globalEDGE Blog - By Tag: e-commerce

Since we last took a glance at cryptocurrency and its impact on the global economy, the digital currency market has undergone some major expansion.

In today's digitized world, everything is shifting to incorporate technology, especially the retail industry. Customer preferences are changing, and companies have to quickly adjust their strategies and style in order to stay competitive. For example, online retail has been in the spotlight for the last decade. It is convenient for both the customer and the retailer; however, how does it affect the manufacturer's and retailer's supply chains?

A whirlwind news topic that seems to reveal new headlines and developments each day, technology is changing society more than ever before.  As companies and consumers key in on how technology has the potential to positively and negatively impact their futures, research, testing, and product roll-outs are being conducted around the clock to create new innovations and introduce them to a global market hungry for personalization and advancement.  This blog will aim to shed light on how technology will impact three key economic industries: transportation, 3D printing, and online consumption.

Whether you’re opening a new business, investing in stocks, or trying to keep up with the increasingly advanced and interconnected sectors; we have gathered information on five of the fastest growing industries.

E-commerce sales have been growing over the past decade at a rapid rate and the online retail economy is booming. According to the US Census Bureau, 9.6% of all retail sales were from e-commerce sales during the second quarter of 2018. This percentage was only 4.4% in the second quarter of 2010. This post will discuss the reasons behind the shift from brick-and-mortar businesses to online retail stores.

Popularized by recent ride- and accommodation-sharing platforms, the sharing economy has experienced significant growth and demonstrated its potential for international scalability. The implications of this new economy are predicted to disrupt a variety of business models and industries, ultimately challenging the way we define consumption. Topics to consider include factors driving growth, potential industry risks, and future trends set to affect the way consumers capture value.

International e-commerce are commercial transactions that happen over the internet which involve people or businesses located in different countries.  In the modern world, many consumers now shop online and there are a plethora of opportunities available to market to a potential online international customer.   

Although overall retail spending has continued to grow, factors such as e-commerce and an abundance of shopping malls are changing the way people shop.  Today, e-commerce sales are steadily increasing, with Amazon sales rising from $16 billion to $80 billion between 2010 and 2016, and nearly half of all United States households are now Amazon Prime subscribers.  Also, according to Cowen and Company’s research analysts, between 1970 and 2015 the number of shopping malls in the United States grew more than twice as fast as the population.

E-commerce is a major component of almost every business that sells goods in the modern world, some even call e-commerce the key to a successful business.  E-commerce is defined as transacting or facilitating business over the internet. With the internet growing exponentially over the last two decades many people now look to it for a more convenient avenue to shop and do business over.  People can now do everything from paying their bills online to buying groceries and getting them delivered to their home.  With the tremendous growth in the potential for e-commerce, many companies have taken advantage of the increased opportunities for revenue. 

The U.S. retail industry has been experiencing a changing landscape in recent years due to the closing of numerous big-name, brick-and-mortar stores throughout the country. Major apparel retailers such as Sears, Kmart, Macy’s, and J.C. Penney announced the closures of several stores this year while BCBG Max Azria, American Apparel, Payless Inc., and Gymboree have all filed for bankruptcy. Earlier, this month, a Credit Suisse report predicted that 20 to 25% of U.S. shopping malls will close down in the next five years, and 8,640 stores will close by the end of the year.

As the world is becoming more connected, the courier, express & parcel (CEP) industry is growing and evolving. Online shopping has induced this growth significantly, with companies such as Amazon and Alibaba playing a major role. The ease with which a consumer can find items online from a variety sellers with many delivery options and often reviews and ratings, has shifted the purchasing power significantly to the hands of consumers. This forces retailers to offer better service and cheaper delivery. This, in turn, has created a lot of issues for CEP companies and has forced them to rethink their strategies, as costs have been rising faster than revenues. Also, emails and social media have almost completely replaced the use of mail delivery, which required postal companies to shift their main focus to parcel delivery products, services, and supply chains that would create better revenue streams.

In today’s blog, we will take a look at the logistics industry and how it deals with the incredible challenges of delivering packages to customers around the world. With the holiday season in full swing and as frantic shoppers look to purchase last minute gifts before Christmas, the shipping industry is forced to work 24/7 to meet demand. The holidays can make or break the year for many retailers and ecommerce websites, and these businesses depend on shipping companies to ensure their customers are satisfied.

Traditional grocery shopping will be changing in a big way starting in 2017. Amazon has ventured away from their online domain to shake up the in-person shopping industry. On Monday, Amazon released a video showing off their newest project: Amazon Go. This store has eliminated checkouts, cash registers, and most importantly, lines. What better way to propel an industry into the future than fresh competition.

Two of the world's most valuable technology companies, Facebook and Alphabet (by means of its subsidiary Google), are working with TE Subsea Communications (TE SubCom) and Pacific Light Data Communication (PLDC, a subsidiary of China Soft Power Technology) to construct the world's fastest trans-Pacific submarine cable. The 12,800 kilometer (8,000 miles) submarine cable will enable a speed of 120 Terabits per second and connect the United States and China by way of two major cities: Los Angeles and Hong Kong (where PLDC is based). The cable, known as the Pacific Light Cable Network (PLCN), will utilize fiber-optic technology to create the fastest possible telecommunication channel, covering twice the speed of the current-fastest undersea cable. The goal of the PLCN is to increase bandwidth and reduce connection delays in the Asia-Pacific region. According to Google, the cable should be built and functioning by 2018.

E-commerce has become more and more popular, but some warehouses cannot keep up with the consumer expectation of instant gratification. Online shopping gives consumers the idea that if something is purchased over the internet, it should be delivered quickly and efficiently. Many facilities are still using the man-to-goods model, where the employee goes throughout the warehouse looking for the item(s) purchased by the consumer. Companies like inVia Robotics are changing that.

As the popularity of online shopping grows in India, China, Japan, and South Korea, e-commerce companies are predicted to spend about $6 to $8 billion in investments toward logistics, infrastructure, and warehousing over the next few years. E-commerce as a whole is growing exponentially, with the retail industry being the main contributor. The need for air cargo connectivity is expected to increase as tier two and tier three cities pick up business and the supply chain becomes more complex. Specific retail companies are also working to ensure that they can account for the highest amount of revenue in terms of e-commerce.

On May 26, the price of the bitcoin began to surge, hitting a value of $467.50. Throughout the weekend, the currency continued its dramatic trajectory, spiking at $570 before settling around $530. This amounts to a sudden increase of 21% in the midst of a consistent, if low, period for the currency. While these values are far below bitcoin's one-time peak of $1,151, they are the highest prices the digital currency has reached since 2014. That same year marked a heavy blow for the bitcoin, bottoming it out at low rates that remained in force over the past year. Now, investors are indicating promise in the currency once again: Over the weekend, daily global transactions equated to $134,056,000, with over 15 million bitcoins in supply.

Warehouses are becoming increasingly more complex according to a report by Zebra Technologies, a company which sells bar code scanners and other technologies. These products allow companies to track and manage their business operations in an efficient manner. In its most simple terms, warehousing is the process of storing materials and filling orders from one end of the supply chain to the other.  In response to the growing needs of e-commerce, major changes in labor and technology will be occurring within these warehouses. According to the report, in 2015, it took 60.4 hours to train new staff to “full productivity”, up 26% from 2013. This figure just further demonstrates that companies are already adjusting their supply chains to meet demand for faster delivery by consumers.

Alibaba Group Holding Company is a Chinese e-commerce corporation that works to connect online businesses and marketplaces all over the world. The company is the largest e-commerce operation in China and has made its founder and chairman, Jack Ma, his country's richest man. Alibaba has often drawn comparisons to Amazon due to each company's respective dominance in local and global markets. A big part of Amazon's success has been due to its expansion from online retail services, and Alibaba now appears to be following a similar route. 

Earlier this year, we wrote about how the Brazilian e-commerce industry was growing rapidly despite a troubling economic state. This is due in part to the growth of an online payment system called EBANX. Partnered with local banks, this system allows Brazilians to make online purchases from international vendors. More than 60% of Brazilian citizens lack access to an international credit card, and before EBANX, this segment was unable to purchase from international e-commerce sites at all.

With the holiday season on the near horizon, it’s crunch time for people across the globe to find the best deals on presents, especially those that aren’t usually affected by seasonal sales. This past weekend and subsequent “Cyber Monday” marks the annual event of the consumer discretionary sector marking down retail goods, offering exceptional savings for a very limited time. Generally, a jolt in sales due to Black Friday is expected to be a harbinger of a relatively healthier Q4 earnings report, especially if previous periods had stagnant growth or lackluster earnings. The holiday shopping season is vital to the fiscal success of many retailers and yet historically, sales during this time of year don’t follow any particular pattern or have any distinctly profound impact on overall economic trends. But for many, Black Friday is a time of year that can make or break a company’s financial statements.

This year, economists expect that Brazil’s economy will shrink by 1% in real terms and by as much as 15% in dollars due to maxed out credit cards, rising inflation, and government increases on prices for fuel, electricity, and transportation. In the last year, consumer spending has stagnated and could even decline by 3% in 2015. However, the Brazilian e-commerce industry seems to be excelling despite all of these indicators. Price savings and the convenience of online shopping caused Brazilians to spend $30 billion online last year, which marks an increase of 9% since 2013.

Netflix Inc., an American provider of on-demand Internet media streaming, recently opened their online video streaming service to Cuba. This move made Netflix one of the pioneer American companies to expand in to Cuba, following the loosening of regulations early in 2015.

Last year on the eve of Cyber Monday, Amazon’s founder and CEO Jeff Bezos revealed the company’s plan to develop drones that would deliver packages to a customer’s doorstep. News of these drones spread quickly, and as a result Amazon broke its Cyber Monday record with a figure of about 426 items ordered per second. By utilizing the advertisement practice of embargoing, or holding the news about these drones until the ideal moment, Amazon was able to maximize its profit and increase sales just in time for the holiday shopping season.

This week’s blog series on the global e-commerce industry displayed the many benefits and trends within this rapidly growing industry. However, implementing a global e-commerce strategy can be a difficult and challenging task. These challenges can be overcome with resources right here on globalEDGE. To assist in the implementation of e-commerce on both a country-specific and global level, globalEDGE has a variety of useful tools and resources. Today we will a look at many of these resources.

With an increase in the popularity of business-to-consumer (B2C) online retail, there has been a surge of fraud in e-commerce and online payments. Fraudulent activities including personal information breaches and untrusted online payments have been deterring consumers, all over the world, from partaking in B2C e-commerce.

With an Internet penetration rate of 12.6%, investors looking to diversify their portfolio are currently appraising India’s e-commerce market for opportunities with exponential dividends. According to the technology research firm Gartner, India’s e-commerce industry is poised to grow 70% at the end of this year, with revenues crossing $6 billion. This will make it one of the fastest developing segments in Asia alone. Ranging from laptops to mobile phones to tablets, it is the pervasive use multi-platform technology for online retail that has catalyzed this boom.  Current estimates predict that within the next five years, the sector will quadruple in size to $43 billion. But how can sustainable, organic growth be cultivated in an ever-changing digital marketplace?

E-commerce has quickly become a major factor for businesses across the world, as consumers’ comfort with online shopping continues to increase. With more options, better prices, and the flexibility of shopping at home, e-commerce has opened a new avenue for companies to conduct business, with global sales expected to hit $1.5 trillion in 2014. This avenue has also allowed companies to expand their operations across the globe, tapping new, lucrative markets. With this global expansion has come several challenges that businesses have to meet, as they must tailor their marketing and operational strategies to account for differences in each diverse market.

A disgruntled employee can have catastrophic effects upon the work environment of a company. Although it may begin with one person being unmotivated to complete their daily work tasks, his or her negative energy can impact other coworkers. One employee's unproductive mannerisms can also cause management resources to be diverted away from employees who consistently work hard and accomplish all tasks. In the long-run, this behavior is helpful to neither the employee nor company, as the company accomplishes less and the employee feels unsatisfied with his or her work. However, new human resources programs are being created to combat this issue in an innovative way.

With the recent December announcement of music streaming service Spotify launching a free and ad-supported version for mobile device users, it is inevitable that the music industry will begin to see some changes in the near future. In recent years, the revenue accumulated from the purchase of physical music albums has decreased rapidly, but its competitor of digital downloads is also being impacted negatively with the rising popularity of music streaming. As a consequence of this, US digital track sales decreased for the first time ever last year.

China’s e-commerce industry is growing at an extremely rapid pace; it is expected to become the world’s largest e-commerce market by 2015. With a population of 1.3 billion, there is a vast untapped market for online sales in China. However, growing competition has lowered the margins and fuelled price wars in the region. What does the future of e-commerce look like for the growing nation?

The way we shop changes rapidly from year to year. This is due to the various technological improvements that are introduced to the market so often. From laptops, to tablets, to smart phones, and reliable networks it is extremely convenient to switch from the traditional brick and mortar stores to online shopping which has increased tremendously in the past few years. Consumers in Canada, for example, spent $15B online last year alone. Social media provides just the right push to turn users in the direction of shopping at the click of a button. Customized advertisement on Facebook based on user preferences listed in their profiles and opinions expressed on Twitter open the door for users to explore different shopping websites and possibly find items that they would not be able to find in stores otherwise. Furthermore, the internet provides a wider variety of products and comparing prices is much easier because when online, a customer can be searching multiple websites simultaneously.

Online shopping is being used in many countries around the world and its use is becoming more widespread each year. In emerging countries such as India, the e-commerce market is growing rapidly with over three thousand e-commerce centers found online. Recently, businesses in South Korea have taken online shopping to the next level by allowing people to shop in virtual supermarkets with their smartphone.

When people think of online shopping today, paying for goods or services via the internet usually comes to mind. However, in Russia this is not the case. More than 80 percent of transactions at Russian online megastores are in cash. Russian customers are not very comfortable with online transactions so businesses in Russia have developed alternatives for the online shopping model.

Just as many global businesses are beginning to feel comfortable doing business over the Internet, smartphones and tablets are opening up a whole new avenue to interact with customers.  While still relatively new, the market for mobile applications is expected to grow into a nearly $30 billion per year industry by 2015.  E-Bay’s mobile application has already been downloaded by more than 50 million people worldwide, representing 190 countries and eight languages. 

China currently exists as one of the most desired markets in the global business world. With E-Commerce on its current rise globally, the key then, is finding a way to reach China’s online customer base. As of 2009, China had roughly 384 million internet users, and that number is expected to hit 650 million in 2015. It’s safe to say that many online retailers around the globe are seeking a way to penetrate China’s market. The best way to do this is to gain a better understanding of the consumers they’re trying to sell to.

Widespread use of the Internet has led to a decline in the prevalence of traditional brick-and-mortar businesses, and this disparity will continue to shift as more people worldwide are provided with Internet access. Buying online is simply more convenient, and most of the time more affordable than traveling to a physical location and purchasing a good or service. Even more convenient, however, is the ability to conduct business and make purchases while on-the-go. With an increasing number of smartphones sprouting up all over the world, making purchases has never been easier. Mobile commerce is a trend we can expect to see entire business strategies built around.