Global online retail market to Witness Widespread Expansion During 2025

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The global online retail market was valued at US$ 2,171.22 billion in 2016, according to the Global Online Retail Market Report, by Product Type (Fashion, Media & Entertainment, Beauty & Personal Care, Furniture, Food & Beverages, Sports & Recreation, Electronics, Toys, and Others) published by Coherent Market Insights. The global online retail market is expected to register a CAGR of 18.28% over the forecast period (2017 – 2025), reaching US$ 9,572.96 billion by 2025. The Asia Pacific region is expected to dominate the market over the forecast period and is projected to be the largest and fastest growing region.

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Key Trends and Analysis of Online Retail Market:

Among product types, the fashion segment held a dominant position in 2016 and is expected to retain its dominance throughout the forecast period. This is majorly attributed to advantages over brick and mortar stores such as broad product range, brand choice and ancillary services offered by market players. Fashion brands which operate out of offline stores such as Macy’s, Nordstrom, Kohl’s, Gap, and Victoria’s Secret have also bolstered their online presence as a response to the changing market dynamics which favor online retail. The segment was valued at US$ 347.50 billion in 2016 and is expected to exhibit a CAGR of 13.43% over the forecast period.

Key Takeaways from the Market:

Asia Pacific is expected to be the largest market for online retail during the forecast period. This can be attributed to the high online retail sales in China, which is the world’s largest online retail market. A large population coupled with high internet penetration rate in China has resulted in the creation of a large online retail market. According to the Chinese Ministry of Commerce, the growth rate of online retail in the country in 2017 was 32% over the previous year. The major market players in China are Alibaba Group, Tencent Holdings Ltd. and Inc. The region is also host to high growth economies such as India and Indonesia. Currently, the market penetration is low with online retail at 8.6% of total retail sales in the region. Although the high population of these countries has made them an attractive investment destination for industry players. However, poorly developed logistics and supply chain may hinder market growth in the region. The emergence of local players in a competitive market environment has profited consumers due to the attractive pricing of products by market players. In India, Flipkart and Amazon Inc. are offering heavily discounted products in order to secure market share in the country. Seasonal sales such as Big Billion Day and Great Indian Sale are modelled after Black Friday and Singles Day in U.S. and China respectively.

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North America was the second largest region in the global online retail market, accounting for 28.15% of the market in 2016. The region is projected to witness a CAGR of 15.32% in terms of revenue during the forecast period (2017 – 2025). The dominance is attributed to strong growth of online retail in the U.S. According to the U.S. Department of Commerce, online retail accounted for 13% of total retail sales in 2017, which is an increase over the 12.6% recorded in 2016. Growth of the U.S. online retail market can be largely attributed to Amazon Inc. which had a 34.7% contribution to the total retail growth in the country.


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