The Growth of E-commerce Retail Sales

Published: 2021-09-14 19:15:10
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One would be curious looking back at the growth rate of online sales and compared with the rapid growth seen so far at the expense of traditional ways of doing business. The particular percentage of e-commerce retail sales are maybe, surprisingly small at around 9% of sales in the US and 17% in the UK, but with manageable growth. The Chinese research giant, iresearch contribution to China’s total consumption which had a projected growth rate of 27.2 percent in 2016 from 7.9 percent in 2013. According to Haar, J., & Ernst, R., (2016), the online shoppers as percent of total internet users in China, U.S, U.K, Japan and Germany were 48.90%, 74.20%, 77.60%, 55.80% and 79.50% respectively but considering the population of each of these countries, it meant that China have more internet users and online shoppers. Still from the author, the Chinese e-commerce market was forecasted to overtake the U.S, U.K, Germany and Japan in 2020 to reach 7.5 percent of the world’s total retail transactions which will amount to $540 billion. To further buttress this point, Alibaba is expected to reach a market share of e-commerce of 80 percent of the world’s retail sales. In the same vein, as explained by the writer, Alibaba is first among equals in instant messaging and micro blogging market which are the two prominent aspect of digital economy, it was found out that Alibaba contributed a $1.2 billion and $586 million investment in a video site Youku Todou (China’s Youtube version) launched in 1999 and Weibo (Twitter version in China) as well as cloud infrastructure services.
In 2016, e-commerce retail sales worldwide amounted to $1.86 trillion and e-retail revenues were projected to reach $4.48 trillion in 2021. Online shopping is one of the most popular online activities worldwide but the usage varied by region in 2016, an estimated 19 percent of all retail sales in China occurred via internet but in Japan the share was only 6.7 percent. Linking this instance with China, Alibaba Group Holding Limited is the leading e-commerce provider in China, offering various spectrum of B2B, B2C and C2C e-commerce services as well as mobile payments. The firm also started its own instant messaging app known as Laiwang in order to compete with the instant messaging giant WeChat. Alibaba’s position in Chinese e-commerce market was likened to Wal-Mart in the U.S, Alibaba whose market share of e-commerce was 7.4 percent in China handled a business transaction worth $248 billion while Wal-Mart has a 7.7 percent market share of U.S retail sales with $336 billion in total gross sales., the group is now the leading e-commerce provider in Asia and its online retail platform Tmall are also the market leaders in their respective business sector. Analysis from the Dave Chaffey, 2017 (sourced online on 29.01.2018) explained that, in the year ending March 31, 2016, the Alibaba Group’s annual revenue amounted to 101 billion Yuan (approximately 15.69 billion U.S. dollars) with a net income of 24.32 billion Yuan (3.73 billion U.S. dollars). The majority of group revenues are generated through its various e-commerce ventures with local e-commerce accounting for 83 percent of Alibaba’s income in fiscal 2016. As of the second quarter of 2016, the group generated an online shopping gross merchandise volume of 837 billion Yuan through its online shopping properties Taobao Marketplace, Tmall; with total number of active online buyers across these properties amounting to 443 million. The current digital buying penetration rate among internet users in China is close to 70 percent. The increasing usage of mobile internet has opened up the possibilities of mobile shopping for both consumers and e-retailers. Alibaba has seen a rapid growth of mobile usage on its online shopping properties with a 75 percent mobile share of gross merchandise volume, up from 55 percent in the previous year. The overall share of mobile shopping revenues was 75 percent as of the third quarter of 2016 with a 2.8 percent mobile conversion rate. The countries with the highest online shares of their internal markets were the UK (17.8% forecast for 2017); Germany (15.1% for 2017); and France (10.0% forecast for 2017). Other countries with high market shares are Sweden and The Netherlands. Germany has had the fastest-growing online sector for the last few years, but in 2017 its 16.4% forecast growth was forecasted to be surpassed by Spain (+19.2%), Poland (17.2%) and Netherlands (17.0%) but recent projection of UK smart phone sales show that in 2018 more than half of sales will be online, but this is not likely to increase dramatically as it has previously. In 5 years, in 2021 the percentage of e-commerce sales will be 56% showing the ongoing importance of desktop experiences and providing cross-device experiences.

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