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Major e-Commerce companies such as Amazon are growing rapidly. But can manufacturers
and retail companies survive against them? Let's think about the winning scenario of the
makers and retailers based on the opinions of experts and the trends of start-up companies
In 2017, global e-Commerce sales were USD 2.3 retailers. Recently we are hearing trends like
trillion accounting for 10.2% of all retail sales. e-Commerce enablers, retail 4.0, image/video driven
This figure is expected to reach 17.5 % in 2021. interactive e-Commerce, voice based e-Commerce,
The worldwide e-Commerce share of top 4 leading personal stylist driven e-Commerce, mobile retail
e-retailers, based on GMV(Gross Merchandise shop, e-Commerce on ecosystems like WeChat,
Value), is 55%. Due to the dominance of e-tailers, GO-JEK, brand shop in retail etc. Out of all
around 8,950 traditional retail stores got closed those trends, we have picked up 3 trends namely
in USA in 2017 and are projected to increase e-Commerce enablers, retail 4.0 and image/video
drastically in 2018. So in a retail world dominated driven interactive e-Commerce and explain how
by the fast growing e-tailers, how do traditional traditional retailers and brands can differentiate
retailers survive? In this article, we discuss some from e-tailers and survive the e-tailers tsunami.
future survival scenarios for brands and traditional
6 BayCurrent Consulting
Chart
Worldwide e-Commerce share of retail sales 2015-2021 1
▎E-commerce share of total global retail sales from 2015 to 2021 ▎Global e-Commerce market share of leading e-retailers 2017
% 17.5 Based GMV
18 15.5 %
13.7
14 11.9 Taobao.com 17
10.2
10 7.4
8.6 Amazon 15
6
Tmall.com 14
2
JD.com 9
0
Total Share 55
2015 2016 2017 2018* 2019* 2020* 2021*
Source : Statista *Forecast
▎Value of the global sharing economy 2014-2025 ▎Internet of Things - number of connected devices ▎Connected cars global market size 2015-2021
worldwide 2015-2025
USD billion Billion USD billion
75.44
335 +70% 140.88
62.12
+2,133% +390% 121.67
51.11 100.56
42.62 83.1
35.82 68.68
30.73
26.66 49.61 56.76
20.35 23.14
15.41 17.68
15
2014 2025* 2015 2016 2017 2018* 2019* 2020* 2021* 2022* 2023* 2024* 2025* 2015 2016 2017 2018* 2019* 2020* 2021*
▎Amazon: total active customer accounts ▎Alibaba: cumulative active online buyers
552 576
Million persons;Global;1st quarter 2016 304 310 Million persons 515
278 285 294 454 466
488
250 260 270 423 434 439 443
237 244 407
209 215 224 367 386
334 350
307
279
231 255
185 202
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ’13 ’13 ’13 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’15 ’16 ’16 ’16 ’16 ’17 ’17 ’17 ’17 ’18 ’18
’13 ’13 ’13 ’13 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’15* ’16
Source : Statista
house.
▎Retail e-Commerce sales CAGR in selected markets 2018-2022
Issue 3: New market entry complexity ▎Southeast Asia e-Commerce market volume 2015-2025, by country
5.5 +1,496%
In the below figure, the Chart 5 shows the Total
87.8
+2,606%
fastest growing e-Commerce markets are Indonesia
1.7
46.0
in developing countries especially in South 1.0 +440%
Singapore
5.4
East Asia. It will be challenging for brands
1.0 +720%
to enter those markets by themselves due to Myanmar
8.2
barriers like language, local preferences etc. Thailand
0.9 +1,133%
11.1 USD billion
0.5 +1,840%
Philippines
The solution to the above problems is working 9.7 Aetual
Forecast
0.4 +1,775%
with e-Commerce enablers. e-Commerce enablers Vienam
7.5 Source : Statista
8 BayCurrent Consulting
we bring such customers back to the local shop?
e-Commerce enablers Chart
6
・Customer search in lifestyle app will ・Wastage of time when you go to local
Scalp
show the nearest shop where the item is shop and find out the item is out of
Scalp Distance Inventory available. stock.
100M 2
200M 1 -Go to local shop and pickup the item
Customer immediately.
-Support local community by buying
I want to buy Organic Shop
shampoo immediately… items from local shops.
I cannot wait for Amazon’s Route
delivery…
Local communities are prospered because consumers, brands not only reduce costs but also in
buying locally will create more local jobs building a long term relationship.
10 BayCurrent Consulting
Image/video driven interactive e-Commerce Chart
9
Viewer
・Platforms, where digital content like photos, ・When platform users enable the buy option, ・Users are taken to multiple online stores
videos are shared, use AI to track the store details like brand, price and link to store are depending on the content clicked
where products shown in digital content are displayed on top of digital content ・Through this solution brands can skip using
Explanation sold
・When user clicks, the user is taken to the big online marketplaces like Amazon
・Platform users are attracted by the content corresponding online store where the
shown on digital content and want to buy it product is in stock
Key ・Common standard data image file format is required to simplify the find store with same/similar item
challenges ・Video matching computing power
・Monetization model
Preetham Edamadaka:
Senior Manager in the Singapore Office.
Copyright © 2019 BayCurrent Consulting Inc. All rights reserved.