Why are e-tailers the future?

by Melanie Victoriano (Content Editor)

Image source: Getty

Why are e-tailers the future? 

The decrease in global retail sales and the rise of e-tailers

Trends in global retail sales show that the COVID-19 pandemic changed customers’ shopping practices as they turned to e-tailers as sources of their purchases amid lockdowns. Understandably, traditional retail sales declined globally.

E-commerce is taking over an increasing proportion of total retail sales. In 2021, according to research by Statista, about 19.6 percent of global retail sales was e-commerce.  This market share is forecast to grow to 25 percent by 2025.  UN trade experts have described the rise of e-tailing since 2020 as “dramatic.”

Many business buyers have turned to e-tail websites and other online services to meet their sourcing needs due to the pandemic. In a 2021 survey, over 80 percent of buyers used online sourcing services, and 44 percent of the buyers believed online sourcing was very effective.

Advantages of online sourcing

We conducted an analysis of buyers’ behavior, and our findings show that the rise of e-tailers is due to the following advantages of online sourcing:

Simplifies the sourcing process

• Online B2B transactions are relatively simple, with reduced third-party or intermediary involvement.

Saves time

• Compared with physical and traditional B2B sourcing, online sourcing is quick.

Supports the digital generation

• Today’s businesspeople are more accustomed to digital communication, unlike previous generations who were more used to person-to-person communication.

Makes product comparison more efficient

• During the initial product development stage, similar products can be compared in a faster way.

Has fewer time and space restrictions

• Online B2B transactions are less affected by geography and time zones.

Mobile sales explosion and a leap of e-commerce sales

Digitalization has created new sales channels. Consumers are using mobile devices to fulfil their purchasing needs now more than ever. The value of online sales is also increasing. According to research by Statista, global retail e-commerce sales totalled $4.9 trillion in 2021. That figure is forecast to rise by 50 percent to reach $7.4 trillion in 2025.

Core markets of e-tailers

In 2019, the United States was in a class of its own among the world’s top economies with its total e-commerce sales outstripping the next three biggest online buyers -- Japan, China, and Korea – combined.

In 2022, according to eMarketer/Insider Intelligence, the leading e-commerce markets in terms of absolute dollar amounts of sales are:  China, with $3 trillion; United States, $1 trillion; United Kingdom, $246 billion; and South Korea, $143 billion. The United Nations Conference on Trade and Development (UNCTAD) also reported that the greatest spikes in online shopping took place in developing countries, particularly the United Arab Emirates, Bahrain, Uzbekistan, and Thailand. Among developed countries, the greatest increases were seen in Greece, Ireland, Hungary, and Romania.

Differences in online shopping among countries were due to the extent of digitalization and internet penetration, according to UNCTAD.

Do you want to know more about e-tailing and what products are in-demand online? Find out here.