May 18, 2024

Corporate Nex Hub

Bringing business progress

Trends to Guide Your Store in 2024

9 min read

Ecommerce is many things: cross-border commerce, borderless business, and international online retail. But more important than what it is, is what it isn’t.

Ecommerce is not a luxury. It’s not one strategy among many. Becoming an online business is a necessity.

Unfortunately, it’s also fraught with questions: Where to invest? What countries present the best product-market fit? How do you attract non-local buyers? Which is most important: translation, currencies, payment options, or something else entirely?

This guide will give you an inside look at global ecommerce, with tips on how you can expand into the market.

What is global ecommerce?

First things first: global ecommerce is the selling of products or services across geopolitical borders from a company’s country of origin, normally defined as its founding or incorporating location. Products or services are sold into non-native markets via online sales and marketing.

The advantages of international ecommerce are:

  • Easier expansion into foreign markets
  • Easier-to-find product-market fit
  • Shorter B2B sales cycles
  • Quicker building of international presence
  • Lower barriers to entry

Recently updated forecasts anticipate a 8.9% increase in growth in 2023 for worldwide ecommerce sales over the most recently tracked period. 

How big is the ecommerce market?

The global ecommerce market is expected to total $6.3 trillion in 2023. That figure is estimated to grow over the next few years, showing that borderless ecommerce is becoming a profitable option for online retailers. By 2024, 21.2% of total retail sales will happen online. 

Casey Armstrong, CMO at ecommerce fulfillment brand ShipBob, adds, “While a lot of focus in ecommerce centers around the United States and Canada, there is a lot to learn from other large international players who are seeing an even more accelerated ecommerce growth rate.

“Merchants can shift where they sell based on this data and the demand for ecommerce from these countries. At ShipBob, it’s why we have opened fulfillment centers in Canada and the UK and are about to open another in Australia.”

15 top ecommerce statistics 

If you’re running an online store, staying updated on the ecommerce industry is important for maximizing revenue. 

Below are the top statistics from around the world, so you can be more prepared for the year ahead.

  1. China continues to lead in global ecommerce sales according to the International Trade Association, accounting for more than 50% of all retail sales worldwide, with total online sales just over the $3 trillion mark in 2022.
  2. After China and the US, the third-largest ecommerce market is the United Kingdom, taking up 4.8% of the retail ecommerce sales share. The UK is followed by Japan (3%) and South Korea (2.5%).
  3. The UK is forecast to do more than $143.8 billion in ecommerce sales in 2023 (Statista).
  4. Latin America (including Peru, Brazil, Argentina, Chile, Colombia, and Mexico) saw $104 billion in ecommerce sales in 2022, up 22.4% from $85 billion in 2021.
  5. The Singapore ecommerce market is one of the top 5 fastest growing countries in the world, with a 25.5% growth in sales in 2022 (Insider Intelligence).
  6. The US ecommerce market is forecasted to reach more than $940.9 billion in 2023, a little over a third of China’s total (Statista). 
  7. Recent studies show that around 218.8 million US consumers will shop online in 2023 (Insider Intelligence).
  8. Over 50% of consumers shop online for free delivery, followed by coupons and discounts at 38.7%. (Data Reportal). 
  9. Recent reports state that the average shopping cart abandonment rate is 70.19% (Baymard Institute). 
  10. 28% of US shoppers use mobile phones while in a physical store to look up discounts, compare pieces, and read product reviews (PYMNTS).
  11. 30% of consumers report that influencer recommendations guide online purchases, compared to only 27% for recommendations from friends or family (HubSpot).
  12. As of May 2023, the average conversion rate across ecommerce sites was 2.02%, a 0.2 percent point increase from the previous month (IRP Commerce). 
  13. B2C online marketplace sales (Think Amazon and eBay) in the US are expected to reach $2.1 trillion by 2024 (Research and Markets).
  14. The gap between ecommerce growth and retail growth in 2022 was nearly nonexistent, just two-tenths of a percentage point (Insider Intelligence). 
  15. There were 41.8 million online shoppers between 25 and 34 years old in 2022, with millennials as the largest group amongst digital buyers (Insider Intelligence). 

Ecommerce trends to watch

1. Global inflation pressures

For customers worldwide, inflation has become a leading concern for 40% of respondents—above poverty and social inequality (31%), unemployment and jobs (26%), and coronavirus (12%).

While people are still spending money, global brands are not exempt from the pressure of inflation. As such, if you’re planning to use cross-border ecommerce, you’ll need to consider the impact of inflation on potential customer purchasing decisions.

Speaking to Glossy in a recent interview, Olaplex CEO JuE Wong explains how even with net sales increases of 38.6% in Q2 2022, Olaplex isn’t immune from global inflation, macroeconomics, and geopolitical situations. As a result, Wong says while the business is cash-rich, it will be investing in technology (such as ecommerce solutions) and technological capabilities to help advance growth.

With this concern in mind, it’s worth researching the inflation rates of the countries you’ll be targeting and potentially revising your pricing strategy using the data you gather.

2. More consumers will shop on their smartphones

The pandemic made a significant impact on ecommerce trends around the world. While retail and ecommerce revenue have stabilized again, there are still more people online shopping than before. 

M-commerce, or mobile commerce, involves shopping online through mobile devices, like a smartphone or tablet. Mobile ecommerce will continue to break out over the next few years. Technological advances like branded mobile apps, 5G wireless, and social shopping make it easier for people to shop on their phones.

In 2022, mobile shopping from Shopify merchants captured 69% of online sales over BFCM.

Online retail continues to expand due to the increasing use of smartphones and tablets globally. Mobile commerce is expected to account for 42.9% of ecommerce sales by 2024.

Another facet of mobile shopping, social commerce sales are set to triple by 2025. While only 47% of US consumers report purchasing goods through social platforms, over 84% of Chinese consumers report shopping on social networks, the highest in the world. 

Expect more branded shopping apps, more SMS and Facebook Messenger marketing campaigns, and more social commerce content on TikTok and Instagram.

3. A new mix of marketing channels

In recent years there have been exciting advancements in several areas of advertising—including access to new marketing channels.

Social commerce has been on the radar for the past five years, with the release of Facebook and Instagram shopping features, and, more recently, TikTok shopping.

However, as an extension of social commerce, live shopping has started to become more popular as the strategy has soared in China. The live commerce market in China was at $3.49 billion in 2021 and is expected to increase to $4.92 billion in 2023.

Another new marketing channel coming on the horizon is connected TV advertising—which refers to ads you’ll find on platforms like Hulu, Roku, and YouTube. The perception of these ads by customers are largely no different to that of linear/cable TV, but customers comparing the two found ads on streaming services to be better.

Hoka is an athletic footwear company that recently launched a global ad campaign using connected TV platforms, and reported a 68% increase in ecommerce website visitors and a bump in followers on social media platforms.

4. A slowly stabilizing supply chain

The impact the pandemic made on supply chains was, according to Morris Cohen, Wharton professor of operations, information, and decisions, “a major disruption, along the lines of having an earthquake or tsunami.” For decades, the core features of supply chain management were:

  • Globalization
  • Low-cost supply
  • Minimal inventory

When COVID-19 broke supply chains around the world, it drove companies to focus on building supply chain resilience or to think of ways to keep supply chains from halting and restoring them quickly when they do.

The effects of COVID-19 were not an exception to the rule: Supply chain disruptions are happening with increasing frequency and severity. Levi Strauss saw its biggest year-over-year loss in Europe in 2022, where revenue decreased 19% from the same period in 2021. McKinsey reports that significant disruptions to manufacturing production now occur every 3.7 years, on average.

Experts predict that systems will “normalize” throughout 2023 at the earliest. Even once they do, the pandemic has exposed global logistic network vulnerabilities to future political instability, natural disasters, and regulatory changes. Brands like Volkswagen even lowered delivery targets in 2023 due to supply chain issues. 

“There are [some experts] who think that supply chain problems are the new normal. There are other global crises afoot that are going to affect how global manufacturing happens. There’s no reason to think that this system is not going to be susceptible in the future to other problems,” says Rebecca Heilweil, a supply chain reporter.

5. Growing sales in China and APAC

Insider Intelligence and eMarketer report that five countries from Southeast Asia made the top of the list for fastest ecommerce growth in 2022. The countries eating up market share include:

  • Philippines (24.1%)
  • India (22.3%)
  • Indonesia (20%)
  • Malaysia (18%)
  • Thailand (16%)

The Philippines and India are expected to be numbers one and two, respectively, until 2026. Digital buyers in India are anticipated to spend more than $21 billion on ecommerce in 2023, with Indonesia’s spending to increase by over $16 billion. 

6. Creating content for consumers in their local language

Fifty-seven percent of customers surveyed by PayPal say they currently shop internationally. Almost two in five respondents said they’d made an international purchase in the past three months.

However, amongst English-speaking shoppers, over two-thirds of respondents in a study from Flow.io said they would not purchase from a site not translated into English. In Japanese and South Korean markets, where cross-border commerce was lowest, that number rose to 41% and 36%, respectively.

Going native with your site’s language—beyond Google Translate—can make or break global sales. It creates a good customer experience from first impression to checkout.

In fact, in terms of website content, the majority of shoppers in Flow.io’s report agreed that the following pages needed to be in their own language:

  • Product descriptions (67%)
  • Product reviews (63%)
  • Checkout process (63%)

This bears closer examination. Localization can often feel overwhelming, like an all-or-nothing endeavor (either everything has to be country-specific or why bother). It’s not.

Set up your international ecommerce strategy

Setting up an international, omnichannel ecommerce strategy can seem intimidating, but there are a few key areas that, if you address them as a priority, can help you succeed.

The areas for ecommerce businesses to focus on are:

Pricing 

When it comes to pricing, two issues present themselves for international ecommerce retailers: currency conversion and how to handle promotions. Regarding the former, it’s worth researching how customers perceive pricing in the country you’re targeting. In the West, it’s common for prices to end in a 9, whereas in countries like China, it’s best to use a round number.

Regarding promotions, according to McKinsey & Company, businesses should use a wider range of factors to determine price sensitivity (especially in foreign markets). In addition, effectively and profitably linking pricing and promotions together can increase revenue and profiles by three to five percentage points overall.

Payments

Thankfully—thinking about what payment methods are relatively simple for international ecommerce—you’ll need at least a debit/credit card processor and mobile wallet options, like Apple Pay and Google Pay, as well as a buy now, pay later (BNPL) option. 

Some ecommerce platforms have their own payment set up. For example, with Shopify Payments, you can set up all major payment methods for your ecommerce store automatically.

Customer service

Customer service is important no matter which part of the world you’re servicing. Common types of communication for customer service in most countries include phone, email, and live chat.

Shipping and logistics 

How your buyers will receive your products is a huge factor to consider, as it’ll likely be expensive. So to make shipping internationally successful, think about removing as much friction as possible. That includes researching price options with carriers, offering shipping speed estimates, researching relevant taxes, and simply preventing some products from being sold in certain countries.

Get a head start with Shopify Marketplace

In 2021, we launched Shopify Markets, and this year we released an upgrade, called Shopify Markets Pro. This new feature helps businesses manage overseas sales by simplifying complex areas such as compliance, tariffs, shipping, and conversions. On average, merchants in North America use this feature to sell to 14 new markets.

Read more: Everything You Need to Sell Worldwide: How to Build Your International Expansion Strategy From A Single Store

Ecommerce statistics FAQ

How big is the global ecommerce market?

The global ecommerce market is expected to total $6.3 trillion in 2023 and account for 21.2% of total retail sales. 

How do I start a global ecommerce business?

  1. Determine your target international markets and how they will support business growth.
  2. Understand target market needs, for example preferred payment methods.
  3. Create a plan for market entry.

Is ecommerce important to a global business?

Ecommerce can support and facilitate international trade, ease business deals, and help businesses better understand market demand.

link

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.