• Global Economic Dynamics Of E-Commerce

    E-Commerce has reshaped the way we shop. The smart phone led digital revolution has made a global impact and forced changes on the global economy. Smart buyers prompted the companies to evolve from physical store to online sites. Giants like Amazon, Uber, Alibaba and Indian market leaders like Flipkart, Ola and Paytm has impacted the future of commercial goods and services.

    Market research firm eMarketer, projects e-commerce sales will touch $3.5 trillion within the next five years. Consumers are projected to spend $1.672 trillion this year which is 7.3% of overall global retail sales. By 2019, online purchases are projected to grow 12.4% as more people come online around the world.


    Why Ecommerce?

    Lower search costs and prices for buyers

    Cost involved in finding a product online is near zero. This impacts competition, enabling customers to find cheaper and better products and in turn forcing sellers, to reduce prices and improve customer service. It also paves way for easy comparisons between stores. For the retailer as well the operation costs of a website are much less than a physical store as no physical facilities and minimum inventories are required for an ecommerce business. As operation costs are lower, the benefit can be directly shared with the consumers by lowering the price of the items sold. Ecommerce giants can lower the pricing as to 40% due to their low cost operation.

    Customer service

    After sales support is one main factor deciding the growth of the sector. As consumers are not able to try and test the product until delivered, a good customer service backend is a competitive business factor in ecommerce. Companies with good after sales support are widely acknowledged by people.

    Barriers to entry are reduced

    Setting up a website is fast, easy and inexpensive. Online store does not need sales force and brick and mortar stores. Neither do they require permissions from a legal authority to open a store. This creates a lot of opportunities for you to start your dream start ups hassle free and safely. However, the challenges are more as you have to compete with lot of competitors in a global scale. Hence, a good marketing strategy is required to run an ecommerce firm.

    Business happens virtually

    Use of technology for communication and sales increases the opportunities dramatically. Virtual offices can handle the business from anywhere in the world. This reduces interaction, time and money costs when goods and services are delivered.

    Differentiation and personalization

    Differentiation of products and services will make the company stand out from their competitors. When two companies offer same product at a similar price, the company offering personalised services may be preferred. Services like bargaining with the seller ( or communication with book authors ( makes the service stands out from others.

    This also includes personalised services like premium member advantages and delivery options.

    Global Trends and Emerging Markets

    Top 10 global ecommerce markets are China, US, UK, Japan, Germany, France, South Korea, Canada, Russia and Brazil. The Chinese market is the biggest with sales growing over 15 times since 2005. The next year is set to grow even further. Factors of population, infrastructure and internet penetration are the main key deciders for the top slot.

    The biggest emerging market is India, with a population of 1.2 billion and a moderate internet penetration, India is looking forward for the giant leap in the coming years. Global giants like Facebook and Google are already in process of digitizing rural India.

    With the infrastructure being developed and with competitive sales plans, ecommerce is the next big thing to happen after the industrial revolution in the late 18th century.

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