The global e-commerce platform market size was valued at USD 5.05 billion in 2022 and is projected to reach a value of USD 14.48 billion by 2031, registering a CAGR of 12.4% during the forecast period 2023-2031.
An e-commerce platform is a software application that enables the functioning of online businesses to centralize their operations, manage their website, and fulfill client orders. It includes customizable site templates, search engine optimization, an integrated shopping cart, email marketing, inventory management, and analytics. E-commerce platforms help small-scale retailers cater to millions of customers and generate high revenue in the online industry. Additionally, these platforms are developed with best-in-class features to help small-scale retailers grow into large businesses, creating various opportunities for small vendors to gain high traffic.
Artificial Intelligence and the Internet of Things have become an integral part of technology with the deployment of cloud computing and big data and faster processing speeds. Growing technological advancements in AI, IoT, and digital engagement through virtual and augmented reality are some of the factors expected to positively impact market growth. Machine learning applied across e-commerce platforms enhances customer engagement and assists market players in identifying exceptional target prospects. Moreover, the utilization of IoT devices has widened the scope of e-commerce platforms as they help personalize advertising for various businesses and target a specific group of customers.
The cloud-based segment is expected to hold a strong share in the e-commerce platform market during the forecast period, 2019–2026. A cloud-based e-commerce solution provides online services to help reduce or eliminate the need to maintain in-house high-cost hardware, software, and network infrastructure. In 2016, Snapdeal launched its private cloud ‘Cirrus’, which would help Snapdeal handle its long-term growth in traffic and analyze big data to create personalized and relevant experiences for its consumers. Cloud-based e-commerce solutions are intended to provide higher scalability and meet the requirements of seasonal or hourly promotion peaks in traffic, such as during Big Billion Day, Black Friday, and Cyber Monday.
The growing focus on developing innovative features in on-premise software solutions is a key factor driving the growth of the segment. On-premise software solutions are typically custom-built to serve the purposes of a particular business and generally priced under a one-time perpetual license fee. However, these platforms have certain limitations as compared to cloud-based platforms; for instance, the cost associated with solutions provided by on-premise platforms is higher than that provided by cloud-based platforms. Despite the challenges, the on-premise segment holds a considerable value share in the e-commerce platform market.
Emerging trends in developing countries and the evolving fashion retail market based on the constructive demographic dividend, retail-specific policies, and consumer buying behavior are some of the factors that govern the growth of the fashion market. E-commerce has empowered various luxury fashion companies such as Lifestyle and Zara to be broadly accessible to a worldwide market and forms a considerable part of the global economy. In 2018, Walmart, an American multinational retail corporation, acquired Flipkart Pvt Ltd to create a strong base in the Indian e-commerce market. Moreover, the e-commerce market drive growth for merchants with the use of artificial intelligence (AI) and various other e-commerce tools, which provide a relevant and personalized customer experience.
The electrical and electronics segment is expected to witness significant growth in the global e-commerce platform market. The electrical and electronics industry is acknowledged as one of the most active sectors worldwide, with positive growth prospects on account of the increasing dependency on mobile devices. According to the American Association of Advertising Agencies, 70% of the Indian population and 67% of the Indonesian population are active on mobile; this stat depicts the shift to mobiles, which will provide impetus to the growth of the e-commerce platform market. Prolific growth in the electronic and electrical segment’s customer base is positively influencing retailers to redefine their business models to better address customer expectations and, subsequently, gain larger market shares.
North America is expected to witness dynamic growth in the e-commerce platform market. The region is home to a great many start-ups related to e-commerce platforms – a key factor driving market growth in the region. According to the International Post Cooperation, the U.S. retail e-commerce market is one of the largest in the world and accounts for around 20% of the global sales; in the U.S., around 9% of the retail sales in 2016 were made online, amounting to USD 451 billion. Additionally, the growth of mobile commerce and the availability of attractive discounts and deals on e-commerce platform collectively drive market growth in the region; for instance, Amazon orders via its mobile application during Amazon’s Prime Day doubled in 2016 as compared to 2015
Europe is a prominent consumer base for the e-commerce sector with its 20 national commerce associations, which include the Greek e-commerce Association (Greece), e-Commerce Poland Chamber of Digital Economy (Poland), and KAUPPA.FI (Finland), among others. The region is expected to retain its market position throughout the forecast period on account of government initiatives such as a better framework for online merchants, which helps them increase sales and revenue. According to EuroCommerce, in 2018, the European e-Commerce sector represented over 75,000 companies selling goods and services online.
Asia-Pacific (APAC) has been witnessing rapid growth in the e-commerce platform market since the past few years. According to the International Post Corporation (IPC), retail e-commerce sales reached around USD 1.4 trillion in 2018, recording an increment of 30% as compared to 2016. The increasing adoption of online shopping in developing countries such as China, India, and Singapore can be attributed to the safe and secure environment provided by retailers, which enables consumers to purchase more frequently. For instance, the India e-commerce market is growing at a rapid pace, owing to government initiatives such as 100% foreign direct investment in B2B & B2C e-commerce platforms. As per the new FDI policy, online entities, through foreign investment, cannot offer products that are sold by retailers in which they hold an equity stake.
Latin America (LATAM) is projected to witness significant growth in the global e-commerce platform market during the forecast period, owing to the increasing number of internet users and rising social media user base. According to Internet World Stats, the number of internet users in South America was around 417 million in 2018. Increasing infrastructure investments and growth of m-commerce are projected to have a positive impact on the growth of the South America e-commerce platform market as retailers are taking cognizance of the consumer demand for secure monetary transaction
The Middle East and Africa region is expected to witness considerable growth in the e-commerce platform market, owing to the region’s high spending potential as a result of a high per capita income. In the UAE, a new e-Commerce regulation from the Dubai Free Zones Council was implemented to encourage more foreign direct investment in Dubai’s e-commerce sector and make the Emirates a favorable environment for e-commerce companies. Additionally, increasing investments by various companies are fostering market growth in the Middle East and Africa region. For instance, in 2018, Amazon acquired Souq, an e-Commerce company of the Middle East & Africa, for USD 580 million, thereby strengthening its position in the region.
Some of the prominent players in the global e-commerce platform market are
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