Global Ecommerce: Trends and Stats to Watch in 2021
Global ecommerce encompasses many aspects, including cross-border commerce, borderless businesses, and international online retail. What it isn’t is more important than its content.
Global ecommerce does not have to be a luxury. It is not a strategy that can be used in isolation. However, it is necessary to go global.
It’s not easy to know where to invest. Which countries offer the best product-market match? How can you attract buyers from outside the country? What is more important? Translation, currencies, payment options or something else altogether?
This guide will provide you with an insider’s view of global ecommerce and tips on how to expand your market.
1. What is global electronic commerce?
Global ecommerce refers to the sale of products or services beyond geopolitical boundaries. It is usually defined as the country of origin (or founding or incorporating place) for a company. Online sales and marketing allows products or services to be sold in non-native countries.
It’s hard to comprehend numbers of this magnitude. They are both exciting and frightening at the same time. You’re not the only one looking at that $4.8 trillion barrel in your company’s face.
International ecommerce offers many benefits:
- Easy expansion to foreign markets
- It’s easier to find the right product-market fit
- Sales cycles for B2B are shorter
- International presence built faster
- Entry barriers are lower
Harvard Business Review stated that business leaders are struggling to adapt to a world they didn’t know existed a year ago. The myth of a world without borders has collapsed. The United States and UK are wobbling as traditional pillars of open market capitalism, while China is positioning itself to be the strongest defender of globalization.
Below, we’ll discuss this quote and many others. The big idea is that global ecommerce is too large an issue to ignore.
2. What is the size of the global ecommerce marketplace?
In 2021, the global ecommerce market will reach $4.89 trillion. This figure is expected to rise over the next few decades, proving that ecommerce without borders is becoming a lucrative option for online retailers.
Two years ago, only 13.6% of sales were made from online purchases. Today, that number is expected to reach 19.5% in 2021, a 45.8% increase in ecommerce market share over two years. Growth is expected to continue, reaching 21.8% by 2024, which translates to an 8.2 percentage point increase in just five years.
3. Global ecommerce growth
Global retail sales growth will continue rising and ecommerce will take over more market share. According to eMarketer online retail sales will exceed $6.39 trillion with ecommerce accounting for 21.8% of total retail sales.
Despite a difficult year for retail in 2020, all national markets covered by eMarketer experienced double-digit ecommerce growth. The incredible growth in Latin America (36.7%) was despite a 3.4% decline in overall retail sales. In 2020, Argentina’s ecommerce industry grew by 79%, followed closely by Singapore at 71.1%.
China continues to lead the global ecommerce market, with total online sales just under the $2.8 trillion mark. It also has the world’s most digital buyers, with 792.5 million, representing 33.3% of the global total. China is set to become the first country in history to transact more than half of its retail sales online, with 52.1% of retail happening through ecommerce.
The United States ecommerce market is forecast to reach over $843 billion in 2021, less than a third of China’s. After China and the US, the third-largest ecommerce market is the United Kingdom. The UK’s total ecommerce sales are expected to bring in $169 billion, which is a slight dip from $180 billion in 2020.
Two other countries round out the top five ecommerce markets: Japan is forecast at $144.08 billion in 2021, and South Korea is expected to bring in $120.56 billion.
Casey Armstrong, CMO of ecommerce fulfillment brand ShipBob adds that “While there is a lot of attention in ecommerce centers in the United States and Canada but there are a lot you can learn from large international players who have seen an even faster growth rate in ecommerce.”
He says, “Merchants have the ability to shift where they sell based upon this data and the demand for ecommerce in these countries.” ShipBob has fulfilled fulfillment centers in Canada, the UK, and Australia. We are currently opening another one in Australia.
4. 11 global ecommerce trends you should be paying attention to
What is the new norm? Mobile shopping is the new norm
The COVID-19 pandemic had a major impact on ecommerce worldwide. Shoppers flocked to the internet in droves after brick-and-mortar shops closed overnight. Experts believe that the pandemic has accelerated the transition to online shopping by as much five year.
M-commerce or mobile commerce is the process of shopping online using a mobile device such as a tablet or smartphone. Over the next few decades, M-commerce will continue its growth. The technological advances have made it possible for people to shop online from their smartphones.
In fact, three out of four consumers say they buy from their smartphones because it saves time.
Insider Intelligence predicts that mcommerce volume will increase at a 25.5% compound anual growth rate (CAGR), until 2024. This would bring it to $488 billion, 44% of all ecommerce transactions.
Resilience in supply chains
Morris Cohen, Wharton professor in operations, information, and decisions, stated that the impact of the coronavirus epidemic on supply chains was “a major disruption”, similar to an earthquake or tsunami. For decades, supply chain management’s core principles were:
- Supply at a low cost
- Inventory is minimal
Companies were driven by the coronavirus’s destruction of supply chains all over the globe to work on building resilience or finding ways to prevent supply chains from stopping and then quickly restore them when they do.
A study by Deloitte has revealed that 9/10 companies are making substantial investments to increase their supply chain resilience. 95% of executive panels considered stronger supply chains “important” or very important.
A strong supply chain not only makes ecommerce brands more agile, but it also allows them to scale up and launch new go–to-market strategies for cross-border commerce.
Are you aware of how resilient your supply chains need to be? Garntner identified six key factors.
- Risk appetite. What risk can your company take?
- Partner of vital importance. __S.80__
- What are your protections? Are you protecting a product, a government contract, or market access.
- Trade-offs __S.83__
- Who will pay? __S.85__ What can you do to offset these costs?
- Incentives and policies for national or trading bloc policy. __S.88__
Ecommerce is moving beyond the West.
Retail ecommerce sales will surpass all other countries by 2023 in Asia-Pacific. This is due to (1) rapid urbanization and technological advances; (2) more than 85 percent of the new middle-class growth in APAC; (3) a host governmental and private-led initiatives within China.
The B2B sector has seen a revival in manufacturing in APAC, China and other regions. The B2B gap is now even more apparent.
Entering China—and to a lesser degree APAC as a whole—presents a handful of thorny challenges:
- China makes sites loaded from foreign servers painfully slow, which can lead to lower conversion rates and poor search engine rankings.
- China does not allow advertising or social content via Facebook, Instagram and YouTube. However, Chinese companies can enter Western markets.
- Chinese consumers use ecommerce .
Is there a solution? Our report on The Shopify Effect reveals how entrepreneurs are changing the world.
Online shopping is possible even if you are not located in the United States.
Going global does not necessarily mean that you need to be present everywhere. Online shoppers are looking beyond their borders to make purchases. According to one study, India accounted for the largest percentage of overseas purchases made from the United States.
None of that demands multiple storefronts for each location or setting up international warehousing and fulfillment. One of the simplest ways to begin testing new markets is to prioritize online advertising or social media abroad. This requires an international approach to Google Ads, Product Listing Ads, Facebook, and Instagram through geographic targeting.
Even if you only track engagement, it is a test of viability to promote social content and advertising online. Perhaps the best strategy is to test marketplaces in target areas, which account for 62% of all global online sales.
China and APAC expansion
Despite these challenges, many DTC leaders have already made significant progress (and generated significant revenue). Tim Brown, cofounder of Allbirds, called China “the brand’s horizon to future expansion”.
Now the question is, how do they do it?
Three approaches are the most common approach to strategies:
- Partnering with local vendors
- Invest in a local team. This could include localization, marketing and logistics. Customer support can also be included.
- Establishing an online presence via third-party marketplaces (e.g. JD and Tmall) and/or a branded eCommerce site. Although they are more expensive, branded sites offer better data and customer relationships.
“There is no simple answer to China,” says Xavier Lee, Managing Director at Jumpstart Commerce, a Singapore-based agency with offices across Southeast Asia. “Reexamine your product to determine market fit. Start talking to Trade Associations. Get yourself on the digital ground with a WeChat account. Move around the different tier cities to glimpse how consumers behave. Be not afraid of growing slowly, be afraid only of standing still.”
Product-market fit differs by country and region
Choosing which regions to prioritize depends on product-market fit. This means that you must validate existing demand and potential opportunities in new areas. Deodorant, for example, has not been a success in China despite all the effort and money spent. This is primarily due to biological reasons.
Nielsen’s Connected commerce report gives a comprehensive breakdown of the most lucrative online industries by region. These verticals can be used as a starting point for global decisions.
Equally important is determining geographic potentials. Once a region has been identified, a country-by-country analysis should follow. NC State University’s Estimating Market Potential: Is There a Market? does this by outlining seven steps:
- Define the market segment.
- Define the boundaries of geographic areas.
- Define local competition
- Define the market’s size in monetary terms.
- Calculate a reasonable market share.
- Find the average annual consumption.
- Calculate the average selling price
The key to international analytics
You can create segments with Google Analytics’ location report (Audience>> Geo > Location) to analyze international traffic by country, region, city, or continent. Pay attention to the highest traffic areas and highest conversion rates. These could be where you have unknowingly gone global.
Also, pay attention to the areas where traffic may be high but conversions are low—these are likely clues as to where there is demand for your products but something onsite (e.g., language, currency, payment options, etc.) is a barrier to purchase.
If your ecommerce platform provides native reporting, you can also examine dashboards that show sessions by geography (traffic), customers and customers by country (shipping address), and sales by billing country or payment addresses.
“You wouldn’t believe the demand for Piper in countries like Australia, Japan, and Canada,” says Tommy Gibbons, Director of Marketing at Piper. “Shopify Plus allows us to easily see the location of our sales so we can quickly begin to advertise in parts of the world where we see the best product-market fit.”
Most important is the use of localized language
Global sales can be made or broken by being native to your website’s language, beyond Google Translate. This creates a positive customer experience, from the first impression to checkout. __S.146__
CSA Research discovered that 65% consumers prefer content written in their native language. 40 percent will not purchase from websites that aren’t in their native language.
This last finding bears closer examination. Localization can often feel overwhelming, like an all-or-nothing endeavor (either everything has to be country-specific or why bother?). It’s not.
A site does not need to invest in holistic translation because it is focusing on navigation and “some” content. It is crucial to get highly scrutinized areas of a website right: headlines, product names, etc. Once you have gained traction, full-scale translation with a native translator and local idioms is possible.
Different payment preferences exist around the globe
Online payment options are a major factor in buying decisions. It’s easy to forget how people pay. Cultural-centricity can blind us to the different purchase habits. Companies may not be able to pay the same amount as they have in the past, if they don’t carefully consider the data.
The coronavirus pandemic has accelerated consumers’ adoption for real-time payments by 41%. The global mobile payments sector makes up 46%, which is equal to $102.7 billion in total last year. Real-time payments refer to digital wallet options that allow users to make quick payments, such as Apple Pay and Google Pay.
But every region still has its own preferred methods.
Credit cards in North America are no surprise. Apple Pay and PayPal are close behind. Credit cards and the same digital payments dominate on a global scale.
Cash on delivery, unlike North America, is the preferred option in Eastern Europe, India and Africa. Direct debit must be enabled if you have target markets in India, Africa, and Asia.
Some people prefer small differences. Others see a wide gap. However, if you are looking to expand internationally, it is important to think about payment options in your target area.
Universal principles include ethics and “paths to expansion”.
A one-size-fits all system is not possible in these two areas: fair business practices and the three “paths to expansion” (detailed below). Federal Trade Commission’s E-Commerce: Selling Internationally–A Guide to Businesses is the best resource for global ethics. It has been signed by 28 countries. This guide answers a variety of questions that every business needs to address.
As for expansion, Forrester indicates that digital businesses “tend to follow a similar path and prioritize the same list of countries.”
That list of countries is helpful, but the characteristics of each “path” should be weighed carefully.
- Ecommerce has a large and well-developed presence
- Smaller markets that have strong infrastructures
- Markets for high-quality products in smaller overall markets
- Ecommerce development in its early stages
- Complex domestic regulations
- Small market sizes in digitally advanced countries
Let’s wait and see.
- Uncertain political climates
- Ecommerce markets that are emerging with long-term potential
- Infrastructural challenges
B2B ecommerce will be dominant over B2C
Statista’s B2B ecommerce sums up the situation with a punch. “Even though B2C has seen widespread adoption, it’s the recent evolution of B2B commerce that is attracting investors, buyers and sellers all around the world.” The difference in each market’s annual value is nearly fourfold (278.6%).
Why is B2B ecommerce such a ripe global opportunity?
- B2B marketplaces, such as Amazon Business, eWorldTrade and Joor, Alibaba, and others, operate much like their B2C counterparts. They operate in the same way as their B2C counterparts. They facilitate ready-made connections between sellers and buyers.
- B2B has been able to adopt the B2C preference of self-service and eliminate the need for large sales teams. Gartner discovered that B2B customers now wait until they have completed 57% of the purchase process before calling a representative. This is a significant advantage for ecommerce as self-directed online sales are the norm.
Many wholesale ecommerce customers want simple ordering. This is especially true for independent ecommerce retailers, small-to medium franchises and B2C outlets. These buyers often still rely on invoices and paper orders.
It is easy to create line sheets in digital format and then onboard new wholesale customers with simple-to-follow ordering processes.
It is time to cross-border
Global ecommerce is not a choice, but a necessity, according to all reports and data. It is crucial for your company’s future growth and survival. We have created a step by step framework to help you go global.
It is not an option. Multinational conglomerates don’t have to use it. It’s just one of many growth strategies. Global ecommerce is essential for any brand.
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