In a rapidly evolving digital landscape, eCommerce continues to assert its dominance with staggering growth potential. Recent data reveals that despite its already massive presence of 28% of business being conducted online, eCommerce is set to experience vertical expansion.
E-Commerce Set for Vertical Growth
The rise of eCommerce has revolutionized the way consumers engage in commercial transactions. With convenience, accessibility, and an extensive range of products, online shopping has become increasingly popular among individuals seeking hassle-free purchasing experiences.
However, despite its remarkable success, recent data shows that the potential for further growth remains substantial.
The eCommerce market is projected to reach a revenue of US$3.65 trillion in 2023, with an expected growth rate of 11.22% annually. China leads in revenue generation, expected to reach US$1.308 trillion in 2023. By 2027, the number of eCommerce users is estimated to reach 5.29 billion, with a user penetration rate of 66.6%.
The average revenue per user is anticipated to be around US$829.50. These figures highlight the substantial growth and potential of the eCommerce industry.
These projections indicate the immense growth potential and the increasing influence of the eCommerce sector, with significant revenue streams, expanding user bases, and rising user engagement in the coming years.
What Are The Key Drivers of E-commerce Growth?
The growing accessibility and affordability of the Internet have led to an increase in the number of people with Internet access. This has opened up new markets and opportunities for e-commerce businesses to reach a larger customer base.
By 2022, the global number of internet users reached an estimated 5.3 billion, a rise from 4.9 billion in the previous year. This accounts for about 66 percent of the global population.
The increase in internet usage can be attributed to factors such as improved access to computers, the overall modernization of countries worldwide, and the widespread adoption of smartphones.
However, it’s important to note that internet penetration rates vary depending on the level of communication network development in each country. As of January 2022, China had approximately 1.02 billion internet users, while the United States had 307 million.
Mobile Device Adoption
Additionally, the widespread use of smartphones and tablets has made it easier for people to access the internet and shop online. Mobile devices provide convenience and flexibility, allowing consumers to browse and purchase products anytime and anywhere.
According to Retail TouchPoints, over 90% of consumers utilize their smartphones while shopping. The survey reveals that approximately 54% of consumers use their devices to compare prices, while others seek product information (48.4%) and read reviews (42%).
In 2022, mobile commerce (m-commerce) sales were projected to reach $415.93 billion, accounting for 6.0% of total retail sales for the year. Insider Intelligence predicts that m-commerce sales will increase to $534.18 billion in 2024, representing 40.4% of total e-commerce sales.
Improved Payment and Security Systems
The development of secure online payment systems and the implementation of robust security measures have significantly increased consumer confidence in e-commerce. As a result, more people are comfortable making online transactions, leading to increased e-commerce sales.
According to Oberlo, 49% of users worldwide regularly use digital payments for online purchases and shopping.
Social Media Influence
Sales through social media platforms
Social media platforms have become powerful marketing channels for e-commerce businesses. Influencers and online communities play a crucial role in driving product discovery and promoting brands, leading to increased online sales.
According to Statista’s online data, sales through social media platforms worldwide are projected to reach $1.298 billion in 2023. The popularity of social media as a sales channel continues to grow, and further predictions suggest that it will nearly triple to approximately $3 trillion by 2026.
Convenience and Time-Saving
E-commerce offers convenience and time-saving benefits to consumers. With online shopping, customers can browse and compare products, read reviews, and make purchases without leaving their homes. This convenience factor has led to a shift in consumer behavior, with more people choosing to shop online rather than visiting physical stores.
According to big commerce, with the increasing importance of convenience for consumers, it is logical that more than 75% of them are engaging in online shopping on a monthly basis. Oberlo asserts that approximately 80% of consumers shop at least once a month
As per Smart Insights, 52% of shoppers have stated that convenience plays a significant role in influencing at least half of their purchases. The modern consumer no longer has the luxury of spending excessive time on tasks like grocery shopping or searching for clothing.
With time becoming a precious resource, convenience has emerged as the primary factor driving consumer decision-making.
The Global Reach
Moreover, e-commerce has eliminated geographical barriers, allowing businesses to expand their reach beyond local markets. With international shipping and cross-border e-commerce, companies can tap into a global customer base and explore new markets, leading to significant growth opportunities.
In 2021, the global cross-border B2C e-commerce market was valued at USD 719.02 billion. It is projected to grow at a compound annual growth rate (CAGR) of 25.8% from 2022 to 2030.
Wide Range of Products and Improved logistics
E-commerce platforms offer a vast range of products and services, often exceeding what is available in physical retail stores, thus, attracting customers.
The advancements in logistics and fulfillment services have made it easier and more cost-effective for e-commerce businesses to handle order processing, shipping, and returns. Efficient logistics systems ensure timely delivery, which enhances customer satisfaction and encourages repeat purchases.
Continuous technological advancements, such as artificial intelligence (AI), machine learning, augmented reality (AR), and virtual reality (VR), have enriched the e-commerce experience. These technologies enable personalized recommendations, virtual try-ons, enhanced product visualization, and interactive customer support, all of which contribute to the growth of e-commerce.
Google Shopping Virtual Try-on with AI
As businesses brace themselves for the impending vertical growth of eCommerce, industry leaders emphasize the importance of embracing digital transformation.
Investing in robust online platforms, optimizing user experiences, and leveraging data-driven insights will be crucial for organizations aiming to thrive in this new era of commerce.
In conclusion, eCommerce’s remarkable growth trajectory is set to continue, as online business activities currently comprise only 28% of the overall market. The stage is set for vertical expansion, presenting businesses with tremendous opportunities to capitalize on the booming digital economy.
Adaptation and innovation will be key to success as the eCommerce landscape evolves, shaping the way consumers shop and businesses operate in the years to come.
- 10 Reasons Smart Small Business Owners Opt for Ecommerce
- 80+ eBay Statistics You Need to Know June 2023 – Revenue, Products, and More
- Ecommerce hacks – Banking and payment providers
What's the Best Crypto to Buy Now?
- B2C Listed the Top Rated Cryptocurrencies for 2023
- Get Early Access to Presales & Private Sales
- KYC Verified & Audited, Public Teams
- Most Voted for Tokens on CoinSniper
- Upcoming Listings on Exchanges, NFT Drops