eCommerce businesses have grown exponentially in the last year, in part due to the global digitalisation caused by the coronavirus pandemic, with eCommerce revenues exceeding $4.28 trillion.
Boom in eCommerce
In the past decade, there has already been a substantial shift to digital as many companies have embraced the convenience and profitability of online business. However, the events of 2020 pushed this one step further.
Pre-existing eCommerce companies were perfectly set up to boost their businesses whilst many companies chose to enter the world of eCommerce for the first time - be it setting up a new business entirely, or shifting their physical presence online.
2020 saw a record-breaking year for people setting up new businesses, with the majority of these appearing as an online presence. Nasdaq predicts that by the year 2040, an overwhelming majority (95%) of all purchases will be through eCommerce.
How Much Was Spent on ECommerce in 2020?
According to statistics from Digital Commerce 360, consumers spent over $860 billion online with U.S merchants across 2020, a 44% year-on-year increase. This is the highest annual growth in at least two decades. Amazon, perhaps unsurprisingly, accounted for nearly one-third of all eCommerce in the United States.
As previously mentioned, the coronavirus pandemic is largely to credit for this. It is predicted that the pandemic resulted in an additional $174.87 of the final figures for eCommerce in 2020.
Globally, it is estimated that retail eCommerce sales amounted to 4.28 trillion US dollars, a figure which is expected to be 5.4 trillion US dollars by 2022.
Market Saturation in 2021
In 2021, there are an estimated 12 million to 24 million eCommerce sites globally, a statistic which is increasing by the day. Of these websites, fewer than 1 million sell more than $1,000 annually. Amazon is still the global leader dominating the majority of eCommerce categories including electronics, food, sport and fitness, health and medicine and home improvement. They have over 12 million products in their stores.
What Type of ECommerce Businesses Are Being Set Up?
The simple answer is everything. From food to eyewear to home gym equipment to mattresses, there is no end to the products available online. In general, a direct selling B2C model has been one of the most successful for eCommerce companies. This is when consumers buy products directly from the online retailers.
How are People Selling Their ECommerce Products?
Despite the exponential growth of the eCommerce industry, according to BigCommerce, over 40% of American small businesses still do not have their own website. Of those companies that do have websites, only 2.86% of eCommerce website visits convert into a purchase. Amazon and Ebay are still the world leaders, with many small businesses finding it more profitable to sell through these mainstream platforms than set up a dedicated website of their own.
What Platforms Do Businesses Use to Set Up Their ECommerce Websites?
The number one eCommerce platform is Shopify. Catering to businesses of all types and sizes, there are currently more than 1 million merchants using this platform for their services and Shopify websites make up over 1.5 million websites. Just in the US alone, Shopify has a market share of 31% for eCommerce businesses using Shopify websites.
In addition to being one of the most popular platforms around for eCommerce businesses, Shopify is also known as one of the most affordable. Basic Shopify plans begin at around $29 monthly with more comprehensive plans from around $79 monthly.
There are other plans such as Shopify Lite which is specifically for existing websites who require a payment widget. For larger companies, there is Shopify Plus for which the price plans cost around $2000 monthly.
Specific eCommerce Platforms vs. Website Builders
Other big names for eCommerce platforms include Magento, WooCommerce and Square Online. These services vary largely in price and will depend on the type of the business, the size of the business and online revenues.
Some businesses choose to design websites using specific website design platforms such as Squarespace. Squarespace is not specifically designed for eCommerce, meaning that their sales tools might be less advanced than platforms such as Shopify, however they do have a designated eCommerce website builder which may work out cheaper than Shopify. Their most basic plan works out as $12 monthly.
Around a similar price as Sparespace, Wix allows you to build websites from scratch from around $14 monthly. Wix eCommerce is specifically designed to help you set up your eCommerce business with user-friendly and intuitive features as well as a range of dedicated sales features.