witness significant growth in the forthcoming years owing to the growing young population and rapidly evolving online shopping market.
Key Companies & Market Share Insights
The market is fragmented and is expected to face extreme competition in the coming years. Many players are implementing various strategies to sustain their presence in the market for e-commerce. For instance, in September 2018, Flipkart completed its acquisition of Upstream Commerce, an analytics start-up based in Israel. This acquisition is expected to benefit Flipkart Pvt. Ltd. to price and position its products in an economical way. Business expansion through strategic partnerships, mergers, and acquisitions remains the premiere strategy of players operating in the e-commerce industry. For instance, in September 2019, Alibaba Group Holding Limited announced the acquisition of NetEase, Inc., a company offering online e-commerce services. This acquisition enabled Alibaba Group Holding Limited to acquire NetEase’s import e-commerce platform known as Kaola and also gain a competitive edge in the e-commerce industry.
Some of the prominent players in the global e-commerce market are:
· Amazon.com, Inc.
· JD.com, Inc.
· Apple, Inc.
· Alibaba Group Holding Limited
· Flipkart Private Limited
· Walmart, Inc.
· eBay, Inc.
· Best Buy
· The Home Depot
