Small and medium-sized enterprises (SMEs) have opportunities in e-commerce marketplaces, especially to boost their exports.
Companies such as Alibaba Group, Amazon, eBay, Shopify, Mercado Libre, Jumia, Walmart and JD.com make it easy for SMEs to run an online store.
E-commerce marketplaces are characterized by:
- Advances in the use of technology.
- Changes in distribution channels.
- Rapid adaptation to industry standards.
- Frequent introduction of new products and services.
- Adaptation to changing customer demands.
Opportunities in e-commerce markets
These platforms offer SMEs services such as payments, marketing, shipping and tools to interact with customers.
According to Trident Digital Tech Holdings, rapid urbanization worldwide is one of the key factors driving market growth.
In addition, increasing Internet penetration and the use of devices, such as smartphones, laptops, and tablets to access e-commerce portals, is also driving the growth of the global e-commerce market.
Trident Digital Tech Holdings noted that the global e-commerce market size increased from $2.38 trillion in 2017 to $5.78 trillion in 2022. This implies a compound annual growth rate of 19.1 percent.
E-commerce allows organizations to conduct business without maintaining a physical presence, thus minimizing infrastructure, communication and overhead costs.
Retail
The market is further driven by the growing preference for online shopping, especially among women, and the increasing influence of social media platforms on shopping habits.
Globally, e-commerce is growing much faster than retail, but its share of total retail is still relatively small, accounting for 13% of total retail sales globally, according to CBRE.
The size of the global e-commerce market is expected to grow at a CAGR of 8.7% between 2023 and 2027, reaching $8.82 trillion in 2027.
To note: digital commerce includes trade in all goods and services for which digital orders are placed. E-commerce, on the other hand, generally refers to goods ordered digitally.