Online retail is growing in popularity in both developed and developing countries because it brings together a wide choice of branded products on a single website, gives appealing discounts, and provides free shipping. According to the Ecommerce Foundation, a global e-commerce group, online retail sales accounted for 7% of total retail sales in 2015 and are anticipated to reach 17% by 2021. In 2016, the online retail market was estimated at US$ 2,171.22 billion, with a CAGR of 18.28 percent predicted to reach US$ 9,572.96 billion by 2025.
The Asia Pacific is expected to be the largest Online Retail Market for internet shopping, as well as the fastest-growing market. Demand for online commerce in the region is being driven by countries like China, India, and the ASEAN bloc. Furthermore, the region's market growth is being boosted by the region's growing middle-class population, which has increased purchasing power. China's middle class is predicted to grow from 430 million in 2017 to 780 million by 2025, according to Chinese official sources. This area is one of the most important contributors to online sales, and its rapid expansion is expected to propel the online retail market's growth.
The Online Retail Market sector in India was valued at US$ 38.5 billion in 2017 and is predicted to reach US$ 50 billion by 2025, according to the industry trade body Associated Chambers of Commerce and Industry in India (ASSOCHAM). This is attributable to the country's growing internet penetration. The Internet and Mobile Association of India (IAMAI) estimates that the number of internet users in India will surpass 500 million by June 2018. This, combined with robust GDP growth and rising consumer spending power, will make India the world's fastest expanding market for internet retail. In 2016, Flipkart, India's largest e-tailer, reported that tier-2 and tier-3 cities accounted for up to two-thirds of the company's revenues.
In terms of internet and smartphone penetration, North America and Europe are notably advanced. According to World Bank figures, internet penetration rates in North America and Europe were 78 percent and 75 percent, respectively. The movement in customer preference from offline to online retail will drive the market in these regions.
In 2016, the fashion segment dominated the online retail market in terms of product type. In 2016, the segment was worth US$ 347.50 billion, and it is predicted to grow at a CAGR of 13.43% over the forecast period. Because of the increased demand, fashion-specific internet marketplaces have grown in popularity. Zalando S.E. is a corporation located in Germany that operates an online fashion marketplace. In approximately 2017, the corporation brought in $5.5 billion in sales. On its web marketplace, the company offers over 2,000 products. The firm is projected to be a major player in the online retail sector.
Amazon Inc., Alibaba Group, eBay Inc., Otto GmbH & Co KG, JD.com Inc., Groupon Inc., Shopify Inc., Flipkart, Rakuten Inc., and Zalando S.E. are some of the leading competitors in the market.
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