Two things have boomed in the past 5 years or so – one is technology, and the other is eCommerce. At Emberify, we’ve been studying the technology trends extensively. But it is also interesting to look at the trends in the eCommerce sector, because it ultimately provides the impetus for the advancement of technology.
The biggest names in the business world today have been associated with the eCommerce arena, and in this article, I try and delve into the biggest players of this game – Amazon, eBay and Alibaba.
THE ECOMMERCE BOOM
First things first, how exactly is the eCommerce sector booming? I mean yes, there have been a lot of sites mushrooming here and there, and there have also been acquisitions made frequently by these firms. But the true extent of the boom can be visualised in the form of the populus which relies on online shopping.
The following graph is a depiction of the worldwide digital buyer penetration. What this essentially implies is the percentage of digitally connected people who shop online.
As the graph indicates, the figure of 38% seen in 2011 grew to 42.70% in 2014 and is projected to grow to 47.30% by 2018. Simply put, in 2018, 47.30% of all people with an internet connection would have shopped online.
Now on paper, these numbers don’t really mean much, do they? An increase of 38% to 42.70% hardly accounts for much. However, things become clearer when one looks at the net worldwide sales projection.
Net eCommerce sales worldwide accounted for $1.233 trillion in 2013, while the figure is expected to almost double itself by 2018. With these mind boggling numbers, it’s quite a given as far as the scope of eCommerce in the future is concerned.
FOCUSING ON THE PLAYERS
Talk about eCommerce giants and one of the first names that comes to mind is Amazon. Set up way back in 1994, the Seattle based corporation has established itself as the world’s largest online retailer. They have also expanded their operations to hardware devices – in the form of the Kindle tablet line and the Fire phone.
They also have a dedicated app store and have operations in many countries – including growing countries such as India. All in all, they’ve made sure that they grab all the headlines in the eCommerce world.
Their growth in the eCommerce sector can be visualised – quite literally – as an exponential curve. 2014 saw the net sales from their eCommerce portals stand at a whopping $88.99 billion.
The main reason for their rampant growth has been their association with big brands. Obviously, a trust factor comes into play here, and consumers are offered products from big brands at reasonable prices on Amazon. Moreover, with services such as Amazon Prime – which offers delivery within a day or two – and other ingenious delivery services (the drone one, specifically), Amazon has truly stood out.
eBay stands out in not just B2C, but also C2C sales and services. They’ve provided a platform of sorts for consumers all across the world to hold auctions and sell their own items online, while at the same time also providing a marketplace for retailers to sell their wares.
Their growth has also been exponential in a way, and although the figures haven’t been as high as Amazon’s it is interesting to note the trendline. Their sales revenue at the end of Q4 2014 stood at $4.921 billion, which is quite a huge feat in itself.
Alibaba Group Holding Limited can be considered as China’s leading online eCommerce provider, specialising in B2B, B2C and C2C eCommerce services. Besides eCommerce, the group has also made its name in cloud infrastructure services and has also associated itself with China’s biggest online video site Youku Todou.
Their annual revenue has also been consistently rising, with their 2014 figures standing at 52.5 billion yuan, which translates to approximately $8.46 billion.
(You can also read up on my take on Flipkart’s trends in this article)
A comparative study can be taken from Google Trends, wherein I’ve entered Amazon, eBay and Alibaba as the main centers of focus.
Another comparison can be made from the number of active users for the three eCommerce providers. I’ve provided only the data for Q4 2014, and in this statistic Alibaba leads by a huge margin.
I’ll wrap things up with a final statistic which depicts the market penetration of the largest online retail and auction sites in May 2014, as measured in global internet reach. Unsurprisingly, Alibaba leads the pack here as well.
Without a doubt, eCommerce will account for a major chunk of business transactions in the coming years. Already, this trend has promoted the growth of internet services, especially over mobile. And the growth in the mobile sector will in turn encourage the eCommerce sites to gear up.
I predict a cut-throat competition in the eCommerce sector of a much higher order in the days to come. And honestly, it will be quite interesting to see how things turn out!