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
Nov 22, 2024 - Retail Activity Expands
- Economic activity in the services sector including the retail sector expanded in October 2024, according to the Services ISM Report on Business. The Services PMI registered 56% in October, up 1.1 percentage points from September, marking the fourth consecutive month of expansion. Of the 14 of the 18 services industries reporting growth in October, Retail Trade reported the fastest growth during the period. Fifteen of the 18 services industries reported an increase in prices paid during the month of October, including the Arts, Entertainment & Recreation; Retail Trade; and Wholesale Trade industries. Sales for electronic shopping and mail-order houses grew 11.4% in July 2024 compared to a year ago and were up 7.3% from the previous month, according to the Census Bureau. In addition, consumer spending levels increased nearly 3% in August 2024 compared to a year ago and were up 0.1% from the previous month, according to personal consumption expenditures data from the Bureau of Economic Analysis.
- Online is the top shopping destination for holiday purchases this year, according to a new National Retail Federation holiday shopping survey conducted by Prosper Insights and Analytics. While online is the top destination for shoppers (57%), other top shopping destinations include department stores (46%), grocery stores and supermarkets (46%), and discount stores (45%). Consumer spending per person on the winter holidays will reach a record $902 per person across gifts, food, decorations, and other seasonal items, up an additional $25 per person compared to 2023. The top items on consumer wish lists in 2024 include gift cards (53%), clothing and accessories (49%), books and other media (28%), and personal care or beauty items (25%).
- US online retail sales are projected to grow from $1.2 trillion in 2024 to $1.8 trillion in 2029, with a CAGR of 8.4%, according to a new Forrester online retail sales forecast reported in Chain Store Age. US online retail penetration is expected to reach 29% by 2029, an increase of 23% from 2024. Big retail players Amazon and Walmart are projected to continue their growth in total and online retail sales in the US, expected to account for a quarter of total retail sales and two-thirds of online retail sales by 2029. US click-and-collect sales, which include curbside pickup and “buy online and pickup in store” (BOPIS) options, became very popular during the pandemic. Click-and-collect sales are forecast to be 29% of US omnichannel retailers’ ecommerce sales by 2029. Non-durable goods categories, including clothing, have online growth potential as their aggregate online retail penetration is half that of durable goods categories, with growth of high single-digit or double-digits expected in the next five years. According to the Forrester report, online retail penetration for clothing, flowers, footwear, pets, and toys is forecast to exceed 50% by 2029.
- The 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.
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