In this article, we will look at the top 15 countries with the largest e-commerce industry. We have also discussed the global key players in the e-commerce industry in detail. If you want to skip our detailed analysis, head straight to the Top 5 Countries with the Largest E-Commerce Industry.
E-commerce has brought about a seismic shift in the world of commerce and retail. Traditional retailers have been forced to adapt or let their businesses decline, employment patterns have been disrupted, and consumer behavior has undergone a fundamental transformation. It is also true that the disruption caused by e-commerce is not a temporary phenomenon but a fundamental shift in the way we shop and conduct business.
In 2023, e-commerce sales are set to increase by 10.4% which is expected to constitute 20.8% of all retail purchases. This transition to digital commerce presents an incredible opportunity for businesses, regardless of their size, to expand their reach and sales. The global e-commerce market is poised to reach $6.3 trillion in 2023. With the power to connect with customers worldwide, businesses can tap into previously untapped markets which grants them a global presence and untold growth potential. Looking ahead to 2026, the e-commerce market is projected to reach $8.1 trillion, affirming that e-commerce is not merely a trend but a lucrative long-term strategy.
In the United States, the e-commerce market is also booming, with an expected sales figure of over $1.1 trillion in 2023. This provides a golden opportunity for businesses to target a national audience and expand their customer base. Furthermore, 16.4% of all retail purchases in the US are expected to take place online in 2023.
The fastest growing industry within the e-commerce market is food and personal care with an expected revenue increase of 64.2% from 2020 to 2025 and is likely to reach a global revenue of $791.6 billion by 2025. This sector is followed by the category of fashion which is projected to see a 54.8% revenue increase during the same period. China is a key player in fashion e-commerce as it contributes over 40% of global revenue.
Amazon.com, Inc (NASDAQ:AMZN) is the biggest e-commerce company with a 37.6% share in the US e-commerce market, with forecasted sales of $431.11 billion in 2023. Moreover, in the US grocery e-commerce space, Amazon.com, Inc (NASDAQ:AMZN)’s sales are projected to grow by 12.9% to reach $29.12 billion and hence, will make Amazon.com, Inc (NASDAQ:AMZN) the second-largest digital grocer, just behind Walmart Inc (NYSE:WMT). Since Amazon.com Inc (NASDAQ:AMZN)’s share of digital grocery sales stands at 23.8%, Walmart’s subsidiary, Sam’s Club, gives amazon.com, Inc (NASDAQ:AMZN) a tough competition, as Walmart Inc (NYSE:WMT) captures 28.9% of digital grocery sales.
On the other hand, Amazon.com, Inc (NASDAQ:AMZN)’s advertising business is another standout area as the company raked in $26.31 billion globally and $20.47 billion in the US in advertising revenues in 2021. Its advertising growth has been driven in part by the increase in online retail transactions during the pandemic. It’s performance has not been compromised even in 2023 as RiverPark Large Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was a top contributor in the second quarter, in reaction to a solid 1Q23 earnings report. The company generated $127 billion of revenue (2% ahead of expectations) and nearly $5 billion of operating income (57% better than expectations) driven by rebounding online sales and strong incremental gross margins. During the company’s earnings conference call, Amazon management pointed to easing inflationary pressures, higher productivity gains, and lower expected capital spending for the remainder of the year. The only negative in the quarter was slowing AWS revenue growth, which we believe will rebound later in the year.
With its ability to continue its market share gains in three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world. AMZN shares trade at a 10-year trough EPS multiple, despite what we believe to be currently depressed margins and earnings.”
On the other hand, JD.com, Inc (NASDAQ:JD) is the second largest e-commerce company in the world known for transforming itself into a technology and services juggernaut centered around a stable supply chain. In 2021, JD.com’s advertising revenues increased to $26.31 billion worldwide.
Their level and standard of innovation and efficiency is epitomized by JD.com, Inc (NASDAQ:JD)’s construction of the world’s first fully automated warehouse in Shanghai. Furthermore, JD.com, Inc (NASDAQ:JD) is actively developing autonomous delivery vehicles and investing heavily in research and development and has dedicated almost $12 billion to R&D.
One key factor in JD.com, Inc (NASDAQ:JD) international expansion and brand protection strategy is its use of the Madrid System for trademark registration. This system allows JD.com, Inc (NASDAQ:JD) to efficiently register its trademarks across different countries and regions with a single application that saves time and resources.
On the financial end, JD.com, Inc (NASDAQ:JD) has reported steadfast financial results for the second quarter of 2023. The company’s net revenues for the quarter reached $139.7 billion, with a notable 7.6% increase compared to the second quarter of the previous year. In fact, their net service revenues for the same period increased by 30.1% to reach $7.5 billion.
JD.com, Inc (NASDAQ:JD) also demonstrated improved profitability, with income from operations for the second quarter of 2023 standing at $1.1 billion, a huge increment from $3.8 billion in the same period of the previous year. Non-GAAP income from operations further highlighted this growth, as it reached $1.2 billion in the second quarter of 2023, compared to $5.8 billion in the second quarter of 2022.
Photo by CardMapr.nl on Unsplash
Methodology
To identify the top countries with the largest e-commerce industry, we have relied on market share data from the E-commerce database, an analytics consulting firm for e-commerce. We have ranked our list based on the expected revenue of each country’s e-commerce industry for 2023 and ranked them in ascending order of this.
15. Russia
Market Size: $35.62 billion
In the first half of 2023, e-commerce sales in Russia increased by 20% and reached $27.67 billion. Russian e-commerce market witnessed such a great increase in sales because of the domestic purchases which accounted for 97% of the total sales, while cross-border buying, especially from the EU, decreased greatly to only 2.8%. E-commerce now represents about 12.7% of all retail sales in Russia. Moreover, digital and household appliances led and generated $5.35 billion in sales and made up 19.1% of the e-commerce market.
14. Australia
Market Size: $36.82 billion
Australia’s e-commerce market is predicted to hit AUS$32.3 (US$25.6) billion by 2024, as per the International Trade Administration. A major player in the Australia e-commerce, MyDeal, plans to improve customer experiences with its SHOPAPP initiative by capitalizing on increased online shopping during hot sales periods. It is one of the best countries for e-commerce business.
13. Mexico
Market Size: $37.29 billion
The e-commerce market in Mexico is expected to witness an annual growth of over 12.3% with a projected value of $49.3 billion by 2030. The increasing internet penetration with a huge population of tech savvy youngsters , and the introduction of secure online payment methods have all collectively contributed to this growth. It is one of the top online shopping countries in the world.
12. Brazil
Market Size: $41.81 billion
In 2021, the Brazilian e-commerce saw a 16% YoY increase, and by 2025, it’s expected to grow by 95% and make $79 billion in transactions. Electronics dominate the sales with 43.1% contribution, followed by appliances and furniture at 28.2%. The key players in the e-commerce market of Brazil are Mercado Livre, Amazon.com, Inc (NASDAQ:AMZN), and Shopee, a subsidiary of Sea Ltd (NYSE:SE).
11. Indonesia
Market Size: $44.81 billion
Indonesia’s online commerce market is a market of over 30 million people. Notably, women play an role important role by contributing 35% of online retail revenue (Mckinsey), compared to 15% in offline retail. e-commerce market in Indonesia is expected to create around 26 million jobs which will constitute 20% of the total workforce. Indonesia is one of the fastest-growing countries in e-commerce.
Shopee Pte Ltd, is the most popular and most visited e-commerce website in Indonesia.
10. Italy
Market Size: $46.98 billion
The Italian population is often known for their style and fashion, which is why fashion is the biggest segment of e-commerce market in Italy with a market share of 36.2%. The market is projected to reach a value of $72.75 billion by 2027 with a CAGR of 11.6% between 2023 and 2027. Italy is one of the top countries with the largest e-commerce industry.
9. Canada
Market Size: $55.15 billion
Canada’s e-commerce market had over 27 million users in 2022 representing 75% of the population. Moreover, the number of users is expected to increase by 77.6% by 2025. Electronics, fashion, and furniture are top product categories in the market, with credit cards and PayPal being popular payment methods. Apart from Canada being one of the top countries with the biggest e-commerce industry, Canada is also one of the largest exporters in the world.
8. India
Market Size: $71.50 billion
While the e-commerce market is still dominated by major players like Amazon.com, Inc (NASDAQ:AMZN) and Flipkart Private Limited, new entrants are rapidly expanding the industry. However, India’s digital divide remains a challenge as over 50% of the population lack internet access which limits the reach of online shopping for many.
7. France
Market Size: $78.22 billion
In 2021, over 80% of French internet users which makes approximately 41.8 million people, were engaged in online shopping. The average transaction was around $73 with frequent shopping, which averaged about 50 transactions totaling approximately $3,667 per shopper. Moreover, cross-border e-commerce is on the rise, as over 35% of French online shoppers buy from foreign merchants. It is one of the countries with the largest e-commerce industry by market share.
6. South Korea
Market Size: $85.54 billion
Domestic online purchases in South Korea reached $168.5 billion in 2021, driven by high smartphone usage. Cross-border e-commerce is also growing, with $4.5 billion sales in 2021. Multi-brand retailers like Amazon.com, Inc (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY) are frequently used for foreign online shopping, with health supplements, apparel, and electronics being the top purchases. It is one of the top countries with the largest e-commerce industry.
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Disclosure: None. Top 15 Countries with the Largest E-Commerce Industry is originally published on Insider Monkey.