4. eCommerce Market SizeeCommerce Market Size
In 2014, consumers used e-commerce technology and processes to buy USD 80 billion worth of goods and services from sellers in other countries. We call this cross-border e-commerce. For example, if a consumer in Australia buys a widget via your website in the United States, that’s cross-border e-commerce. And if the entire transaction is completed online, it counts toward the USD 80 billion. But if payment is made offline after the buyer has found you via your website, that probably has not been counted. It is still important from our perspective because the sale would not have happened if a buyer had not found you on the Internet.
Thus, official statistics probably underestimate—by a lot—the amount of trade taking place that is digitally influenced, meaning trade that involves information technology from the point at which a buyer becomes aware of a product or service to the point at which it’s delivered. With the value of worldwide retail around USD 14 trillion, it’s not hard to imagine the importance of information technology, including smartphones, tablets, and e-marketplaces.
Cross-border e-commerce is dwarfed by e-commerce that occurs within countries. Chinese consumers, for example, spent over USD 300 billion via e-commerce channels in 2014. A detailed picture of the Chinese embrace of e-commerce and what it might mean for your business appears later in the book.
Total worldwide e-commerce in 2014 was a startling USD 1.3 trillion (at least). It will continue to grow.
Survey firm eMarketer compiled the following table, which shows a galloping Asia Pacific, led by China, overtaking North America in percentage growth and value. Young adults in China have money and a big appetite for foreign goods.
Growth and Projected Growth in E-Commerce (by Percent)
|Central & Eastern Europe||4.1||4||3.8||3.5||3.3||3.2|
|Middle East & Africa||2.2||2.3||2.3||2.4||2.4||2.5|
Value of E-Commerce by Region (USD Billions)
|Central & Eastern Europe||49.5||58||64.4||68.9||73.1|
|Middles Eastern & Africa||48.1||57.7||64.9||70.6||74.6|
Don’t be too concerned with where cross-border e-commerce is today. It will grow— substantially—in the years ahead, according to companies that make predictions. The Boston Consulting Group anticipates cross-border sales will mushroom to USD 350 billion by 2025. Payvision expects the payoff to happen much sooner—that cross-border e-commerce sales will reach USD 300 billion by 2018. Other forecasters predicted earlier in the decade that e-commerce would be well into the trillions of dollars by now, but their forecasts were knocked off track at least partially by currency crises, dot com busts, and the mammoth global recession.
A reliable harbinger is how the big logistics companies position themselves to stay abreast if not ahead of the trend lines. Those companies have been splurging on acquisitions in the cross-border e-commerce space. For example, FedEx purchased Bongo, an e-commerce fulfillment business, and UPS bought a similar company called i-post. FedEx then agreed to acquire, pending government approval, TNT Express, a parcel delivery company based in the Netherlands but with a strong presence throughout Europe and in Brazil. Look for acquisitions and consolidations to continue as supply chains become more efficient in anticipation of continued growth of cross-border trade. Such growth could be stimulated further if regional trade agreements now being negotiated become law. Later in this book, we look at some of the just-over-the-horizon eCommerce drivers that could cause hearts to beat a bit faster now and in the coming years.
The good news is that some of you won’t have to wait long. U.S. craft beer sellers, most of them small, saw an uptick of more than 50 percent in international sales in 2014, primarily from e-commerce sales. Presumably, most buyers have other brews to choose from, including local options. The fact is that foreign buyers like what Americans have to offer, a preference which gives you an advantage over some of the competition.
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eCommerce Industry eCommerce