Lack of Complete Trust & Limited Relationship with the Customers
Online retailers will have to work extremely harder to establish faith and trust with their online customers, as there is limited personal interaction with the customers in addition to several retailers competing online for occupying their space in the market. These factors are anticipated to operate as major restraints to the growth of the market over the forecast period.
The growth of the global online retail market is driven by factors such as easy access to internet on account of rise in the sales of smartphones, increasing use of debit cards for transactions and growing investment in logistics and warehouses. Many organizations have concentrated their focus on scaling up order fulfillment systems and proper responses provided, expansion made to cover target customers from other regions apart from domestic customers through several ways such as partnerships with any international company and many more are anticipated to boost the growth of the sales and the market. Similarly, several online marketing tools are being utilized in order to target new customers as well as existing customers. CLICK TO DOWNLOAD SAMPLE REPORT
The global online retail market is anticipated to grow at a significant CAGR over the forecast period i.e. 2020-2027. The market is segmented by product and by distribution channel. On the basis of product, the market is segmented into apparel, furniture, fashion, electronic items and others, out of which, apparel forming part of product segment is anticipated to occupy the largest market share, on account of significant rise in sales of apparel globally.
Increased Penetration Of Internet And The Rise In The Number Of Smartphone Users
The growth of the global online retail market is driven by various factors such as the rise in the number of internet users globally across every region and increasing penetration of internet covering almost every region across the globe. Increasing number of individuals are opting to conduct online transactions over the internet as they are feasible and can be completed quickly within minutes as compared to traditional modes of payment. The number of smartphone users have seen a significant rise over the last decade globally, owing to a general improvement in the revenues and standard of living of the population across the globe and reduction in the prices of smartphones globally. GSMA Intelligence, a trade body representing the interests of mobile network operators worldwide has estimated that the percentage of smartphone connections are anticipated to increase globally from 60% in 2018 to 79% in 2025.
Increasing Investments in E-Commerce & Shifting Trend Observed Towards Marketing & Conducting Online Sales & Purchases
The online retail market is anticipated to grow rapidly, owing to the increasing investments in E-Commerce made in the last few years. Moreover, changes observed in the consumer buying patterns and general population becoming attracted towards conducting their transactions online through the internet by use of smartphone apps from their smartphones which saves time, effort and money is driving the growth of the online retail market. During the year 2018, E-Commerce and consumer internet companies in India had received more than USD 7 billion by way of private equity and venture capital funding. All these factors are anticipated to drive the growth of the market over the forecast period.
Our-in depth analysis of the global online retail market includes the following segments:
By Distribution Channel
On the basis of regional analysis, the global online retail market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. The market in North America occupied the highest market share and the United States of America was ranked first among the list of countries with revenues from online sales touching USD 9 trillion that were three times higher than in Japan and more than four times higher than that of China. The market in Asia Pacific region is anticipated to grow at the fastest rate, with countries such as China, Japan and India predicted to achieve sizeable revenues over the forecast period. The presence of a huge population in countries such as China and India with rising number of urban middle class possessing higher disposable incomes and their attraction towards transacting online for purchases of retail goods is anticipated to drive the growth of the market over the forecast period. IBEF, a trust established and operating under the Ministry of Commerce and Industry, Government of India has projected the Indian E-Commerce market to reach USD 200 billion by 2026 from USD 38.50 billion in the year 2017.
The global online retail market is further classified on the basis of region as follows:
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Anil Kumar, Ipsheeta Dash