Report

Global e-commerce market was valued at USD 8 trillion in 2023, expected to reach USD 18.47 trillion in 2031, with a CAGR of 11% for the forecast period between 2024 and 2031. The global population of smartphone users is growing due to increased internet penetration. Digital content, travel and leisure, financial services, and e-tailing are a few e-commerce alternatives that are becoming quite popular among internet customers. Therefore, customer technology knowledge is anticipated to positively affect e-commerce market expansion. The increasing need for quicker browsing has fueled the growth of connectivity, which has fueled the development of 4G and 5G technologies.
Since 4G and 5G technology offer users a smooth, uninterrupted experience, their deployment for connectivity purposes is anticipated to positively affect e-commerce market growth globally. Additionally, smartphone use is growing at a notable rate, which exposes customers to more online shopping options. Thus, it is anticipated that the expanding use of smartphones will drive the market expansion.
Over the forecast year, an increase in small and medium-sized businesses is expected to drive down the demand. Small and medium-sized enterprises are expanding significantly, particularly in Russia, South Africa, and India. For instance, India has seen a rise in start-ups due to programs such as Make in India and Start-up India. These businesses use online marketplaces to conduct trade, which fuels the market's expansion. Furthermore, rising consumer wealth is anticipated throughout the forecast period to fuel the market expansion.
Large corporations and established organizations are shifting towards online business since it requires lesser infrastructure and communication costs. Through e-commerce, the company can more easily access its consumers, gaining essential exposure to the business world. The growing significance of online marketing platforms, such as Facebook and Google AdWords, drives e-commerce. As social media apps are so widely used, many marketing possibilities are available these days, propelling the e-commerce market towards growth trajectories. In October 2023, Indian e-commerce giant Flipkart introduced Flipkart Commerce Cloud, a retail technology solution for global retailers, marketplaces, and e-commerce platforms. The company plans to assist retailers worldwide in expanding their businesses and meeting business needs through AI-driven solutions. The portfolio of solutions includes the whole marketplace technological stack in a box, retail media, pricing, inventory management, and forecasting tools.
Additionally, customers' preference for internet shopping is growing as most brick-and-mortar stores are closed due to the COVID-19 pandemic. Major economies impacted by the pandemic, including the United States, China, India, and Italy, resulted in the growth of e-commerce.
Growing Smartphone Usage Fuels Market Growth
Increasing internet penetration rate and rising use of smartphones worldwide drive the growth of the global e-commerce market. In 2023, there were 5.4 trillion internet users worldwide, or 67% of the world population. With the increased reliance of customers on digital devices, it is anticipated that within the next five years, mobile phones will gradually overtake other channels as the preferred means of online shopping for consumers. Technological innovations such as social shopping, 5G wi-fi, and branded shopping apps have allowed people to shop on their phones. Retailers can now track and analyze customer data for more focused marketing, as well as boost sales, conversions, and loyalty with this powerful tool. Brands are testing augmented and virtual reality retail along with virtual purchasing on multiple e-commerce platforms. Customers have no boundaries in the 3D virtual world known as the metaverse. No matter where they are in the world, people can connect with products in a metaverse. For instance, in March 2024, France-based baby care brand Mustela was launched in the United Kingdom, online as well as offline, with major product categories being body lotion cleansing, facial cream products, shampoo, and bubble bath.
Technological Advancements Drive the E-commerce Industry
Technological advancements in voice commerce and smart assistants transform how consumers engage and transact with retailers online. Voice-enabled devices such as smart speakers and virtual assistants have gained traction as a convenient shopping method. Amazon Alexa, Google Assistant, and other such smart assistants perform various tasks on behalf of the users, making the users feel at ease while accessing desired information. In an e-commerce context, these assistants allow users to browse products and make the final purchase using local language interactions.
In January 2024, Alibaba.com, a prominent platform for international business-to-business (B2B) e-commerce and a member of the Alibaba International Digital Commerce Group (AIDC), unveiled its most recent AI-powered smart assistant features. In the fast-paced world of international trade, the Smart Assistant, an AI-powered global sourcing tool, serves both novice and seasoned business owners. Voice search is used by 27% of all internet users worldwide on mobile devices. Not only convenience, but voice commerce offers speed and accessibility to the users. Manual navigation through the websites is not required while using voice commerce, enabling users to multitask. Furthermore, intuitive and conversational shopping takes place with the use of voice-based interactions.
Asia-Pacific Dominates the Market
Asia-Pacific leads to the global e-commerce market and is predicted to grow at the highest rate between 2024 and 2031. It is explained by companies' increasing inclination to conduct business via B2B e-commerce platforms. Moreover, increasing internet usage and the development of infrastructure facilities are anticipated to drive market expansion in the region.
In addition, the proliferation of smartphones is predicted to drive the demand for B2B e-commerce adoption in the region. According to GSMA, the smartphone adoption rate in Asia-Pacific in 2022 was 62%, which is estimated to be 94% by 2030. In South Korea, in December 2023, SK Telecom launched A. Call Translator offering real-time interpretation during calls using artificial intelligence. The company intends to incorporate the technology into several businesses, including e-commerce, to generate more personalized service bundles for clients instantly and whenever needed. Similarly, in Japan, Rakuten has implemented generative model-based online chatbots and recommendation systems to offer customized consumer experiences, boosting the e-commerce industry in the country. Such advancements are contributing to the region's dominance in the global e-commerce market.
Future Market Scenario (2024 - 2031F)
- With the increasing number of global mobile phone users, companies are likely to focus on app and website optimization, enhancing the shopping experiences of the customers.
- Technological advancements in the form of AR, AI, and VR will shape the e-commerce market landscape, enabling personalized shopping experiences, enhancing product visualization, and streamlining the purchase processes.
- Integration of omnichannel retail strategies will take place on a much larger scale, to provide smooth shopping experiences across multiple channels, including online and offline. Features such as click and collect, buy online, and in-store pick up are anticipated to become standard offerings to meet consumer expectations for convenience.
Key Players Landscape and Outlook
Global e-commerce market is characterized by several players competing for their respective market share. Prominent players like Amazon.com, Inc., Walmart Inc., Apple, Inc., eBay, Inc., and Alibaba Group Holding Limited dominate the market with their extensive product offerings, robust logistics infrastructure, and innovative technologies. These companies are expected to hold their market share through strategic mergers and acquisitions, leading to diversification into new business verticals.
Regional players focus on specific product categories contributing to the evolving competitive landscape. The outlook for the industry seems positive with rising competition, technological advancements, and evolving consumer preferences. Key players will need to adapt to these trends by investing in customer centric innovations, enhancing the shopping experience of consumers. In November 2023, Bamboo Rose collaborated with retail giant Walmart Inc. to develop and implement an enterprise sourcing platform (ESP), enabling Walmart Sourcing associates to partner more easily with buyers, suppliers, and product development teams, enhancing the method by which the company imports and acquires items for resale.