Earlier this month the US Census Bureau announced its estimates for ecommerce sales:
On a not adjusted basis, the estimate of U.S. retail e-commerce sales for the second quarter of 2016 totaled $91.2 billion, a increase of 5.7 percent (±0.9%) from the first quarter of 2016. The second quarter 2016 e-commerce estimate increased 15.8 percent (±1.8%) from the second quarter of 2015 while total retail sales increased 2.1 percent (±0.5 %) in the same period. E-commerce sales in the second quarter of 2016 accounted for 7.5 percent of total sales. –Source
Since inception the online retail and ecommerce industry has grown steadily throughout the world. International Telecommunications Union (ITU) surveys Global Internet Usage and the growth has historically been higher in the developed world compared to the world globally. Internet Usage Worldwide:
ITU surveys show:
|World population||6.5 billion||6.9 billion||7.2 billion|
|Not using the Internet||84%||70%||60%|
|Using the Internet||16%||30%||40%|
|Users in the developing world||8%||21%||32%|
|Users in the developed world||51%||67%||78%|
The world population is estimated at 7.4 Billion people and less than half are estimated to have access to the Internet. This builds a case for high valuations in the ecommerce industry even though arguments exsist even in developing countries that ecommerce as an industry is past the infancy stage. (e-Commerce: Rhetoric, Reality and Opportunity KPMG India)
In 2013, Zulily’s huge exit and massive VC financings to startups ranging from Warby Parker to Quirky made 2013 an active year for venture activity in the Internet eCommerce sector (The Year in eCommerce VC: The Most Active Investors, Largest Deals and Top Exits of 2013). Last year was just as exciting when Q2 of 2015 delivered $1.5 billion to Airbnb, the site that connects people who want to rent out a room or a home for a few days or months. Airbnb has received seven rounds of funding totaling $2.3 billion. This deal, unlike the previous six, was a private equity investment, which usually is a large amount of money for a well-established firm that has received previous VC rounds.
According to Preqin, in the first two months of 2015 ecommerce comprised 47 percent of Internet VC deals and 73 percent of aggregate deal value. Chinese companies accounted for 39 percent of investments and the U.S. and India each contributed 20 percent, with Europe at 19 percent.
The most active American venture capital ecommerce investors are:
- Accel Partners;
- Battery Ventures;
- Bessemer Venture Partners;
- First Round Capital.
Accel Partners is also an active investor in India. Among other American firms that are investing in ecommerce firms in India are Iconiq Capital and Tiger Global Management, which is also now investing in Chinese ecommerce firms. (Source)
The developing countries, especially in Africa and Asia have seen a growth in ecommerce investment over 2015 and into 2016, while internet usage remained low compared to developed nations, investors saw this as an opportunity for large growth.
|Asia and Pacific||9%||23%||32%|
|a Estimate. Internet Usage|
Development of ecommerce websites and marketplaces is also going threw a major shift with companies like Shopify making it easy for a startup company to establish itself as an online retailers rather easily. Similar to WordPress, Shopify now offers plugins on the back-end which sync with suppliers so new online store owners can add products like custom t-shirts, mugs, pens, etc for sale on their website via dropshipping methods.
WordPress is a free and open-source content management system (CMS) based on PHP and MySQL. WordPress is installed on a web server, which either is part of an Internet hosting service or is a network host itself Host_(network); the first case may be on a service like WordPress.com, for example, and the second case is a computer running the software package WordPress.org.