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Ecommerce is now a trillion dollar industry: here’s how it happened

Online ShoppingBuying airplane tickets, the odd concert ticket, movie ticket and books online is pretty much where most of us feel comfortable when we talk ecommerce. We generally like to touch and feel things when we are looking at buying tangible goods. But while we have been looking and touching; the rest of the world has taken to ecommerce like a humpback whale to krill.

A recently released eMarketer report estimates that Business 2 Consumer (B2C) ecommerce sales rose 21.1% in 2012 to a stunning one trillion US dollars. This all-time high figure is predicted to increase a further 18.3% to US$1.298-trillion in 2013.

These figures are almost incomprehensible especially when we compare the regions in the graph below.

E-Commerce Sales
E-Commerce Sales

The Asia-Pacific market makes the Middle East and African markets look like they are standing still, with the former region holding 30.5% of the market and the later eking out a paltry 1.9% in 2012.

According to ComScore, 90% of Americans (about 194-million people) visited retail shopping sites in December of 2012. That 194-million is part of the reason why the MEA region is lagging behind. America simply has a large bulk of connected users. MEA’s total digital buyers amount to 40.9-million people in 2012.

Low internet connectivity, poor infrastructure and a lack of education have been cited as major reasons as to why ecommerce particularly is an industry that developing nations struggle with. So what are the major draw cards that make people shop online and not offline in the brick and mortar stores?

1. Convenience
Where else can you do shopping at midnight in your birthday suit? Not at your local corner shop that’s for sure. Online shops are 24/7 and there are no lines, queues, disgruntled employees or other irate customers to deal with.

2. Better prices
Nine times out of 10 it costs shoppers less to shop online than in the physical store. It costs the shop keepers less so they pass this discount on to their online clients.

3. Send gifts
Online shopping makes it super easy to give and send gifts to loved ones. The retailers often offer “gift wrapping” as part of their service as well as (obviously) delivery. This takes all of the hassle (and excuse) out of gift giving to those who might be in another town or country.

4. Comparison of prices
Online shops make comparison and research of products and prices possible.

5. Discreet purchases
Sometimes it is better to not be seen whilst shopping for those, erm, special products that you would rather not have your pastor see you buy. Online shopping offers anonymity when you need it most.

As the number of mobile devices connected to the internet continue to rapidly rise, the value of mcommerce shopping is set to increase almost as dramatically as ecommerce. By 2015, mcommerce is predicted to reach US$119-billion.

Comparatively ecommerce is predicted to reach US$1.5-trillion by the same time.

While there is still a vast difference between the two forms of online shopping; more and more mobile shoppers are going to get comfortable buying big-ticket items from their phones or tablets.

Credit: Memeburn


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