Ecommerce Market 2023: What's the Current Status

15/12/2023

Ecommerce Market 2023: What's the Current Status

It’s a good time to be in eCommerce.

Customers are embracing digital stores like never before and the recent pandemic even compelled 25% of brick-and-mortar stores to start online stores. 

But an increase in e-stores means an increasing competition in the eCommerce market and the businesses that want to stay ahead of the curve need to do more than the basics.

They need to adapt to the changing trends & technology and understand the changing customer preferences. Also, they have to understand the implications of scaling their online business.

It’s important for eCommerce players to know the scope of the market and the factors they need to prepare for.

This article talks about the current status of the global eCommerce market and the top trends shaping the future of the eCommerce market.

Global Ecommerce Market: An Overview

The global retail eCommerce market size is anticipated to grow by 56% by 2026. The market was valued at $5.2 trillion in 2021 and is expected to reach $8.1 trillion by 2026.

Retail ecommerce sales worldwide from 2014 to 2026

Australian eCommerce revenue is expected to grow at 10.40% CAGR and is projected to touch the market volume of $64.18 billion and 21.32 million users by 2027.

Here are the highlights of the eCommerce market growth in some other countries:

  • With a 25.5% growth in sales in 2022, India secures its position as the top five fastest growing countries in the world for eCommerce 
  • The eCommerce market in the UK is also projected to increase by $85.7 billion in the next few years. 
  • Latin America saw an increase in eCommerce sales by 22.4% from 2021 to 2022. 

Because of a low start up cost in terms of communication and infrastructure, even established retail businesses are setting up online sales channels. The growth is not only fueled by smartphones and cheap internet in developing countries but also because of the changing consumer preferences after the COVID-19 outbreak. 

The eCommerce market is driven by the advancements in technology like virtual shopping and augmented reality and initiatives by the government. 

It is resulting in intense competition with many companies investing extensively in logistics, supply chain automation, and marketing strategies to differentiate themselves and increase their customer base. Companies are also focusing more on higher-quality products and offering user-friendly shopping experiences to create a seamless customer buying experience.

Top 9 Global Ecommerce Market Trends

Now that we have an idea of what the eCommerce market looks like, let’s take a look at the eCommerce trends that emerging and existing companies should pay heed to. 

1. Rise of Mobile Shopping

The biggest factor that’s attributed to the growth of eCommerce is the increasing use of smartphones and the internet globally. And this growth isn’t going to slow down anytime soon. Online retail sales through smartphones are expected to account for 6% of total retail sales

What this means for online businesses is putting increased focus on optimising the mobile buying experience. If your eCommerce app isn’t responsive on mobile, you’ll be missing out on a huge number of potential customers. 

Since the whole concept of mobile eCommerce or Mcommerce is based on convenience, ensure that there are sufficient mobile payment methods and visual search is optimised for mobile devices.

2. Increasing Use of AI

Without a doubt, the personalised buying experience is at the forefront of most eCommerce marketing campaigns today. AI tools and machine learning are facilitating personalised shopping experiences through automated data collection. You get to know exactly what the customer is looking for, from where they purchase, when they purchase, and what exactly they’re seeking in a particular product or service. 

Some of the other ways AI is pushing eCommerce sales are:

  • AI-powered chatbots: As businesses scale, so does their customer support team. But with AI chatbots, companies are significantly automating first-level customer support and providing 24*7 support availability.
  • Product recommendation: To bring the online shopping experience closer to a brick-and-mortar one, businesses are integrating product recommendation tools to help customers make a decision while they’re shopping online. AI collects and distributes data and provides recommendations based on customer journeys, preferences, and previous purchases.

3. New Marketing Channels

Now that social media has expanded to multiple platforms, so have the marketing channels for eCommerce. While social commerce was already gaining traction because of Instagram and Facebook marketplace, the more recent channels include Tik Tok shopping.

As more customers prefer to engage with the brand in real-time, video marketing and shopping is changing the online shopping experience for customers. Along with TikTok, live shopping is also gaining popularity in the eCommerce market. It’s similar to the home shopping channels, except the presenter is likely a notable influencer and you can interact with the host in real time.

4. Growing Sales in Asia-Pacific and China

Asia-pacific is leading the troop in terms of eCommerce market growth. Owing to rapid urbanisation, a growing middle-class population, and technological advancements, the demand for online shopping is more than ever and it is estimated to grow at an unprecedented rate. 

China’s online sales market is soaring to new heights with an estimated $2.8 trillion in 2022. It is more than double the US market. It shows that consumers are more open to online retail than they were a few years ago.

While growth is excellent, being in eCommerce also means addressing the challenges of inflation. Globally, inflation is a leading concern for customers. They’re being economical in their decisions, making it problematic for online retailers. The growing competition also doesn’t make it any easier. 

5. Inflation Pressures

To address this, a lot of online stores are optimising their supply chain, automating their processes, and outsourcing logistics to 3PL courier services to save costs where they can. They’re also taking into account the inflation in different countries while scaling into other countries. It ultimately influences the end pricing you have for your products and has a significant impact on your revenue. 

6. The Growing use of Big Data Globally

Before AI, there is data. Data that fuels the AI systems of customer preferences, buying history, and tracking buying journeys for personalized marketing campaigns. No online shopper wants unwanted products targeted towards them. Be it in social suggestions or on the website.

Big data has played a central role in marketing for a while now and it will continue to do so—considering marketers are constantly looking for ways to strike a personal cord. But big data is expected to infiltrate even deeper into the customer journey through sales intelligence tools and niche targeting that helps brands create tailored shopping experiences.

7. Focus on Sustainability

Consumers are becoming more environment conscious, and it’s reflected in their shopping behaviour considerably. They prefer brands that are doing their bit for the environmental sustainability and adapting eco-friendly order fulfilment practices. Studies show that 50% of customers expect sustainability in fashion and more than 75% of the customers want fewer packages to avoid wastage.

For many brands, this has become a competitive advantage and also adds brand reputation along the way. In 2023, we can expect to see more online retailers in the eCommerce market focus on sustainable and ethical sourcing, sustainable packaging trends, and green manufacturing initiatives to reduce the carbon footprint. 

8. Supply Chain Challenges

Customers' expectations are soaring high in terms of delivery times and low shipping costs. Studies show that customers are actively seeking free shipping and it reduces cart abandonment by 18%. Current players in the eCommerce market are also ensuring customers get their deliveries on time, with some delivering as early as within a few hours. 

As a result, managing the supply chain and providing a seamless delivery experience is expected to become challenging. Micro-fulfilment solutions will become more popular to stay closer to the customer and make quick deliveries. Outsourcing of shipping activities to 3PL providers will also increase so that eCommerce brands can shift the burden and focus on other strategic activities.

9. Regional Focus

The eCommerce market has made the world a giant shopping mall. Everyone is shopping from anywhere in the world. Research shows that more than 57% of online shoppers shop internationally. 

Your average customer is no longer an English-speaking person as Asia-pacific is the largest growing eCommerce market. Knowing the current trends, it’s ideal to have a regional focus on your websites. Provide options for users to surf the site in different languages. This can have a lasting impact on the customer experience and create a sense of brand loyalty in any new market that you enter.

Be a Part of the Changing eCommerce Market Trends

The eCommerce market is flourishing. To truly make it in a highly competitive market, it is best to have a market edge in terms of your delivery and shipping. PACK & SEND is known for providing seamless order fulfilment for online stores. Contact us at PACK & SEND for all your eCommerce delivery requirements. We can help you truly ace the customer expectations and set new bars for your shipping strategies.

Image source: Statista

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