Every day you get certain information about the study of global sales and trends in eСommerce, which will soon blow up the eCommerce market. Often, this is superficial data that you know to some extent. How to get a qualitative eCommerce market analysis as well as the analysis of the competitors and some forecasts?
The bad news is that you need to pay for a high-quality and specialized analysis of your niche, which is not always affordable.
The good news: we will do it for you for free. In what way? In this review, we announce the introduction of a number of marketing research, which will be designed to online shopping industry analysis. Which one? Below you can read what exactly this survey will include.
The aim of the survey
Every businessman who wants to be successful in the online retail sector should set long-term goals. These are abstract and desired things that you aspire to. Long-term goals include sales plans for the next year, the company's entry into a new market, the opening of new stores or the transition to another industry. After determining these goals, you will be able to draw up a phased plan on how to achieve the outcome. But at first, you should have a clear understanding of the state of the market, competitors, and features of the field in which you sell. Also, you need to understand that the eCommerce market directly depends on the interests of the consumer, his requirements for the product and the need for products, the level of competition and the characteristics of the product packaging.
Therefore, this and subsequent reviews aim to provide eCommerce sector analysis, which is the key to effective sales.
What will it give you?
Analysis of eCommerce will give you both a qualitative and a quantitative understanding of the reasons why customers buy your product and how you can compete to make more profit.
What information our survey will include:
- the current capacity of your industry, growth rates and trends;
- socio-economic, geographical and internal features of your ideal clients;
- offering competitive products;
- the concept of marketing positioning and what messaging it is better to use;
- methods of selling large giants and market players. A study of the trends they follow, which will help them be adjusted according to their purpose;
- restrictions, needs or obstacles of a product or company that impede progress in certain areas;
- business actions or decisions that your company can make to maximize the gap between your strengths and the weakness of your competitors;
- gaps that your competitors can use to achieve goals in an industry that you do not deal with.
What will online retail market analysis include?
The effective sales geography
According to statista.com, the number of users who make online purchases will increase significantly, and this trend doesn't seem to change. In countries like the USA, Japan, and Britain, online shopping is expected to remain popular in the future, as these countries are one of the leading online retail markets. Respectfully, global retail sales will only keep growing as well.
There were 307.2 million internet users in the United States in January 2022. The United States internet penetration rate stood at 92.0 percent of the total population at the start of 2022, making the US one of the most promising contributors to global eCommerce sales volumes.
Following this trend, by 2019 the amount of global online retail sales will be about 3,208,184 million US dollars. This trend will continue to grow (CAGR 2019-2022) by 7.9%, leading to a total sum of US $ 4,035,690 million by 2022.
We have described eCommerce statistics for sales in general. But what are the components of these numbers and statistics? The markets. Check out the list of the top countries according to the number of transactions. On the map below, you can see the top 5 of the strongest players in eCommerce sales:
- the USA;
Let's see how well other English-speaking countries perform compared to the US. The eCommerce market of the United Kingdom is the third largest in the world. The eCommerce sales volumes are expected to reach over $119 billion by 2025. Despite being small, the UK is among the most advanced European eCommerce markets. The country's revenues have doubled in recent years as it's embraced online shopping convenience by enabling mobile access to most platforms. And it's only expected to grow.
However, going further in the list, you can see that plenty of other countries contribute considerably to online retail sales growth. As a matter of fact, Canada is the 9th largest market for eCommerce with a predicted revenue of US$66,012.2 million by 2023, placing it ahead of Indonesia. Revenue is expected to show a compound annual growth rate (CAGR 2023-2027) of 11.1%, resulting in a projected market volume of US$100,691.6 million by 2027.
In 2021, Canadian eRetail showed a revenue of $53 billion. With a projected increase of 13% in 2023, the Canadian eCommerce market will contribute to the global revenue by $75.55 billion, as well as experience a tendency to grow in the following years.
2017-2022 Niche Analysis
Can you give a clear answer to the question: why did you choose to sell precisely those products that are already / or will be placed in your online store in the near future? What prompted you to this decision? There may be a lot of answers, however, as practice shows, many businessmen start selling the products:
- because someone is already good at doing this job;
- they rely on products that are just appearing on the market and gaining a trend position.
The trend is an abstract and very risky concept. Some businessmen get a good percentage of sales of popular products and have a return on their investments, while the second part suffers serious losses. One of the reasons (not the main one) for the loss of investment is the sale of goods without analysis of the customers’ needs and interests.
To determine which product categories can be called a trend, we have analyzed the MasterCard published statistics:
This statistics of world payments makes it clear which products the customers usually need:
- toys and games;
- electronics / consumer electronics;
- personal care products;
- home accessories;
We assume that the statistics of data from such trading platforms as Aliexpress, Amazon or eBay will show you a similar picture since in most cases the customers pay for their goods online.
We took into account the above-mentioned statistics and selected the most interesting and promising product categories. What did the statistics show us? The products from the category of electrical engineering, clothing/footwear, food, and toys are in a constant trend. Below you can see the features of their subcategories and how they affect the eCommerce market size worldwide.
1. Appliances / Consumer electronics
Electronic commerce market is a field that is constantly growing and developing. In this category, in recent years some exciting new developments have taken place at a quite rapid pace.
Let's check the numbers
According to statistics, sales revenue for 2017 in this segment was $ 267 billion, and in 2018 it was even higher i.e. $ 298 billion. These figures show the following trend: the revenue for electrical goods will grow at an average annual rate of about $ 30 billion.
According to this trend, the revenues from electrical engineering in 2019 will be about 331 billion US dollars, and the level of user interest in the electrical engineering sector will increase by 28.2% in 2019. By 2023, this number will reach 36.1%.
According to forecasts, the annual growth rate of revenue (CAGR 2019-2023) will be 6.7%, which will lead to an increase in the market volume of 429 billion US dollars by 2023.
According to consumer activity, the customers aged 25-35 years are buying electronics more actively compared to other age categories.
Thus, the category of electrical engineering can be called one of the most promising in the world. Analyzing this field, we pay attention to new technologies that literally “break in” into the market. This is VR\AR technology. In 2022, the augmented and virtual reality market is believed to reach a market size of $ 209.2 billion.
Who knows how these technologies will change the future of eCommerce? Therefore, to be always “afloat”, follow the development of electronics, which is being advanced to meet the needs of consumers and new developments in this field.
2. Clothes / Footwear
Clothing and footwear are key and consistently demanded elements in everyday life.
In 2018, the revenue from online retail trade in clothing and accessories was about $ 102.8 billion and is projected to increase up to $ 138.7 billion in 2022.
We can say that this category of goods is both stable and seasonal as it suffers an increase and decrease in interest at certain periods. We are sure for 100% that everyone always needs clothes.
If you sell clothes for mountaineers, be ready that starting from spring people will be interested in such goods. Since the warm time (autumn, spring, summer) is the best time for holidays and travel. Also, an interest in a particular type and style of clothing depends on the geography of your customers. So, according to the source fashionunited.com/global-fashion-industry-statistics, the demand for clothing in Britain and America is different. Below you can see that clearly.
Query statistics in Britain:
Query statistics in the USA:
3. Food/ Beverage
Before we put this niche in the list of our marketing analysis, we turned to statistics on customers’ spendings. According to this source fashionunited.uk/uk-fashion-industry-statistics, on average, a British resident spends 8% of his budget on food / non-alcoholic beverages and 4% on beverages that contain alcohol. This is quite a significant part of the budget since the users usually spend most of it on utilities. The percentage of the indices in the United States and Canada is approximately identical with an accuracy of 1-2%. This is the statistics that illustrate online and offline sales.
More specifically about online sales: according to the calculations of the Food Marketing Institute by 2025, 20% of world food sales, which is about $ 100 billion, will be accounted for by online shoppers. Moreover, a recent study by the NPD Group predicts that 20 million consumers who are currently not working or not familiar with online shopping will increase their activity over the next six months. They will join other 52 million people who are already actively doing shopping online. So, if you are selling food online, you are nicely on the right track.
4. Pet Goods
Pet Supplies are the games/toys. This is a fairly extensive category. Read below why we decided to cover this topic. According to the new report by Grand View Research, Inc., the profits from pet goods in the United States will reach up to 202.6 billion by 2025. The top of the sales of pet goods is premium goods (collars, houses) and toys.
According to the APPA National Pet Owners Survey in 2017–2018, 68% of the US residents own a pet home, which is 84.6 million houses.
According to the data of https://www.americanpetproducts.org/press_industrytrends.asp, in 2018 the number of pet products sales will reach up to $ 73 billion. According to statistics, the number of sales for pet goods is increasing by an average of $ 5 billion. Basing on the data, it can be predicted that by 2020 the sales in this field will have reached about $ 80 billion.
Each month, our marketing team will analyze the above niches in the United States, Britain, Canada and publish survey data for you. Let’s see the list of niches once more:
- Clothing / Footwear
- Pet Goods
- Appliances / Consumer Electronics
- Food / Beverages
ECommerce platform trends
There are more than 1.94 billion online stores in the world. And all of them are placed on different eCommerce platforms. Let's take a look at the statistics of the top platforms offered by trends.builtwith.com/shop
The diagram shows that the top 3 eCommerce platforms are the following ones:
Currently, the number of active online stores on the Woocommerce platform is 2,179,905, 1,994,656 are the Shopify customers, and on Magento, there are 831,051 active online stores.
Regarding the market share distribution of top eCommerce platforms in this category, Shopify accounts for 21% of all eCommerce websites, WooCommerce occupies 23%, and Magento only 7%. Regarding website distribution on the internet, Shopify occupies 25% of the entire market compared to WooCommerce's 20%. Magento is far behind, with only around 0.5% of the market share.
As you can see from the statistics, Shopify is one of the most popular platforms in the eCommerce market. In the chart below, you can see the platform distribution statistics over 13 years:
According to Google trends statistics, Shopify is ahead of eCommerce platforms such as Magento and Woocommerce. The platform has an uptrend, while the others are steadily losing their positions:
Shopify on these markets
Fact 1. According to the results in 2017/2018, the number of its transactions is constantly growing.
Online sales in the US has increased by + 5% / In Canada - by + 12%, and in the UK - by + 10%.
Fact 2. In the United States, Britain, and Canada, Shopify is already quite common:
In the US the number of Shopify stores covers around 50-70k websites. Shopify's market share is 8-20%. In Britain, it covers 7-9k sites. Market share is 3-14%. In Canada 9-16k sites use it. The share is 3-10%
Fact 3. All 3 countries are in the top 5, according to the absolute number of eCommerce projects:
In the US, this number reaches 520k, in Canada, it is 27k, in Britain, this number equals 54k projects.
One of the main reasons for the popularity of this platform is the migration of data from free eCommerce platforms and Magento to Shopify. Why do the companies make decisions to transfer their online stores to Shopify? There are many reasons, one of the most important is flexible customization of themes and a wide range of services that promote business development. But this review is not about that. We are interested in statistics, features of the platform and describe this data in our blog. Το check our expertise, please, visit our links:
- Wix vs. Shopify: Which e-commerce Platform is Better?
- Shopify or Squarespace - Which eCommerce builder should you choose?
- Magento to Shopify Migration: The Complete Guide To Migrate Your Store
- Shopify vs Magento: Which eCommerce Platform is the Best Choice
How do the companies start and speed up their eCommerce businesses?
Creating and promoting each online store is a complex of services that need to be carried out for its progress. With the expansion of the market, the number of needs and the demand for certain services are growing.
You can have a great online store with the best make-up and original special effects that catch the eye, however, it will not make a profit. It can be caused be low conversions, slow site loading, inappropriate marketing and much more. For these and other reasons, online store owners seek help from CRO specialists, marketers, and UX designers.
But what services are mostly needed?
One cannot say for sure since these indicators depend on the category of your niche and the goals set by the company for the experts. However, following the statistics of our own sales, we can outline the services that are most regularly required by the customers:
1. CRO (conversion rate optimization).
The owners of online stores do not always understand the reason for the decline in conversions or the sources that attract low-quality traffic to their sites. It happens sometimes, you can not control everything. Your task is to react in time and attract the experts who will analyze the reason for the drop in conversions and draft a plan on how to fix a problem.
At this link you can read how CRO can increase your sales:
2. Development (front-end, back-end)
This is the basis of any online store, so the level of development should be of high quality, and the internal functionality must correctly perform the tasks.
Here is a good example of what problems the development should fix:
3. UX Design
This is the visual component of the online store. What should the design be? Attractive and income-generating. Every component in the online store should sell. Read more about the components of high-quality design at this link:
4. Virtual Assistants Service
Some of our clients do not have enough time to process their businesses due to routine matters. In this case, they seek help from the virtual assistants.
Read below about what standards you need to choose your virtual assistants and how they can improve your business:
In order to increase your sales, you need to work with the target audience that consumes your product. We recommend our partners to use a multi-channel promotion strategy, which includes the following services: SMM, SEO, email-marketing, talking to opinion leaders, etc.
Challenges for SME:
As a studio that specializes in eCommerce and has constant access to communication with the owners of online stores, we can distinguish a number of requests which customers address us:
- low quality of internal business organization;
- fragmentation in the organization;
- poor data quality;
- poor data collection process, the lack of regular analysis procedures that can ensure certain changes in the organization;
- lack of customer data;
- the inability to determine the effective path of the customer to purchase; the inability to create a portrait of the target audience and highlight it in the digital promotion tools; the lack of effective and justified information motives for repeated and regular interaction with the customers;
- development of a dropshipping model.
All the above-illustrated statistics shows the development trends of eCommerce and confirms the idea that in the near future this area will be an integral part of the global market share. The owners of online stores need to monitor the development pace of this market in order to set the right priorities in choosing the geography of the sales as well as the category of goods.
Basing on the numbers and graphs, we have identified three of the most powerful players in the eCommerce market i.e the United States, Britain, Canada, as well as the niches that ensure high income such as electronics, clothing/footwear, food/beverages, pet goods. These countries and niches make up a significant part in both eCommerce and Shopify market. That is why we shall dwell on these issues in our future reviews. If you are interested in accurate statistics on the status of your product category or maybe the information about the errors that your competitors make or the successes that help you run a business, follow our next articles. Next time, we will speak about the features of the clothes/footwear niche. Do not miss it!