Among the 28 largest internet companies in the world, 11 are e-commerce businesses. Per Statista, Global retail e-commerce sales are forecasted to reach $2.77 trillion this year. Consider that 62 percent of the world’s 7.2 billion population already owns a mobile phone, and by 2019, over 5 billion people will have access to the internet through their smartphones.
Yet while global e-commerce is undoubtedly thriving, it’s true potential remains untapped, especially when looking at the growth potential for these six booming e-commerce markets.
China’s 2017 retail e-commerce sales reached $1.2 trillion. From the rise of two of the top 10 internet companies in the world in JD.com and Alibaba, to socially adopted mega-shopping holidays like “Singles’ Day”—China’s large economy is turning more digital by the day. This is underscored by its high consumer confidence index (CCI), currently sitting at 122 as of January 2018. E-commerce accounts for 23 percent of China’s overall retail sales, and there’s a lot of room for growth. China boasts a forecasted compound annual growth rate (CAGR) over 17 percent. This is on par with many underdeveloped markets expecting to see major e-commerce strides in the near future.
While e-commerce only makes up 10 percent of the overall U.S. retail economy, that market is expected to reach $5.3 trillion in 2018. U.S. e-commerce sales generated over $431 million in revenue in 2017. With a healthy 96 percent of Americans shopping online, it’s projected to be a $535 billion market by 2019.
Over 19 percent of retail sales come from online purchase in the U.K. With an annual e-commerce revenue exceeding $121 billion, it’s the third biggest market in the world behind China and the U.S. As of March 2017, 87 percent of U.K. consumers had made an online purchase in the last year.
Japan was projected to generate over $111 billion dollars in retail e-commerce sales in 2017. Japan’s relatively small country size, single language, urban population and widespread tech adoption (91 percent) all contribute to its ideal e-commerce environment. E-commerce sales in Japan make up less than eight percent of all retail sales, leaving plenty of room for future growth.
Ninety-three percent of German consumers shopped online in 2016, according to research from Mintel. German e-commerce revenue accounted for nearly eight percent of overall retail sales in 2017 at roughly $77 billion. Growth ahead looks steady with 2018 and 2019 projected to haul in $82.5 and $87.5 billion, respectively. These numbers look even more encouraging when you consider under half of German retailers offer their goods online, leaving inevitable room for growth in the coming decade.
South Korea’s e-commerce boom has largely resulted from widespread mobile phone adoption and an overall tech-savvy culture. Having the fastest Wi-Fi in the world probably helps too. Their e-commerce sales accounted for 9.8 percent of its total retail sales in 2017 at $46.6 billion annual revenue. E-commerce revenues project to hit $50.5 billion in 2018.
Countries to Watch
These six countries may be the powerhouses, but e-commerce is growing globally. In India, where just 2.2 of total retail sales comes from e-commerce, a massive population and widespread mobile phone adoption make it a sleeping giant. In fact, India ranks just behind Malaysia for CAGR from 2016-2021, at 23 percent. Other Southeast Asian island countries like Indonesia, the Philippines, and Vietnam forecast for 20.7, 18.3, 17.2 percent, respectively. And don’t count out large countries like Brazil and Russia, the latter of which boasts the largest number of internet users in Europe.
Why Borders Don’t Matter
Aside from country-specific trends, the main thing to take away is that the world is going online to shop for the things they need. According to a Nielsen report, 57 percent of online shoppers purchased from an overseas retailer in the last six months. Only one continent—North America—saw less than a majority (45 percent) of shoppers making an overseas purchase.
Global e-commerce is on pace to truly be global, as consumers become more comfortable looking to e-stores abroad for more product selection, better prices, or more availability. This borderless e-commerce system will handsomely reward the companies that learn how to build an ecommerce website with appeal to a global audience and personalized experiences.