Place Your Bets! Which E-commerce Markets Are on the Rise in 2018
The best way to predict what global e-commerce in 2018 has installed for us, is by checking e-commerce growth rates in 2017. Is Europe’s e-commerce really as gloomy as online retail experts predicted? What’s going on with South America and who will win the China vs. USA e-commerce rivalry?
In early 2017 we published a post about the top 15 e-commerce markets in 2017 together with predictions for what is to come. With new data available, we are curious what has changed since. And in which direction is the global e-commerce market going to turn in 2018.
Where to Set-Up Digital Shop in 2018
The chart below shows the top 10 markets by an increase in their e-commerce value growth rate in 2017. By checking the chart below you’ll realize that countries in Southeast Asia are on the rise, while China keeps on beating the USA in the world e-commerce game.
- Thailand, Malaysia and Vietnam rule the top 3 positions. The value growth rates of each local e-commerce are 104%, 88% and 69% respectively.
- China takes 4th place (52%) showing more strength than USA (5%), which shares 10th place with Japan.
- Though a pioneer in online retail, South Korea‘s e-commerce can still expect higher sales revenue in the future. The country is 5th on the chart with 33% value growth rate.
- Europe has three markets among the top 10: Spain (21%), UK (8%) and France (7%).
- Argentina is the only South American country amongst the top 10. It takes 7th place with an e-commerce value growth rate of 7% in 2017.
The Pacific Tigers Have Arrived
We’re glad to confirm that our predictions about the rise of Asian Pacific e-commerce came true. What’s behind the fast development of Thailand, Malaysia and Vietnam? All three markets are in their development stage. That’s the main reason for such high e-commerce value growth rates.
The local e-commerce scene is developing in two ways. One is due to the internationalization trend of big names such as Amazon and eBay and even Chinese Alibaba and Rakuten. As the level of English proficiency is steadily rising in Southeast Asia, it is getting easier for Western brands to enter the market.
On the other hand, local and regional e-commerce platforms persuade the majority of users. Lazada offers a variety of goods from electronics and home appliances to clothing. Though established by Rocket Internet, a German e-commerce company and online start-up incubator, in 2016 Alibaba Group bought a controlling share of the company to strengthen its influences in the region. Zalora is purely a fashion retail site and reminds you a bit of Zara, doesn’t it? Coincidently or not, it was also established by Rocket Internet.
The boost of the Vietnamese, Malaysian and Thai market is caused by Western benefactors seizing the opportunity to conquer digitally lesser developed Southeast Asian countries.
Europe is Back on Track
Though we underestimated Europe’s e-commerce power, we’re glad we were wrong about this one. According to a study performed by the Ecommerce Foundation, Europe has the highest E-GDP (4.91%) among the other regions: North America, South America, Middle and East Africa and the Asia Pacific. The majority of e-shoppers still look for clothing and sports goods. While travel and accommodation are becoming second favorite. This is due to Airbnb’s increasing presence in the market.
— Ecommerce Europe (@Ecommerce_EU) December 27, 2017
Why Europe and its markets: UK, France, Spain and Germany insist among the leading e-commerce players is due to the harmonization of the regional market. EU’s strategy to harmonize shipping costs between countries, simplify VAT rules for e-commerce retailers and boost the free flow of digital data is definitely paying off.
According to Ecommerce Foundation UK, Germany, France and Spain are among the top ten countries with the highest internet penetration rates. Europe as a region also has the highest internet penetration in the world – 80%. 68% of EU’s internet users shop online and 33% of them ordered goods from another EU country. These are the stats which keep EU e-commerce in the game.
Good news again for #ecommerce, #digitalsinglemarket: agreement on simpler #VAT rules for businesses selling online a few days after we reached deal to end unjustified #geoblocking for consumers shopping online https://t.co/KjCZbuQd4F #eVAT
— Andrus Ansip (@Ansip_EU) December 5, 2017
Our Bet Is on China
China is continuously seeking to beat USA in the world e-commerce game. Today experts talk about the beginning of the e-commerce boom in the country. Retail sales account for nearly a third of the global e-commerce revenue. The country scores high in mobile e-shopping as 47% of shoppers utilizes mobile wallet payment method. In the USA the same figure is only 17%. Alibaba Group continuously seeks to expand and grow into a multinational retail brand.
If China wishes to establish itself as the queen of online retail, it still needs to work on certain details. US logistic and customer services score higher than Chinese. Another major factor is that the biggest names of global e-commerce like eBay, Amazon and Apple are of US origin. Same goes for social media, e.g. Facebook.
2018 has just begun, but with new players on the block, it promises not to disappoint. Iff you’re looking to expand to more exotic destinations, the Asian Pacific is a good option. Small online retailers should definitely consider connecting with larger shopping platforms like Amazon or Alibaba. The two e-commerce giants are in no way ready to slow down, quite the opposite.
Need more info about global e-commerce trends? Not sure if your products or services are ready for an international expansion? We have the skills to help you out. Ask us what’s on your mind and we’ll get back to you in a jiff.
Featured image source: Pixabay.com