The All-New AIM: Intelligent Forecasting + Inventory Planning

eCommerce Growth and the Transformation of the Retail Channel

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eCommerce growth will account for a significant percentage of total retail sales in the next three years and is expected to become the largest retail channel in the world. The rise of eCommerce is impacting retailers on many issues, requiring investment, strategy and planning to better take advantage of this opportunity. Businesses need to be prepared for how quickly this retail channel will become a significant portion of their sales. In order to do so, retailers need to understand how eCommerce growth will evolve by region, country and category type.

Leading market regions for eCommerce growth

The United States is a global leader in digital activity with online commerce across all digital platforms already making up a substantial share of the country’s GDP. However, China is the world’s largest market, where nearly half of their population is purchasing online. While the Asia-Pacific region already represents half of online shoppers in the world, this region continues to experience the fastest growth and continue to lead eCommerce growth in the immediate future.

Emerging markets for eCommerce growth

Emerging markets are going to be essential for continued eCommerce growth, as retailers in developed markets may soon reach saturation. India is the prominent leader in eCommerce potential, however, countries in Southeast Asia and Latin America are also emerging attractively. Within Southeast Asia, Indonesia may be a great prospect for retailers, as the government is loosening restrictions on foreign investments, and its large population is gaining spending power and greater access to the internet. Meanwhile, Latin America’s Mexico and Brazil are showing promise for expansion due to its stable economy and rising middle class.

Challenges in emerging markets for eCommerce growth

Although attractive these emerging markets may be, doing business in these regions can be difficult. In many of these emerging markets, infrastructure is underdeveloped – the population largely do not have access to banking services or similar financial organisations, low security also creates huge barriers for digital payments.

Although eCommerce may provide a lower risk, faster avenue to entry, test, and penetrate international markets, it is also important to realise and understand that regions, countries and categories are moving online at different speeds. In light of this, eCommerce growth rates are slowing in many mature markets and retailers are now looking beyond their borders to find sustainable opportunities to meet eCommerce growth targets.

As with any new business venture, to increase the likelihood of success, entry into global eCommerce will require strategy and planning. Retailers will need to tailor their digital strategies appropriately by region, country and category and specifically to their business. Expanding your business into a new market can be an exciting and rewarding endeavour. Choosing the right players to support your investment is critical to success, and can help you reduce precious time, effort and resources.

Ultimately the rewards can go beyond sales figures, opening the door to new customers and partnerships, and laying a foundation for your brand on the global landscape. The continuing eCommerce growth in global markets presents many opportunities for businesses and now is the time to act to take advantage.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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