Industry overview-

The global e-commerce market size was valued at USD 9.09 trillion in 2019 and is
expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020
to 2027. Increasing penetration of the internet is bolstering the Smartphone-using
population across the world. Digital content, travel and leisure, financial services,
and e-tailing among others constitute a variety of e-commerce options available
to the internet accessing customer base that is gaining momentum with increased
internet usage. Hence, technological awareness among customers is expected to
have a positive impact on market growth. The growing importance of faster
browsing has led to the development of connectivity, thus leading to the
development of 4G and 5G technology.

Implementation of 4G and 5G technology for connectivity purpose is expected to

have a positive impact on the market growth as it provides an uninterrupted,
seamless experience to the user. Moreover, the adoption of Smartphone is
gaining momentum at a significant rate, thus increasing the exposure of online
shopping for the customer. Therefore, the growing use of Smartphone is
projected to propel the market growth over the forecast period.
Increasing number of small and medium enterprises is also projected to escalate
the demand over the forecast period. Small and medium businesses are growing
at a significant rate, especially in India, South Africa, and Russia. Initiatives such as
Make in India and Start-up India have led to an increased number of start-ups in
the country, which adopt the online marketplace for business, thus powering the
market growth. Moreover, increasing consumer wealth is estimated to propel the
market growth over the forecast period. Established organizations and large
enterprises are leaning towards online business due to lesser expenditure in
communication and infrastructure. E-commerce offers the organization an easier
reach for the customers, and hence necessary exposure to business is also
achieved. E-commerce is also driven owing to the increasing importance of online
marketing tools, such as Google ads and Facebook ads. Nowadays, the marketing
options are in abundance due to the popularity of social media applications,
which, in turn, helps in driving the market for e-commerce towards growth
trajectories.
Furthermore, due to the on-going COVID-19 pandemic, customers’ inclination
towards online shopping is rising since brick and mortar shops are closed. Major
economies such as U.S., China, India, and Italy are severely affected due to
pandemic. Hence, the evident impact on the market is projected in regions such
as Europe and North America. For instance, as per the data provided by Emarsys
and Good Data, revenue earned is up by 37% and orders are up by 54% since
January in U.S. However, the lack of implementation of technical infrastructure in
the rural areas of countries, such as India, China, and Brazil, is expected to cause
hindrance to the market growth.
Model type insight-
In terms of revenue, Business to Business (B2B) dominated the market for e-
commerce with a share of 63.1% in 2019 and is expected to witness the fastest
growth from 2020 to 2027. This is attributed to the growing inclination of the
companies towards online selling and buying goods and services. Furthermore,
increasing penetration of smart phones, coupled with internet usage, is
anticipated to drive the B2B e-commerce segment over the forecast period.
The business to business e-commerce comprises the buying and selling of goods
and services between business corporations. Moreover, B2B E-
Commerce platforms offer companies with new possibilities for buying and selling
the products, thus reducing the operational as well as inventory costs. This is
anticipated to bolster the segment growth over the forecast period. Rise of
specialized or vertical marketplaces in B2B e-commerce is generating avenues for
the market. The vertical marketplaces offer a wide range of products in a product
category. Similarly, specialized marketplaces provide value-added services, such
as quantity discounts, and multiple payment options.
Inclination of companies towards selling and buying goods and services through
the B2B e-commerce platform can be clearly observed worldwide. Businesses
preferring B2B e-commerce platforms follow either the marketplace model or
direct model to conduct their business. The marketplace model involves
companies selling their products on a common platform alongside their
competitors, while the direct model involves companies setting up their private
B2B platforms and selling directly to the buyers.

The market is fragmented and is expected to face extreme competition in the

coming years. Many players are implementing various strategies to sustain their
presence in the market for e-commerce. For instance, in September 2018, Flipkart
completed its acquisition of Upstream Commerce, an analytics start-up based in
Israel. This acquisition is expected to benefit Flipkart Pvt. Ltd. to price and position
its products in an economical way. Business expansion through strategic
partnerships, mergers, and acquisitions remains the premiere strategy of players
operating in the e-commerce industry. For instance, in September 2019, Alibaba
Group Holding Limited announced the acquisition of NetEase, Inc., a company
offering online e-commerce services. This acquisition enabled Alibaba Group
Holding Limited to acquire Net Ease’s import e-commerce platform known as
Koala and also gain a competitive edge in the e-commerce industry. Some of the
prominent players in the global e-commerce market are:
 Amazon.com, Inc.
 JD.com, Inc.
 Apple, Inc.
 Alibaba Group Holding Limited
 Flipkart Private Limited
 Wal-Mart, Inc.
 EBay, Inc.
 Best Buy.
 The Home Depot.
Issues and challenges of e-commerce industry-

 New technologies, like augmented reality and IOT (Internet of Things)

commerce, have created even more challenges and considerations for e-
commerce businesses.
 E-commerce conversion margins are slim, so driving relevant traffic to your
site is crucial.
 The e-commerce explosion means competition is fierce, fulfilling orders can
be overwhelming, and your return policy is critical.

The e-commerce industry has grown exponentially, with total e-commerce sales
expected to reach $1.065 trillion by 2023. As an e-commerce owner, you have
unique challenges compared to brick-and-mortar shop owners. E-commerce
businesses have unique rules and regulations to follow, and cyber security is a top
priority to ensure all data stored online is protected.

6. visibility-

How are you supposed to get quality traffic to your site and turn visitors into
customers if people can’t find your site? It’s a significant issue for e-commerce
businesses and one that could make or break a business. “If the company doesn’t
show up on the first page of Google’s search results for relevant keywords, then
it’s unlikely that prospective customers will find them,” said Michael Anderson,
marketing and SEO specialist at GeoJango Maps. “The best way to overcome this
challenge is to invest in SEO. E-commerce companies should conduct keyword
research, implement on-page SEO best practices, and work on building high-
authority links to their website.” Anderson said if all of the above is done
correctly, it will lead to higher search visibility and optimized lead generation.

What are the top e-commerce challenges?

1. Cyber-security-
Victor Congionti, chief information officer and co-founder of Proven Data,
knows that small e-commerce sites need the proper cyber security
practices and tools in place. “Small businesses that focus their attention in
the e-commerce space need policies and procedures to create a solid cyber
security framework for the organization,” Congionti said. “In the case of a
cyber attack, a small business cannot afford to have downtime in
operations and sales, because every transaction is a marginal financial
success that the business depends on.” Because a small business depends
on that income, Congionti said business owners need the proper cyber
security framework to keep data safe and secure while helping employees
feel empowered to implement policies and tech to combat cyber attacks.

2. Competition-

Competition comes in many forms for small businesses, especially in the e-

commerce space. You have to keep up with competitive pricing, products
and services – all competing for your target customer.

“As a small business, you can overcome price competition by having a very
clear company value proposition that consumers can’t get elsewhere,” said
Calloway Cook, founder of Illuminate Labs.

The e-commerce space has become so saturated that standing out from
other e-commerce businesses is challenging, through no fault of your own.
 “Distinguishing yourself from your competitors is crucial to standing out
and attracting new customers for your business,” said Harsha

Reddy, co-founder of Small Biz Genius. “This can be accomplished by

making sure your website looks professional and is optimized correctly to
suit today’s Google algorithm. Also, by providing a unique product or
service, you can focus on a smaller demographic, making it easier for you to
increase your domain authority.”

3. Order fulfillment-

Not everything has to fall on the small business owner’s back. You
could be inundated with more orders than you are prepared to handle
on your own. In this case, outsourcing order fulfillment and e-
commerce shipping can ease your workload and streamline the
customer experience. “Order fulfillment should be outsourced to a
third-party fulfillment company whenever possible for increased
efficiency,”

4. Customer experience-

As a primarily e-commerce business or a business that conducts

some selling online, you might find it a challenge to offer your
customers the same experience level they would get in a brick-and-
mortar store. “One of the most overlooked areas of the customer
experience in moving to e-commerce is pricing and customer
segmentation,” said George Dunham, CEO of epaCUBE. “Customer
experience is especially important when launching an e-commerce
initiative, because customers expect to be treated as well or better
online as they are face to face.” Dunham said that companies
struggle to meet these new demands because doing so requires
precise handling of pricing, analytics and customer segmentation.
Successful experiences in the e-commerce space require the same, if
not greater, clarity in product offerings, pricing, loyalty programs and
more, as is required in a face-to-face buying process.

5. Quality website traffic and visitor conversion-

Building, designing, and running an e-commerce website is complex,

but generating quality conversions is even more challenging,
 according to Lisa Chu, owner of Black N Blanco. “To turn your traffic
into converting customers, you must have a website that is modern,
clean, user-friendly, trustworthy and virus-free,” Chu said. “Every
industry is different, so understanding your audience is crucial to
designing a website that resonates with your audience.”Designing
an effective business website is just the beginning, though.
Maximizing the content on your website through SEO is the next –
and perhaps most important – step. Phillip McCluskey, commercial
director of One Earth, said that average conversion rates globally are
less than 3%, making driving relevant traffic to your site a sticking
point.
6. Visibility-

How are you supposed to get quality traffic to your site and turn
visitors into customers if people can’t find your site? It’s a significant
issue for e-commerce businesses and one that could make or break
a business. “If the company doesn’t show up on the first page of
Google’s search results for relevant keywords, then it’s unlikely that
prospective customers will find them,” said Michael Anderson,
marketing and SEO specialist at GeoJango Maps.

“The best way to overcome this challenge is to invest in SEO. E-

commerce companies should conduct keyword research, implement
on-page SEO best practices, and work on building high-authority links
to their website.” Anderson said if all of the above is done correctly, it
will lead to higher search visibility and optimized lead generation.

7. Return and refund policies-

A good return and refund policy could be the difference between

success and failure. That sounds extreme, but it’s true. “If you want
your brand to stand tall, then customer satisfaction should be the first
priority, and whatever you’re selling should be the same as what’s
advertised,” said Syed Ali Hasan, digital marketing manager at Film
Jackets. In an ideal world, yes, there would never be an issue with
the product you’re selling, but that’s not always the case. Sometimes
the purchaser has buyer’s remorse, or it wasn’t what they thought it
would be. “Be transparent and create a smooth, fast and easy return
policy,” Hasan said. “Make it easy to understand and not too strict, so
the customer won’t have to go through hassles [to return an
 item].” Rub right said that if you don’t have a good return and refund
policy, people are less likely to trust you’re selling something worth
the money. “When a site says ‘no returns or refunds,’ it makes the
customer much more likely to think it’s a risky purchase or, worse, a
scam, since online businesses can be less known.”

8. Finding the right market-

“The first step of any business is to find product-market fit, and e-

commerce is no different,” Rubright said. “Product-market fit is the
degree to which a product satisfies market demand. The easiest way to
find that fit quickly is to build a product that solves a problem you
have.” However, finding the right market for your product isn’t the
easiest task. Rubright offered some insights on how to make it more
straightforward.“If you haven’t figured out your ideal customer yet, I
recommend making some assumptions as to what your target market is
and running Facebook ads to this audience. When you finally do make a
sale, try and understand everything you can about who bought your
product, and find more of those people by any means necessary. Once
you have product-market fit figured out, then you can figure out the best
way to reach your ideal customers.”

 Emerging technologies of the E-commerce industry-

 There are two sides to the emerging technology trends in e-

commerce; one that is driven by the marketing insight and
consumer needs and another which we develop with innovative
applications of new technological advancements taken from other
domains. Both have proved to be equally important in the
advancements of e-commerce. Below are some of the trending
technologies that are already making waves or will take
prominence in the coming time.
 Integrated E-commerce CRMs, not only helps join all the dots on
everything around consumer and relationship managements facet,
but also gives one central depositary of data and data-driven useful
inferences to be used for marketing, targeting, inventory
 management, order fulfillment, dispatch, grievances’ addressing &
management purposes.
 Gamification to boost sales is catching up fast. It not only makes
shopping more fun, motivating, interactive, it also makes it a lot
more gratifying. This is one of the more recently developed
effective ways to keep the customers coming back to your e-
commerce app.
 Contextual and Programmatic Advertising uses data-sets to
decide the type of content, target audience, timing of advertising
and re-targeting, to lure more and more people to generate higher
ROI. It’s so promising that social media brands are already
revamping their designs to cater to this need
 Augmented Reality for Product Visualization is one of the niche
trends that will be the future of e-commerce. You would be able to
shop virtually by ‘experiencing’ the product with help of AR, VR,
and MR. iOS, Android, and Google have their handsets that
support this, and the adoption of AR/VR-enabled smart devices will
increase sharply, in the coming time.
 No codes are catching up fast as many mid-level and smaller
brands can’t afford custom developed e-commerce platforms which
is expensive and difficult to develop and maintain. It is easy,
friendly, and affordable, all that an SME and Start-up want.

 Multi-Cloud hosting gained momentum during the pandemic.

This futuristic cloud approach improves the benefit of cloud hosting
while aligning various business aspects like security,
interoperability, data access, and IT operations. In absence of
robust and swift hosting, Amazon would lose $220,318.80 per
minute of downtime while Costco.com would lose $11,082.00
 A social payment is another technological trend that is making e-
commerce businesses improve their ROIs, tremendously. This
works like a digital bank account where a social media user can
 either buy products on the platforms or from the online retailers that
offer such payment methods. It is in its early stage, but brands like
PayPal, Apple pay, Google wallet, Facebook payments, Twitter
Buy, etc are working on it and are sure to fill the gap more
fruitfully.
 Headless and API-driven e-commerce allows continued
innovation to e-commerce platforms, to be completely decoupled
from the frontend presentation layer. Because of the flexibility on
the backend, as well as the increased SEO, content marketing, and
digital experience capabilities, more e-commerce organizations are
using headless.

 Shopping through Voice, personalized Chat-bots, Cameras,

barcodes, and images are going to gain a newfound customer
base, especially because they cross the language barrier and
complications arising due to that.
Technology will keep evolving enabling newer and perhaps better
trends as long as we, as consumers, keep asking for more and
more from the e-commerce brands, platforms, and marketplaces.
Keep watching this space for more trends to watch out for in the
near future.

 Application of the emerging technologies in the E-commerce

industry-

Artificial intelligence and big data

Artificial intelligence (AI) and big data are used by all large ecommerce players like
Amazon, eBay, and Alibaba. These companies use large amounts of data about
individual users to suggest products that will be relevant to them, increasing
conversion rates like crazy. AI has been among technology trends in ecommerce
for several years now, and it’s only evolving.

It’s hard to imagine a modern middle to large size ecommerce business that
operates without big data. Also, you don’t need to create overly complex
algorithms to bring benefits to your business. There are lots of ready third-party
solutions you can integrate into your shopping app or website to start getting
information about your customers.

AI can also help you to predict demand so you can manage your supply chain
efficiently. AI and big data are rather costly investments, but they can bring lots of
benefits to your business.

Social media marketing

If you cater to Millennial and younger generations, you can’t ignore the power of
social media. In 2020, 44% of Generation Z consumers say that social media leads
them to purchase certain products. Among Gen Z consumers, 37% increased their
social media usage to decide what products to buy.

Social media is extremely important for both small and large ecommerce brands.
Integrating social media is a baseline requirement for modern ecommerce
solutions, but it’s not enough.

For example, AliExpress combines gamification with social media

marketing, exchanging online reviews and ratings for bonuses. There
are already thousands of AliExpress brand ambassadors that
recommend shops and products to thousands of their subscribers.

Suggestion and conclusion for the e-commerce industry-

Overall, the ecommerce industry is in a strong position, but definitely facing
some downsides. Its Strengths include accessibility and low prices —
which allow consumers to shop wherever and whenever, at cheaper prices
than usual. The main Weakness of online shopping is that it doesn’t lend
itself so well to some industries (such as apparel), since consumers can’t
buy before they try.

Looking to the future thanks to the SWOT analysis of online shopping,

Opportunities for ecommerce include a growing digital market and the
power of internet influencers. However, a multitude of Threats — including
competition, fraud, data concerns, and the potential for monopolies — will
need to be monitored. Doing so will likely require government
regulation, clever business practices, and close attention to detail.