As time flies, more and more businesses are choosing to sell their products online. Retailers often choose to complete their physical offer with an online offer, thus creating a phygital strategy. In order to do so, two solutions exist :
- Marketplaces: places where your customers can buy your products
- Building an E-Commerce: your customers can buy your products on your own website
Both these solutions have their advantages. You can even merge them to create the perfect online strategy.
E-Commerce’s benefit is that you, as a digital seller, can easily apply a cross-border strategy. What does it mean? It means that you want to sell your products online and you decide to make them available across the world. Of course, as E-Commerce is growing, some markets are more profitable than others. The top 10 E-Commerce markets in the world are very different, but how and why?
A successful market relies on its customers’ habits. These habits vary from a country to another regarding payment solutions, shipping preferences or even their access to the internet. Plus, you need to take a decision: are you aiming at a highly competitive market, or are you aiming at a niche market?
As mentioned before, customers influence their market’s E-Commerce landscape. The latter depends on the customers’ ability and desire to shop online. This desire is formed by a mix of trust and habits, relying on already-established digital businesses’ success.
To choose the best market for your cross-border strategy, you need to have a full view of the digital commerce’s state in these countries / regions of the world. First, you have to take a look at the biggest markets in terms of sales.
The top 10 E-Commerce markets in terms of sales
Some markets represent a lot more sales than others. It is easily observed that these markets also rely a lot on the countries’ population. Indeed, sales and population are proportional.
The top 5 countries :
E-Commerce is literally booming right now in South East Asia. China is the most prominent market in digital commerce. The market is currently led by Alibaba group, through its online commerce subsidiaries :
- Taobao ;
- Alibaba.com ;
- Tmall ;
- Fliggy Corporate ;
- 11 Main ;
All of these subsidiaries represent a big part of Alibaba Group’s revenue. In 2017, E-Commerce represented $672 billion in terms of sales and 15.9% of the country’s share of total retail sales.
United States :
Before China’s emergence in E-Commerce, USA was leading the global market. Today, USA comes in second thanks to the help of giant marketplaces like Amazon and eBay. $340 billion worth of sales have been generated in the country, representing 7.5% share of total retail sales.
United Kingdom :
UK is smaller than the leaders, which means that the country’s customers are fond of online shopping. This shopping is mostly done on Amazon’s regional website : Amazon.co.uk. Top leader on the market, the giant is followed by Argos and Play.com, which is now a part of Rakuten. With $99 billion and 14.5% share of total retail sales, United Kingdom is at the third place of the top 10 E-Commerce markets. Thus, the country has a lot to offer for E-tailers looking to expand their cross-border strategy and create a real empire across the world.
Japanese customers are fond of mobile shopping. Indeed, Japan is leading the M-Commerce market in the world. French digital commerce Rakuten is the leader E-Commerce platform in the country. Thanks to its popularity, the country’s annual online sales represent $79 billion, being 5.4% total retail sales.
Germany is the second European country present in this rank of the top 10 E-Commerce markets in the world. Just as UK and the rest of Europe, Amazon represents a big part of the local total sales done digitally. It can be explained by the fact that Amazon also chose to open a regional website for the country. eBay and Otto are some of the other major online selling websites in the area. These three marketplaces’ success lead the country into generating $73 billion thanks to E-Commerce in 2017, representing 8.4% of the total retail sales.
The top 10 countries :
Coming at the sixth place in the top 10, France is the third European country present in this rank. This good place is due to French consumers’ digital habits. Indeed, French people are fond of online shopping, thanks to local players like Odigeo’s eDreams and CDiscount, which are directly competing with Amazon.fr (another regional website). 5.1% of the total sales done in the country are generated online, representing $43 billion.
South Korea :
The country is the third Asian country in this ranking. South Koreans’ online consuming habits can easily be explained by the local equipment. Indeed, the country has the fastest wireless internet speed in the world. Just as Japan, the country’s consumers are fond of M-Commerce, specially done on local marketplaces GMarket and Coupang. This lead the country to generating $37 billion in E-Commerce, representing 9.8% of total sales.
Canada represents a giant E-Commerce market. Fortunately for local players like Costco, there is very few competition. The country’s leader is, once again, Amazon. More and more E-Commerce players are currently trying to insert themselves on this market. It is justified, since 5.7% of total sales done yearly are done on the internet, representing $30 billion.
Despite the country’s side, Russia comes at the end of this list of the top 10 E-Commerce markets in the world. But, the country has the largest population of internet users on the European continent. This doesn’t mean that the country’s customers’ habits include online shopping. E-Commerce share of total retail sales are only 2%, representing $20 billion in 2017. The market’s leaders are Ulmart, Citilink and Ozon.
We have talked a lot about Brazil on this blog. Indeed, the country represents a big opportunity for E-retailers. North American E-Commerce actors are trying to take a slice of this market because of its big opportunities. Local competition is lead by MercadoLibre and B2W Digital Inc. Last year, $19 billion were done online.
Customers’ E-Commerce habits
Each market has its own features. Indeed, local shoppers don’t consume the same way from a country to another. Habits differ between payment methods or used devices, for example.
Payment solutions :
As mentioned before, consumers don’t shop the same way. Of course, means of payment are included. If you want to expand your digital business to these top 10 E-Commerce markets, you need to fit local buyers’ needs and habits. The lack of some means of payment on certain markets holds some customers back. This is something you have to avoid in order to decrease your cart abandonment rates and increase your customer loyalty.
Payment solutions in the South-East Asian market :
For example, Asian customers use a lot of digital wallets. This is due to local actors’ expansion. Indeed, Alibaba and WeChat have launched their digital wallet services. The best way to install on the market is by opting for a local marketplace. This can be done on Alibaba’s subsidiaries, which allow you to reach a lot of people.
Other digital wallets are available in Japan and South Korea. More specifically, South Korean customers like the use of debit cards and money transfers done on alternative payment methods. Japanese customers also use a lot of credit / debit cards, more specifically Visa, MasterCard and JCB. This is why the country is in the top 10 E-Commerce markets.
Payment solutions in the North-American market :
United States’ buyers like to use their cards. Whether it is a debit or credit card, most of the transactions are done directly by this mean of payment. PayPal comes after the use of cards. Both solutions’ easy integration allow you to reach the majority of online consumers on the US market.
Canadian online shoppers use a lot of credit cards, especially from MasterCard. Some of these consumers also like to use alternative payment methods like PayPal, once again, or prepaid cards and vouchers. This shows that Canadian like want to feel safe when paying online.
Payment solutions in the European market :
Just as in the United States, United Kingdom online buyers like to use their debit card on the internet. This doesn’t mean that they don’t like alternative payment methods. Indeed, alternative methods like PayPal have always been popular. Apple Pay and Google Wallet are also starting to trend. Payment methods used on the French market are the same. These methods allow France to rank in the top 10 E-Commerce markets.
In Germany, local credit cards are mostly used. Once again, Visa and MasterCard are leading the means of payments’ market. PayPal and Giropay are the online payment methods’ market. Just as in a lot of other countries, some customers like to use prepaid cards and vouchers in order to feel safe when ordering online.
In Russia, people like to use their cards in big cities. Instead of paying when ordering, the region’s customers prefer to pay at the package’s reception. This means that a lot of payments are done by cash. This is why credit cards are mostly used in big cities.
Payment Solutions in the South-American market :
Finally, in Brazil, customers like to pay their online purchases with three main means of payment :
- Credit cards ;
- Bank transfers ;
- Cash vouchers.
International and local credit cards are both majorly used by Brazilian customers, with bank transfers. Bank transfers allow them to be redirected to their bank’s online platform.
Used devices :
Most countries’ customers use laptop to order. But some markets are switching to ordering online on mobile devices. This is why the industry is going from an E-Commerce domination to a M-Commerce and E-Commerce mid share. Of course, online sellers have to adapt their offer to their market’s customer base. Take a look at the most preferred devices in the top 10 E-Commerce markets you could target in your cross-border strategy.
Most used devices in the South-East Asian market :
Reports tell us that, right now, there are 900 million internet users in China. Due to different offers from the industry leaders on this particular market, Chinese customers prefer using mobile devices to execute their online shopping. These leaders are WeChat Pay and AliPay, which allow consumers to pay with their mobile, offering a quick and easy shopping experience. This seamless way of doing help the M-Commerce to be a major way of ordering online. Mobile orders went from representing 9% of global orders in 2013, to 65% in 2015.
In 2013, Japanese customers didn’t use their mobiles a lot to order online. This trend changed with the easy integration of payment solutions on mobile devices, and the adaptation of global E-Commerce actors in the country. In 2016, mobile orders represented 32% of global orders, while they are predicted to represent 61% in 2020. So, if you are going to target 4th country in the top 10 E-Commerce markets, you’ll need to adapt your strategy and prioritize global, while being present on laptops.
South Koreans are different from Chinese and Japanese customers. M-Commerce is currently growing in the country, but not as much in the other South-East Asian markets. The M-Commerce market has known a 122% growth between 2013 and 2017. Today, it represents approximately 26% of total orders in the country.
Most used devices in the North-American market :
In the United States, M-Commerce represented USD 156 billion. This revenue is spread between 147,3 millions mobile buyers. M-Commerce sales represent 34.5% of the total sales executed in the country, in 2017. Mobile devices are getting more and more popular in the USA.
Canadian buyers are one of the most connected consumers in the world. Internet penetration rate represents 87%. Mobile devices are not widely used by Canadians. Indeed, a Paypal and Ipsos report showed that 15% of online buyers have used a tablet to do online shopping, and 12% of online buyers have used their mobile. Plus, they prefer browsing their favorite websites on their official apps, instead of their mobile web browser.
Most used devices in the European market :
M-Commerce isn’t as developed in the United Kingdom as it is in the rest of the world. Indeed, it only represents 8.4% of the total retail sales done in the country in 2017, while E-Commerce represented 38.6%. Thus, English customers tend to prefer laptop browsing and shopping, justifying the market’s rank in the top 10 E-Commerce markets.
German customers like shopping on their mobile devices, like their tablets and phones. In 2017, mobile sales represented 36.8%. This number has been growing as time flies by.
French customers are similar to German customers. Indeed, mobile sales represented above 20% of the total online sales executed in 2017. With E-Commerce booming in the country, we can only see this number grow more and more each year. In Russia, mobile penetration has been boosted by the technological neutrality. This allows new players to do their entrance on this market. Now, 80.3% of Russian online customers browse the internet on their mobile devices. Similarly to the other countries in the region, 20% of the retail sales have been done on mobile, meaning that the country deserves its place in the top 10 E-Commerce markets.
Most used devices in the South-American market :
Brazilian customers are fond of mobile internet browsing. Indeed, 94.6% of Brazilians enjoy their mobile devices for their ability to connect on the internet, whether they are at home or not. The country has a share of 45% E-Commerce buyers, and 26% of M-Commerce buyers, leading us to think that the market is a great place to apply your digital strategies.
Don’t hesitate to target these countries
Whether these markets are highly competitive or not, you should consider shipping your products there, and creating regional websites. Markets like Canada love browsing online shopping websites if they are regional. The same rule applies in the South-East Asian markets. Each market present in the top 10 E-Commerce markets really different.
Applying a cross-border strategy can be scary, but you have multiple opportunities in front of you in these countries, so why not? What are you waiting for?
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