The rise of e-commerce
E-commerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services on the Internet and the flow of money and data to carry out such purchases. E-commerce is sometimes used to refer to the selling of physical goods online, but it may also characterize some form of commercial transaction that is mediated through the internet.
Although they sound almost the same, e-business and e-commerce are totally different things. The first one refers to all aspects of operating an online business, while the second refers strictly to the transaction of goods and services.
Today’s topic dates back to the 90s, when a man sold a CD by Sting to his friend through his website called NetMarket, an American shopping portal. On August 11, 1994, the first case of a customer purchasing from a company via the World Wide Web was recorded and ever since then, the world took a major step into digitalization. E-commerce has developed in order to make everyday items easy to find, analyze and buy through online stores and markets. Independent freelancers, small companies and major corps have all benefited from e-commerce, as it allows them to market their products and services on a rate that was not achievable with traditional offline shopping before.
E-commerce is usually split into three different types depending on the form of individuals participating in the transaction. Broadly speaking, the business models are:
1. Business to Business (B2B) - B2B happens when companies sell to other companies. This is characteristic of stationery stores that offer bulk office supplies to companies.
2. Business to Consumer (B2C) - B2C is the most widely considered market concept in which merchants sell a limited volume of products to customers.
3. Consumer to Consumer (C2C) - C2C is a fairly recent market concept where customers who have already bought things are trying to resell the item to another customer.
Online shopping is growing so fast that the size of the global online shopping market is projected to reach 4 trillion in 2020. The plan is to see 300 million online shoppers in the US alone in 2023. To understand how huge that is…well…that's 91% of the population of the entire country! As a matter of fact, in 2018, an estimated 1.8 billion people worldwide purchased goods online (Statista, 2018). In the same year, global e-retail sales amounted to $2.8 trillion.
So far, 69% of Americans have shopped online, and 25% of Americans buy online at least once a month. Many (59%) of these shoppers purchased clothes and 47% ordered their first purchase from Amazon.
However, Americans aren’t the only ones who prefer to shop online. People all over the world understand the benefits and use it regularly. According to Invesp, the countries with the leading average eCommerce revenue per shoppers are: USA ($1,804), UK ($1,629), Sweden ($1,446), France ($1,228), Germany ($1,064), Japan ($968), Spain ($849), China ($626), Russia ($396), and Brazil ($350).
If you're interested in doing business online, it's vital to stay up to date with the latest e-commerce numbers, because we all know that the best way to analyze any business field is through hard facts and details.
99Firms’ Ecommerce Statistics for 2020 prove that ecommerce is growing at a steady pace all over the globe. We’ll go through a few of their predictions in order to understand how fast this industry is moving (more info can be found here: https://99firms.com/blog/ecommerce-statistics/):
· It is expected that by 2040, 95% of all purchases will be via ecommerce.
· The world’s fastest-growing ecommerce market is China with an estimated ecommerce value of $672 billion in 2017.
· The US has the highest ecommerce penetration rates, with around 80% of all internet users making at least one purchase.
· The top reason why people make online purchases is that they can shop whenever they want, 24/7.
· Around 43% of ecommerce traffic comes from Google search (organic).
· Slow-loading websites see an abandonment of 75%.
Now that we have managed to get a better sense of understanding regarding this field, it’s time to find out what are the top 5 giants in terms of ecommerce in 2020. Many of these companies are easily recognizable and can be named immediately without even seeing the following list.
1. AMAZON - Amazon doesn't require some sort of presentation. In 1994, Jeff Bezos created the organization (the richest man in the world) as a book marketplace. From this modest beginning, Amazon has now become the biggest revenue-generating e-commerce corporation and potentially the largest retail conglomerate in the world.
2. ALIBABA - Founded in 1999, this ecommerce giant originated from China. Jack Ma started Alibaba to make it the biggest online wholesale marketplace. It not only caters to consumers, but also to retailers. Think of a product and the odds are that Alibaba has several distributors selling this product in various versions. Alibaba also has other platforms like Aliexpress, Alipay and Taobao.com.
3. EBAY - Founded in 1995, the company was one of the first successful dot-com-bubble survivors to revolutionize online shopping. That's why the logo has a red-blue-green-yellow mix. The e-commerce website offers a portal for C2C and B2C purchases. Users will join in and share their items for sale, for other users to see. eBay has a range of product categories that cover almost everything.
4. JINGDONG - Many of us living in a western world didn’t even heard of this eCommerce giant! Rivaled by the more popular Alibaba, Jingdong has more than a quarter of a billion registered users as of 2018. It was founded in 1998 and started trading online six years later. Today, the company is introducing its high-tech distribution program, comprising of drones, AI, and a drone fleet.
5. RAKUTEN - Rakuten is a Japanese eCommerce company that was launched in 1997. In addition to online shopping and credit card payments, they operate Japan's largest online bank. In all, the Rakuten Group operates some 70 companies, ranging from the widely used Viber instant messaging app (as officially known as Rakuten Viber in 2017) to the FC Barcelona jersey logo.
These are the 5 largest and most popular ecommerce companies you can find online today. Sure, there are many more, but we wanted to focus on the essentials. Other well-known ones obviously include: Zappos (shoe store), Home Depot (largest home improvement retail chain), Flipkart (similar to Amazon), Otto (fashion, sports, electronics, and home equipment), Zalando (apparel and shoes), as well as many others that you may have used in your home countries.
All of these e-commerce companies have a huge influence on the online business landscape, thanks to their ever-expanding and increasing business portfolios.
E-commerce growth is projected to stay stable in the next few years, rising even faster than global trade. A significant part of the growth is expected from emerging markets in Asia and Latin America, where population is obviously higher than in any other countries.
We hope you enjoyed this article and if you want to add anything, the comments section is always open!