Electronic Shopping
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 46,000 electronic shopping retailers in the US are online-only retailers, with no or limited-format physical stores. The business format ranges from the independent specialized seller with one or a few lines of products to the large conglomeration of businesses selling a broad range of products on a single e-commerce website (Amazon, Etsy). Websites that bring together third-party sellers are known as marketplaces and typically earn revenue by charging sellers a fee that is either fixed or based on a percentage of sales or a number of transactions.
Fierce Ecommerce Competition
Electronic shopping sites must find ways to stand out in an e-commerce market flooded with domestic and foreign retailers as well as dominant players like Amazon.
Delivery Race Slows
The need for speed in ecommerce delivery is easing with shoppers showing a greater willingness to wait for deliveries of household items as concerns grow over the cost of fulfillment.
Industry size & Structure
The average electronic shopping retailer operates out of a single location, employs 16 workers, and generates $25 million annually.
- The electronic shopping retailer industry consists of 46,000 companies that employ over 734,100 workers and generate $1.15 trillion annually.
- The industry is concentrated at the top and fragmented at the bottom with the top 20 firms accounting for about 53% of industry sales.
- Large companies include Amazon, eBay, Qurate, Etsy, Wayfair, and Zara. Many large companies have international operations.
Industry Forecast
Electronic Shopping Industry Growth
Recent Developments
Jul 29, 2024 - Airfreight Capacity Affected by Chinese Shopping Apps
- Growth of popular shopping apps Temu and Shein is consuming a rising share of the air cargo market out of China, raising freight rates and increasing concerns about potential capacity issues during the peak shipping season later this year, according to the Wall Street Journal. Shipping volumes from the country’s manufacturing hubs were up about 40% in June compared to a year ago, signaling growing competition for aircraft space. Rates are also increasing, with the average spot rate in late June to ship cargo out of South China to the US by air at $5.27 per kilogram, double the 2019 levels. Temu and Shein are using the air routes to ship low cost clothing and household products to consumers in Europe and North America. Tim Scharwath, chief executive of DHL Global Forwarding, said ecommerce shopping companies have expanded so quickly in the past two years that they now consume more than 30% of cargo space on routes out of Asia, per the WSJ. A provision in US statute allows foreign companies like Shein to ship goods directly to US consumers without paying tariffs if the goods are worth less than $800.
- Consumer confidence levels fell in June 2024, after an uptick in May, according to data from The Conference Board. The Conference Board’s consumer confidence index was 100.4 in June 2024 from 101.3 in May 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those under age 35 and those in the income category of over $100,000. Plans for large appliance and smart phone purchases rose on a six-month basis, while plans for car purchases stalled.
- US e-commerce sales rose 8.5% in Q1 2024 over Q1 2023, reaching $268.1 billion, according to the latest analysis of US Department of Commerce data by Digital Commerce 360. E-commerce penetration was 22.2% of total retail sales in Q1 2024 year over year, which was the all-time Q1 high since the data has been tracked going back to 2000. According to James Risley, research data manager and senior analyst at Digital Commerce 360, “Since Q1 2020, this is the fastest Q1 growth we’ve seen for e-commerce, and e-commerce growth accounted for a huge share of total retail growth for the period (52.8%). That means price-conscious shoppers are using e-commerce to find the best offers and shifting buying to online amid inflationary worries.” When compared to the previous quarter, e-commerce sales declined by 17%, which is the norm as Q4 sales were boosted by holiday sales.
- Omnichannel options remain popular with retailers, with high adoption rates of buy online, pick up in store (BOPIS) (78.3%) and in-store stock statuses (65.4%) by retail chains in the Top 1000, according to the 2024 Omnichannel Report from Digital Commerce 360. One option losing some overall traction is curbside pickup, which has fallen to 25.3% usage by the Top 1000 merchants compared to a high of 55.1% in 2021 during the pandemic. Curbside pickup remains a priority for grocery stores and office supplies merchants. Customers are adjusting their shopping habits to the new tools available. Registering as the most popular omnichannel activity, about 62% of consumers said they checked product availability at a nearby store online before making a purchase. Shoppable video on social media and streaming platforms was noted in the report as an increasingly common shopping option with implications for the largest online retailers and their retail media networks.
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