E-Commerce Market to grow by USD 12.95 Trillion (2023-2027), Benefits of E-Commerce Platforms Drive Growth, Report Highlights AI-Powered Market Evolution - Technavio

NEW YORK, Jan. 27, 2025 /PRNewswire/ -- Report on how AI is driving market transformation - The global e-commerce market size is estimated to grow by USD 12.95 trillion from 2023-2027, according to Technavio. The market is estimated to grow at a CAGR of almost 27.15%  during the forecast period. Advantages of e-commerce platforms is driving market growth, with a trend towards enhancement of consumer experience through technologies. However, regulatory issues  poses a challenge. Key market players include Alibaba Group Holding Ltd, Amazon.com Inc., Apple Inc., Best Buy Co. Inc., Costco Wholesale Corp., Ebates Performance Marketing Inc., eBay Inc., Flipkart Internet Pvt. Ltd., Groupon Inc., Inter IKEA Systems B.V., JD.com Inc., Lojas Americanas S.A., Otto GmbH and Co. KG, priceline.com LLC, Shopify Inc., The Home Depot Inc., Walmart Inc., Wayfair Inc., Zalando SE, and Etsy Inc..

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Market Driver

The E-Commerce Market is experiencing significant growth, driven by the increasing internet population and the adoption of smartphones. Digital content in travel and leisure, financial services, and other sectors is attracting large enterprises and established organizations to e-tailing. Technological awareness and connectivity are crucial for user experience, with browsing and online purchasing becoming the norm. The middle-class population's increasing wealth and communication tools like Google ads and Facebook ads are driving online marketing. Infrastructure and operational costs, including inventory and payment gateways, are key considerations. Vertical and specialized marketplaces are gaining popularity, with the marketplace model and direct model co-existing. Rising internet penetration and consumer tastes favor e-commerce, with major players like Bharat Craft and Alibaba leading the way. MSMEs are also leveraging e-commerce platforms like GeM. Mobile shopping, branded apps, 5G Wi-Fi, social shopping, and emerging technologies like augmented and virtual reality are shaping the future of the E-Commerce Market. 

E-commerce technology has advanced significantly, with vendors integrating augmented reality (AR) and virtual reality (VR) to enhance the shopping experience. In May 2019, IKEA introduced a VR app, enabling users to virtually decorate their homes. By inputting room dimensions and selecting products, customers can view items in different colors and textures using their smartphones. This innovative approach allows for more informed purchasing decisions in the home decor segment. 

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 Market Challenges

• The E-Commerce Market is experiencing significant growth, driven by the increasing smartphone-using population and rising internet penetration. Businesses face challenges in reaching an internet-connected client base, particularly in sectors like Travel and Leisure, Financial Services, and E-tailing. Technological awareness is crucial for communication and infrastructure development. Consumer wealth and adoption of smartphones have led in online shopping. Established organizations and large enterprises dominate the market, using online marketing tools like Google ads and Facebook ads, as well as social media applications. Operational costs, inventory costs, and payment gateways are key concerns. Vertical and specialized marketplaces, such as Bharat Craft and GeM, cater to niche markets. The marketplace model and direct model coexist, with major e-commerce players like Alibaba and MSMEs leveraging social media for sales. User experience, browsing, and connectivity are essential for customer engagement. Advancements in technology, including 5G Wi-Fi, augmented reality, virtual reality, and the metaverse, offer opportunities for innovative online purchasing experiences. Retailers and banks collaborate to provide seamless payment gateways. The middle-class population continues to adopt online shopping, making it a vital aspect of the business landscape.
• The global e-commerce market faces regulatory challenges that impact businesses. Inconsistent laws, such as taxation, vary between countries, including developed ones like the US. Domestic incorporation is another issue, with governments favoring local e-commerce companies to boost employment and business opportunities. Legal limitations also exist, as each country sets its own rules on sellable items. These factors necessitate international e-commerce companies to adapt and comply with local regulations to expand their reach.

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Segment Overview 

This e-commerce market report extensively covers market segmentation by  

1. Application 
• 1.1 Home appliances
• 1.2 Fashion products
• 1.3 Groceries
• 1.4 Books
• 1.5 Others
2. Type 
• 2.1 B2B
• 2.2 B2C
3. Geography 
• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 South America
• 3.5 Middle East and Africa

1.1 Home appliances-  The home appliances segment in the e-commerce market encompasses consumer electronics, houseware, and kitchen appliances. This segment is mature and has experienced a declining growth rate in recent years. A major challenge for this segment is the absence of a comprehensive logistics platform for delivering home appliances purchased online. In developing countries, logistical barriers pose significant issues. Nevertheless, the home appliances segment is projected to remain the largest revenue generator in the global e-commerce market due to the rising standard of living and the increasing trend of upgrading homes. The credibility of e-commerce brands and the convenience they offer are significant factors contributing to the segment's revenue. Additionally, improving recycling initiatives have led to a decrease in consumer-generated electronic waste, making the segment more sustainable. Despite the convenience of online shopping, many consumers still prefer purchasing home appliances from physical stores to ensure they can see, touch, or try the products before buying. In response, online retailers are establishing showrooms, offering multichannel shopping experiences. These showrooms allow consumers to interact with products and ask questions, bridging the gap between online and offline shopping.

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Research Analysis

The e-commerce market is experiencing exponential growth, fueled by the smartphone-using population and their increasing adoption of digital content. Travel and leisure, financial services, and various other industries are capitalizing on this trend by offering goods and services online. Technological awareness and connectivity have become essential for businesses looking to reach consumers, leading to the widespread use of e-tailing and online marketing tools like Google ads and Facebook ads. User experience is a top priority, with companies investing in infrastructure to ensure seamless browsing and buying processes. The rise of vertical and specialized marketplaces has also contributed to the market's growth, allowing for more efficient buying and selling of goods and services. Despite operational costs, including inventory, the benefits of reaching a larger consumer base and reducing physical storefront expenses make e-commerce an attractive option for established organizations and large enterprises. Communication and social media applications further enhance the consumer experience, making online shopping a convenient and accessible option for all.

Market Research Overview

The E-Commerce Market is experiencing exponential growth, fueled by the smartphone-using population and their increasing digital content consumption. Travel and leisure, financial services, and various other industries have embraced e-tailing, driven by technological awareness and the adoption of smartphones. Online shopping is becoming the norm, with consumer wealth fueling the growth of established organizations and large enterprises. Communication and infrastructure have improved, enabling online marketing tools like Google ads and Facebook ads to reach a wider audience. Social media applications have become essential for online purchasing, with payment gateways provided by banks and retailers ensuring secure transactions. The marketplace model and direct model coexist, catering to the middle-class population and specialized marketplaces. The rise of 5G Wi-Fi, social shopping, and emerging technologies like augmented reality, virtual reality, and the metaverse, are set to revolutionize the e-commerce landscape. Bharat Craft and Alibaba are notable players in this market, along with numerous MSMEs and major e-commerce players, all vying for a share of the ever-expanding internet-connected client base.

Table of Contents:

1. Executive Summary
2. Market Landscape
3. Market Sizing
4. Historic Market Size
5. Five Forces Analysis
6. Market Segmentation
   • Application
     • Home Appliances
     • Fashion Products
     • Groceries
     • Books
     • Others
   • Type
     • B2B
     • B2C
   • Geography
     • APAC
     • North America
     • Europe
     • South America
     • Middle East And Africa
7. Customer Landscape
8. Geographic Landscape
9. Drivers, Challenges, and Trends
10. Company Landscape
11. Company Analysis
12. Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio