Today, right from everyday grocery to luxury goods are available on digital platforms online, which one can shop for 24×7. This immense shopping convenience has taken e-commerce to unprecedented heights. As per Grand View Research, Inc., the e-commerce market is estimated to reach USD 83.26 trillion at a CAGR of 18.9%.
The rise in smartphone penetration and increasing urbanization, coupled with endless options provided by online players on their websites, is fueling the growth of the e-commerce market. E-commerce through its dynamic model, has created vast opportunities for both the consumers and the industry. Also, digital platforms have enhanced how we interact with sellers and fellow consumers, making communities and building trust through reviews and ratings. Thus, the e-commerce market keeps growing fast.
The Drivers for Market Growth in E-commerce
There are various reasons for the growth of the e-commerce market. Rising smartphone penetration is one of the key drivers for market growth. Shopping has become more convenient with the availability of new connected devices and applications. Greater availability of the internet, particularly in emerging economies, has driven the expansion of e-commerce customers.
The COVID-19 pandemic has been a blessing in disguise for e-commerce as consumers, spurring digitalization and online shopping.
The advent of digital payments has further fueled online transactions, as players have made available a secure mode of payment. The widespread adoption of digital payment apps, mobile wallets, and contactless payment methods provides customers with a secure and convenient way to carry out transactions, boosting industry growth.
With the rise of e-commerce, it has been easy for businesses to expand globally. Global markets offer a big pool of customer base. Countries have different demands, tastes, and purchasing behavior. By spreading their business into these various markets, businesses can boost their sales and their global presence. It also gives businesses varied markets without relying on a single market.
AI is revolutionizing the e-commerce industry by enabling personalized shopping, which enhances conversion rates and fosters brand loyalty. In addition, AI aids in the personalization of marketing messages to enhance customer engagement. With capabilities such as predictive recommendations based on past purchases, dynamic pricing, and chatbot assistance, AI has revolutionized online shopping.
Promising Trends in E-Commerce
The e-commerce industry is experiencing several new trends. Some of the major new trends are as follows:
Social commerce is gaining popularity since it includes selling goods directly on social media platforms. It can offer customers with hassle-free shopping experience so that they can browse and purchase products without even having to exit the social media site. For example, Instagram Shops and TikTok are enabling brands to create shops directly on the platforms.
Several organizations are increasingly adopting environmentally friendly methods and technology in order to cater to growing consumers’ needs for sustainability. These include everything from green packaging and responsible sourcing to carbon reduction initiatives. Some organizations, such as Patagonia and Allbirds, are pioneering the pace when it comes to sustainability drives.
