Worldwide ecommerce continues to grow rapidly every year. Buying products online is seen as the favourite method of purchase in most countries. It is even predicted that by 2040, 95% of purchases will be facilitated by e-commerce. For online stores, it is therefore wise to not only focus on domestic sales, but also on cross-border sales. Cross-border ecommerce is a smart way for etailers to create a wider market, which can lead to increased sales. It is important to take into account that selling products to foreign customers is not the same as selling products to domestic consumers. After all, consumers in every country have different habits and preferences with regards to online shopping. In this blog series we analyse various ecommerce markets. Today part 1: The United States.
Cross-border ecommerce is a smart way for etailers to create a wider market, which can lead to increased sales
Ecommerce market share
Although it is often thought that the United States is the largest market for ecommerce, it is not. Today, China is world’s biggest ecommerce market and the United States is number two. Last year online sales in the United States hit $525 billion, an increase of 34% from $391 billion in 2016. This number is expected to rise to $ 735 billion in 2023. In contrast, it appears that the United States’ share of global sales is decreasing. This is mainly because ecommerce sales in Asia Pacific are increase enormously due to rapid urbanization and technological advancements.
Due to the very good quality of the logistics infrastructure and the high demand for cross-border retailers, the United States is a very successful ecommerce market. The country is led by the ecommerce giants Amazon & eBay, of which Amazon is by far the most popular etailer in the United States. The company is also in first place when it comes to American e-commerce turnover. In 2018, Amazon generated more than $ 235 billion through retail ecommerce sales. eBay, on the other hand, is the most popular online marketplace in the United States.
The American consumer
Americans like to order their products online and have great trust in this. The country has 258.5 million inhabitants, of which 79% made an online purchase in the past year. 29% of Americans even state that they order something online once or twice a week. On average, an American spends $1951 a year on ecommerce.
When American consumers shop online, they most often buy products that fall into the ‘electronics’ category. This category has dominated the American ecommerce market for years. This is followed by miscellaneous, which includes office items, gifts, novelty and souvenirs, and clothing. The “food and beverages” category is in fourth place. This latter category is expected to rise considerably in the coming years. The share of online food and drink sales has already doubled from 2016 to 2017.
Preferred payment methods
The preferred payment method used by consumers varies around the world. In the United States, credit cards are the preferred method of payment, being used by 74%, followed by digital payment systems (38%) and store-specific gift cards (26%). PayPal is the most popular of digital payment systems. Other payment methods that are generating a lot of attention are Apple Pay, Google Pay, Android Pay and Samsung Pay.
American ecommerce trends
A growing trend within the ecommerce market in the United States is the increasing presence of mobile shopping. This growth applies to all age groups. The large number of mobile consumers has an impact on mobile commerce revenue. Mobile retail revenue in the United States is expected to grow from $156 billion in 2017 to about $420 billion in 2021. Mobile sales already account for a large share of ecommerce transactions in total. Last year, one in five American adults was a “mobile-only” internet user.
Another major trend in ecommerce in America is the use of online reviews. More and more Americans place great value on these customer reviews. It plays a big part in their purchasing decisions. Most Americans use search engines for finding recommendations. Next, TripAdvisor, Yelp, consumer organizations and corporate websites are important websites for finding these customer experiences.