The global retail e-commerce market was valued at USD 4.22 trillion in 2020 and is projected to reach USD 8.3 trillion by 2028, expanding at a CAGR of 9.2 % during the forecast period, 2021 – 2028. The growth of the market is attributed to rising usage of smartphones and ease of buying daily needs products from the home.
E-commerce refers to the purchase or sale of goods or services on computer or any mobile device. Goods or services are ordered online but the payment and the delivery of goods are done online or offline. Augmented reality (AR) has acquired popularity among retailers and majority of brands have started integrating this technology to gain a significant position in the competitive market. Machine Learning (ML) and AI are assisting e-retailers to recognize customer demand and promote these technologies by making personalized guidelines and smart product recommendations. AI and chatbots voice assistants are incorporated in the apps to provide easy shopping facility with real time interaction.
Market Trends, Drivers, Restraints, and Opportunities:
- Availability of products at low prices as compared to physical stores drives the market.
- Internet helped the retail industry to increase their reach from local areas to abroad, thus increasing the cross-border business.
- Increasing demand for enhanced customer experience with voice recognition is projected to drive the market during the forecast period.
- Customers are using smart speakers for online orders in the US, as orders placed through voice provide efficient search results. This factor fuels the market.
- E-retailers are investing in augmented reality (AR) to provide high-quality customer experience.
- AR technology is user-friendly and assists customers to visualize the selected items. Such developments in technology are estimated to fuel the market.
- Advancement of mobile from calling to browsing and increasing penetration of internet drives the online retailing market.
- Growing disposal income and increasing usage of smartphone users worldwide drives the market.
- Sellers indulging in online sales offer desktop browsing and mobile friendly versions to attract customers.
- Rising usage of smartphones in small towns and cities is projected to increase sales of retailers through e-commerce platform.
- AI technology makes it easier to imagine the look of a product before purchasing it by allowing users to walk through a virtual trail of clothing, shoes, and frames. This, in turn, helps the retailers to enhance customer conversion rate.
- Security concerns about the collection of personal data on websites are hampering the market growth.
- Misuse of personal and financial data of the consumer is expected to hinder the market growth.
- The ongoing pandemic led to temporary shutdown of distribution and production centers. This factor is anticipated to obstruct the market growth.
- Demand for the grocery segment increased, due to rising purchase of essential goods during the covid-19 pandemic. This boosted the e-retail segment during the forecast period.
Market Segment Insights:
The apparels and accessories segment held a major market share of more than 30.2% of the total revenue in 2019
Based on products, the global rertail e-commerce market is segregated as apparels and accessories, groceries, footwear, furniture and household décor, personal and beauty care, electronic goods, and others. The apparel and accessories segment is expected to expand at a rapid pace during the forecast period. Availability of latest fashion and designer apparel on e-commerce platforms at factory prices is driving the segment. E-retailers are gaining popularity, due to easy return policy and cash on delivery offered, which in turn, is attracting customers and building customer trust. Platforms such as Shopify, Facebook, and Instagram link their online stores with their social media accounts to reach maximum customers. The apparel and accessories segment is expected to be negatively affected during the pandemic, as consumers are shopping only for essential products.
The grocery segment is projected to expand at a robust CAGR of 13.06% during the forecast period. Demand for online purchase of grocery increased, due to the ongoing pandemic. Growth in the grocery segment is attributed to contactless purchase and ease of shopping from home. This trend is expected to lead to a permanent shift towards digital purchases. Increasing demand for online grocery led to employment of workforce by vendors such as Amazon, Walmart, CVS, Albertsons, and Dollar General. Factors such as affordable pricing, time-saving, and availability of variety of choices for shopping is projected to boost the market during the forecast period.
The market in Asia Pacific held a major share of more than 41% of the total revenue in 2019
In terms of regions, the global retail e-commerce market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in Asia Pacific is expected to expand at a rapid pace during the forecast period, owing to changing lifestyles and rising usage of mobile internet. People in the region follow a work-oriented culture. This decreases personal time and increases the demand for the e-commerce segment. Additionally, consumers are steadily shifting towards purchase of online electronic goods over the e-commerce platform. China is considered as a key market for C2C vendor-driven and second-hand product selling. Presence of major market players such as Motorola, OnePlus, Lenovo, and Motorola is expected to boost the market.
The market in North America is expected to expand at a substantial CAGR during the forecast period. Growth of the market in the region is attributed to changing buying patterns, increasing consumer preference, and secured internet transactions. Online sales in the region increased between the end of January and beginning of March 2020. Vendors with online platforms are expected to benefit from stockpiling. The market in Europe is expected to expand, owing to high-speed internet facilities and well-established supply chain of food delivery in the region. The e-commerce platform is estimated to expand at a high CAGR, due to increasing purchase of disinfectants, hand sanitizer, packaged water, toilet paper, hand soap, and tissues.
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