AI and internationalisation driving growth
E-commerce is still booming, and has become the main vector of retail market sales. The incorporation of artificial intelligence (AI) and the growth of cross-border sales are giving the market a real boost, as is the growing spread of mobile Internet access in emerging countries.
The e-commerce market continues its upwards trajectory
The global e-commerce market is expected to double between 2019 and 2023 to reach 6,267 billion EUR. Sales in 2019 alone are expected to total 3,544 billion EUR (+18% a year, on average). M-commerce too continues to grow, and more than 45% of e-commerce transactions are now done on a mobile phone – a figure that is forecast to rise to 58% by 2023. Despite this rapid growth, e-commerce still accounts for only 16% of total retail sales, so there is still tremendous room to grow. The rise of Internet use in Asia-Pacific and Latin America will be key to this rate of growth over the next 10 years, with APAC likely to account for 72% of the global e-commerce market – led by China, of course, whose market share is larger than North America and Europe’s combined.
E-commerce continues to grow, especially in Asia-Pacific
Progression of regional e-commerce revenue
Duopoly threatened by the development social commerce
Amazon is the global e-commerce leader, while Alibaba ranks number one in China but continues to expand its global footprint. Although taking different sales strategies (Amazon focusing on services and Alibaba on price) the two world leaders continue to invest in innovation and in building their own ecosystem. At the same time, attracted by the market’s massive potential, social media sites are entering the e-commerce fray. Facebook launched a marketplace in 2018 that has had some degree of success, along with mechanisms on Instagram that allow consumers to explore and buy products. China’s top social messaging platform, WeChat, is interacting more and more with users and steering them towards shopping, thanks to mini-programmes. The app now has 1 million mini-programmes and more than 200 million daily users.
Amazon: global e-commerce market leader
Compared progression of Amazon and Alibaba e-commerce revenue
Will AI disrupt the e-commerce industry?
E-commerce giants are taking an aggressive approach to artificial intelligence. The advantages they are deriving from AI include new sales opportunities and improved customer service. Amazon and Alibaba use it, for instance, to provide a personalised service or deliver product recommendations. Thanks to chatbots that rely on e-commerce platforms’ integrated IA customer service becomes more transparent and more efficient, especially on special sales days. On Singles’ Days in China in 2019, Alibaba’s AliMe, AI chatbot held 300 million conversations with customers. This corresponds to 97% of the requests the platform received, or the equivalent workload of 85,000 human customer service staff members. This AI tools makes it possible to create human interaction in real time, and improve customer satisfaction.
Consumers embracing the use of e-commerce chabots
Progression of chatbot e-commerce sales revenue
Cross-border e-commerce accelerating
The sector’s giants are developing their business internationally, to increase the number of potential customers. Cross-border e-commerce is exploding, growing at almost twice the rate of domestic e-commerce. Technological innovations such as international transactions (sometimes using blockchain) and new supply chain models are facilitating the process. According to IPC’s 2018 “Cross-border E-commerce Shopper Survey,” Amazon, Alibaba, eBay and Wish account for 63% of foreign products sales, with smartphones being the device most commonly used for international shopping. China dominates the cross-border e-commerce market, thanks to Alibaba’s global expansion strategy: the company is opening logistics centres around the world to bolster its global e-commerce business and continue its international development.