By Darwish Gani, Co-Founder, Lumin
The global playing field for ecommerce is expanding and the opportunities are shifting. Developing economies are taking to digital purchasing and onetime stalwarts of the open market (like the U.K.) are becoming more closed. Understanding those shifts is key for a company like ours that makes digital-first, premium products that serve a global consumer. We’ve sold products in more than 40 countries to date, and it’s become clear that each market has its own market behavior, competitive landscape, operational intricacies and opportunities.
As a company with a globally focused mission, our team has to understand this matrix of regional complexity and market trajectory. We rely on trustworthy data and analytics, like this report from Shopify, “Global Ecommerce Statistics and Trends to Launch Your Business Beyond Borders,” to frame our strategy.
For any DTC brand looking to expand beyond its borders, industry reports like this one provide insight and guard rails for any market expansion.
A few call-outs from where I sit:
The United States, which sparked ecommerce game-changers like Paypal and Amazon, is a global leader in digital innovation and the ecommerce ecosystem. The country tops $500B in annual receipts for e-comm, and that number is expected to reach $763B by 2023, according to Shopify. Currently the U.S. has just less than one-third of the global share.
The market has unique dynamics, too. For instance, in every other region in the world, the majority of ecomm purchases (57%) come from overseas companies. But Americans tend to buy most of their online purchases from American companies.
That’s notable for foreign brands looking to make inroads in America; and it’s a bellwether for U.S. brands looking abroad. According to Shopify, 87% of merchants believed that expanding online sales into new markets was one of their company’s biggest growth opportunities.
But the most significant trend in this report is that the U.S.’s primacy in the ecommerce market place has slipped. Shopify reports that America’s slice of the ecomm pie is down 15%.
The winners? Well, every country and region is growing as technical infrastructure improves worldwide and retail habits migrate online. But China has the most to gain. The report estimates that ecomm sales in China will surge to more than $1 trillion by 2023—that’s a 70% increase from 2015.
By that date, Shopify reports, “retail ecommerce sales in Asia Pacific are projected to be greater than the rest of the world combined. This is due to (1) rapid urbanization and technological advancements, and (2) more than 85% of new middle-class growth residing [there].”
In total, there will be a larger market online for enterprising businesses. The report anticipates a 276.9% increase in worldwide ecommerce sales over the most recently tracked period: $4.9T in 2021 vs. $1.3T in 2014. That means more opportunity for international business—but also increased competition.
Anti-globalist sentiment might shift the dynamics in some countries, but the overall trajectory is an online marketplace that is bigger, more open and more international than ever before.
This is a content marketing post from Lumin, a Forbes EQ participant. Forbes brand contributors’ opinions are their own.