E-commerce Is a Goldmine


From Ankara to Budapest, you will see e-commerce startups mushrooming on a large scale, and covering every conceivable sector from OPD consultations, Customised garments, Pet sharing of household goods. The advancement of technology has unleashed the startup era, e-commerce startups are comparatively cheaper to start, and courage remains the only limiting factor to do a startup. The overcrowded market of the e-commerce startups makes the ability to survive rarely, the very boon of low startup cost, is responsible for the fierce competition and undercutting, as everyone wants to scale and be the lone person standing.

Jeff Jordan in the marketer says this, ?We are at the core of a profound structural shift from physical brick and mortar retail to digital retail.? This statement does hold true as the e-commerce startups have been the largest and the fastest growing retail markets in the Europe. The sales in UK, Germany, France, Sweden, Netherlands, Italy, Poland and Spain are expected to cross $3.5 trillion within the next five years. Similar sentiments and strong numbers are envisaged for Asia- Pacific market. The Asia-Pacific region is growing faster than any other market in the world at an accelerating rate of 35.2%, and the researchers have projected online sales of about $875 Billion dollars in the year 2016.

The Internet will account for 7.3% of global retail and sales this year, growing 12.4% by 2019 as per the recent research done by emarketer, a research firm. Now that?s a big market to be in, with existing players getting unsettled there is an opportunity to slide in and build a big empire.

Traditionally, the rural areas had the lesser mobility to the local market, limiting their options to select from. With the rise in telecom penetration, especially in the rural area, the huge market is opening up to e-retailers. Advancements in bandwidth technology, high speed and lower costs of smartphones are giving freedom and choice to the previously untapped rural consumers; this is one of the harbingers of new consumer growth in Asia Pacific; we will see similar patterns in Africa as well in the coming years.

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Even for the buyers who have been buying online for many years, upward migration is setting in; the consumers are now comfortable making big-ticket purchases online. In India, we have seen online bookings of residential apartments; now that would have thrown the neighbourhood broker off the bed. The frequency of purchases and the transaction value is moving up in tandem, signalling that the market is moving towards maturity, in future you may buy everything including your new car online.

Big players know that it is impossible to build a trillion dollar sales company by brick and mortar model, Wal-Mart at its peak could not cross USD 400 billion marks. Amazon, Alibaba, and others by reaching to the global consumers in every nook and corner can easily clock over a trillion dollar in sales. And all this will happen very fast; it is not going to be easy for the brick and mortar retailers in times to come. Showering consumer discounts is a strategy for achieving this mega goal, and it keeps off the weaklings who don?t have deep pockets.

The Top e-commerce countries based on the projected web sales along with their year over year growth:

China: $672 .01 billion (42.1%)

US: $349.06 billion (14.2%)

U.K.: $99.39 billion (14.5%)

Japan: $89.55 billion (14.0%)

Germany: $61.84 billion (12.0%)

France: $42.60 billion (11.1%)

South Korea: $38.86 billion (11.0%)

Canada: $26.83 billion (16.8%)

Brazil: $19.79 billion (17.3%)

Australia: $19.02 billion (9.3%)

The startups in the digital market have a bright future, and the needle has moved in favor of e-commerce firms. Last year, online retailers grew by over 20 % in sales, now that?s a great feat considering the sluggishness in the global economy. The overall trade pie may not have grown; the market has shifted from brick and mortar to online retail.

The biggest expression of this boom was seen in the stock markets as the e-commerce companies had skyrocketing valuation globally. Alibaba stole the limelight; by record-setting USD 25 billion IPO in September 2015, which valued the China-based company at about USD170 billion.

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Wary of being buried in the history books, the brick and mortar leaders like Wal-Mart and Nordstrom are planning to expand their offerings online so that they can survive the next few years of transition. This trend will get accelerated as Google and Facebook provide faster Internet through sky balloons across the world and low-cost smartphones give millions of new users the power to buy anything at a click, the user growth will happen in the pockets which have been untouched.

For an entrepreneur, it makes good sense to build your business in the e-commerce segment, if you don?t have a niche product, innovate and make an offering for the e-retailers; they are the new SMB?s you need to cater too. Can you make money by riding this behemoth, yes if you have the courage and conviction?

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