Contents
E-commerce – it is also electronic commerce or e-commerce – combines all sites and services where payment is made online. First of all – online stores that accept electronic payments
- Typology of e-commerce
- How e-commerce is developing in our country and the world
- Market leaders and successful cases
- The Future of Ecommerce
In fact, e-commerce is not only financial or commercial transactions carried out using networks, but also chains of global business processes associated with transactions.
Today, e-commerce includes the electronic purchase or sale of goods through online services or via the Internet, mobile commerce, electronic funds transfers, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems and automated data collection systems.
Phil Brandenberger made the first online purchase in 1994. He ordered Sting’s new album, Ten Summoners’ Tales, from the site and paid $12,48 (not including shipping) with his Mastercard. A little later, Amazon and Alibaba entered the market, which became its pioneers and monopolists.
Types of e-commerce
E-commerce can be classified in two ways:
What they sell:
To whom they sell:
The two most common types are b2c and b2b.
How is e-commerce developing in our country and the world?
With the growth of digitalization and the massive transition to online, e-commerce has become a driver of key changes in the global economy. Access to e-commerce today is possible from any smart device: by April 2022, there were 5 billion unique Internet users in the world, which is 63% of the world’s population. Accordingly, approaches to how to launch and promote new products are changing.
Here are the main numbers for today:
- In 2021, the number of online shoppers in the world reached 2,14 billion people. In 2019 there were 2,05 billion of them, and in 2018 – 1,79 billion.
- In total, e-commerce accounted for more than 2021% of all retail sales in the world in 18, and 2023% in 22;
- The volume of Internet sales in 2022 will be $5,5 trillion;
- Among the top reasons why people order goods online are free shipping (53%), promotions and discounts (41%), the ability to read reviews (35%), ease of return (33%) and speed of checkout (30%);
- 33,6% of customers compare the prices of goods in an online application and a brick-and-mortar store before making a purchase, 81% study the information online in detail before making large purchases.
Today, China is the absolute leader in online commerce: in 2021, the e-commerce segment there for the first time in the world exceeded half of the entire retail sales market. They are followed by South Korea with 28,9%, the US with 15% and Western Europe with 12,8%. The volume of online sales for 2020 in China amounted to $2,3 trillion, in 2021 – almost $2,8 trillion, and in 2022 is expected to be about $3,1 trillion.
For comparison, in the US, the e-commerce market in 2020, according to eMarketer, amounted to $709,8 billion and will exceed $1 trillion by 2024. Nearly half (45%) of all e-commerce in the country is through mobile app sales.
According to the Association of Internet Commerce Companies, the volume of the e-commerce market in our country in 2021 amounted to ₽3,6 trillion. This is 13% more than a year earlier.
Support for e-commerce in our country for the period up to 2024 is regulated by the Digital Economy national project. The main goals of the document are to increase domestic costs for the development of the digital economy from all sources (by share in the country’s gross domestic product) by at least three times compared to 2017, and to create a sustainable, secure and publicly available information and telecommunications infrastructure for high-speed transmission, processing and storage of large amounts of data.
The most successful e-commerce cases
Alibaba
Monopolist of the Chinese e-commerce market and one of the largest companies in the world. Alibaba has a market capitalization of $2022 billion as of June 282, making it the 26th most valuable company in the world. The company was founded in 1999 and operates in three areas: b2c (Tmall and Aliexpress), b2b (Alibaba) and c2c (Taobao). All three platforms have already entered the international market (including Russia), but the main share still falls on the domestic market. The company also has its own Alipay payment system, which works like an international one.
Alibaba’s model is similar to eBay: it acts as an aggregator for sellers – individuals, shops or manufacturers – who themselves send goods to buyers.
JD.com
Alibaba’s main competitor in China. Unlike Alibaba, JD.com follows the Amazon model, shipping third-party sellers from its own warehouse and shipping through its own shipping service. At the end of 2020, the company had more than 900 warehouses with a total area of 21 million square meters. m. The holding has its own social platform – Jingxi, as well as chain stores near the house Xintonglu and JD New Markets, and even its own line of commercial real estate. In the near future, JD plans to launch its own digital currency – e-CNY.
The Amazon
Amazon is the largest e-commerce retailer in the US and one of the largest in the world. The company has a huge network of warehouses and sorting centers, as well as its own delivery service that uses drones and robots, and in 2020 it also acquired Boeing 767 aircraft. In addition to the main b2c platform, there is also Amazon Business for corporate clients.
The company was founded in 1994 by Jeff Bezos as an online bookstore. After 25 years, Bezos has become the richest person in the world with a fortune of $ 191,4 billion, and Amazon itself is the world’s online trading giant. the market capitalization of the company for June, 2022 reaches $1,07 trillion, and its revenue for 2021 was $470 billion — 22% more, than the previous year. Net profit for the same period increased by 57%.
Now 60% of Amazon’s income comes from Amazon Web Services IT solutions – cloud storage and services. The company regularly launches various products and services under its brand: Kindle e-readers, smart home elements, Alexa voice assistant, Amazon Prime online cinema. Amazon also has offline Amazon Go stores. They work using neural networks with face recognition and computer vision: there are no cash desks and sellers, and purchases are paid automatically through the application.
eBay
eBay was created in 1995 as a c2c online auction service, with sellers auctioning things (often used) and buyers bidding. In this case, the delivery of goods lies with the seller, and the service itself takes a commission for placing lots and settles disputes. Later, commercial accounts of private entrepreneurs and stores appeared on the platform, and it became possible to buy at a fixed price.
eBay, like Amazon, has its own sites in different countries – including Russia. However, the company did not develop additional services and its own logistics. eBay has remained an online aggregator whose main feature is that you can find rare collectibles and even valuable antiques here. Revenue for 2021 was $10,5 billion. The number of active users as of December 31, 2021 was 147 million people.
ASOS
The company was founded in 2000, and its name stands for “As Seen On Screen”: “What you saw on the screen.” The British marketplace also works on the Amazon model: it aggregates goods from suppliers in its warehouses and delivers them all over the world. These are mainly clothes, shoes and accessories of mass market brands, and cosmetics were added to them a few years ago. Exchange capitalization – $ 1,1 billion. The store has local versions in different countries of Europe.
Wildberries
One of the largest Russian online retailers on the market for 15 years, and its founder, Tatyana Bakalchuk, tops the Forbes rating of the richest Russian businesswomen: her fortune is estimated at $21 billion.
Wildberries sells clothing, footwear, accessories, household appliances and electronics, and household goods. The company delivers all this from its own warehouses through pick-up points (in 2020, the share of such orders was 93%) or couriers. In 2020, the company’s turnover increased by 96% compared to 2019 – up to 437,2 billion rubles, and the number of orders – up to 323,8 million, reaching 1,5 million per day, which is twice as much as last year.
Ozone
Another giant of Russian e-commerce with a sales turnover of almost ₽450 billion in 2021
The company was founded in 1991. Like Amazon, the first online hypermarket in our country started out selling books. Today, 24% of Ozon’s sales come from electronics, with the rest divided between books, household appliances, clothing, cosmetics, groceries, and other products. Like Wildberries, the marketplace has relied on expanding pickup points, and since 2020 it has been doing this only under its own brand, and not through partners. Ozon delivers goods to its own parcel lockers and couriers. The company also launched Ozon.Travel, an air ticket sales service.
“Yandex Market”
Yandex.Market entered the market 20 years ago. Until 2018, it developed as an aggregator for online stores, since 2018 it has been simultaneously building the Beru marketplace, which in 2020 became part of Yandex.Market. Today it is a marketplace where stores can sell their goods, and users can make purchases, choosing from an assortment of 4 million product names.
Yandex.Market offers sellers four models of cooperation with the marketplace:
Marketplace “Marketa” also offers other services for sellers and buyers: searching through dozens of filters, comparing prices for the same product, customer reviews, store ratings and paid promotion.
At the end of 2020, more than 8 sellers sold their goods on Yandex.Market, 25 partner stores were placed using the advertising model, and the daily audience reached 6 million unique visitors.
The Future of Ecommerce
The e-commerce market will continue to grow. According to Nasdaq, up to 2040% of all purchases will be made online by 95.
Among the global trends in the development of e-commerce, it is worth highlighting:
In other words, stores strive to make the buying process not only as fast and comfortable as possible, but also exciting. This, among other things, becomes a challenge for classical marketing.
E-commerce is heading towards personalization: through smart search and selection of products, personal recommendations, online stylists and other tools. AI will be able to analyze all your purchases and preferences, making personal recommendations based on your characteristics. Grocery chains are already implementing the selection of goods based on a genetic test and basic medical indicators.
Read more about how the online trade in groceries and ready-made food will develop in the Trends material.
Another notable trend is hybrid formats: when offline supermarkets and retail chains go online and open entire areas for pickup or online shopping. Another example of a combination of offline and online formats is Amazon Go stores: a customer can buy any product without cash registers and sellers using an application and facial recognition cameras.
Among other trends:
- e-commerce elements are actively implemented in social networks: today you can buy or go to the product page directly from TikTok, Twitter, Pinterest and YouTube;
- under market pressure, digitalization is gradually being accepted even in conservative areas of the consumer market tied to offline sales – for example, developers and car dealers;
- the global b2b e-commerce market, which already exceeds the turnover of b2c, will grow at a faster pace, an average of 17,5% annually until 2027;
- mobile applications will replace all other online sales channels – smart voice assistants, AR fitting applications, as well as payment using PayPass will come to the aid of consumers.