The International Opportunity – 2015

The International Opportunity
Accessing New Markets
Barriers and Opportunities
for Multichannel, Omni and Online-Only Retailers

In present times we are witnessing huge changes in society and the way people do their shopping. Online purchasing is by now fully integrated in our daily lives, fuelled amongst others by the rapid penetration of mobile devices.

Consumers are always connected, using all in- and out-of-store on- and offline options available in order to be informed, to search for the latest competitive offers and to purchase.

Today’s retailers are finding ways to adapt to these changes.

Online retail sales were a major driver for the economies and retail sales over the past years of economic struggle as in many countries double-digit growth rates were realised.

It is sure, that online business is putting pressure on retail stores. Still, it is unlikely that most consumers will soon do all of their shopping exclusively online via tablet in the comfort of their own home. According to the “Trends in Retail Industry 2020” study by KPMG and the Cologne based EHI Retail Institute, local retail stores will remain the first port of call for consumers in the foreseeable future. That being said, retailers would be well advised not to ignore the online trend completely: “A lot of retail stores are afraid they’ll cannibalize their business if they go online as well. But studies disprove this. And those who don’t do any business at all online will lose out in the end for sure.”

The further penetration and integration of online has is enabling retailers to much easier attract new customers as they are more and more opening up their websites to international customers. ASOS for instance is an excellent example. The UK fashion online retailer offers free shipping to 234 countries and has dedicated websites in UK, US, France, Germany, Spain, Italy, Australia, Russia and China. Another opportunity is selling through an online or e-marketplace, which is attractive not only to bigger but also to smaller and medium-sized retailers. Online marketplaces allow (online) retailers to present, market, and sell products to potential customers that otherwise could not or may have been difficult to reach.  The use of international e-marketplaces can provide opportunities for overseas sales that one would not otherwise be aware of.

IORMA is convinced that the future is definitely international. Therefore, now is the time with all the additional opportunities offered by the internet to develop a long-term strategy on how to identify and access interesting new markets, how to avoid the barriers and pitfalls and how to profit from the opportunities offered.

The present Overview “The International Opportunity” which has been prepared by IORMA Research, includes the latest forecasts, enabling insight in data and trends with respect to retail and B2C e-commerce around the globe, Together with the global, regional and country data which will be made available in our Knowledge HUB, with respect to retail, total B2C e-commerce and online retail sales it is meant to offer an additional tool for merchants to set up their international strategy.

Hereunder some of the results taken from this Overview:

• Total retail sales are set to reach around USD 22 trillion in 2014, over 50% of total      global consumer spending of goods and services.

• Total B2C e-commerce (including goods and services) is set to reach USD 1.6 trillion this year, up 19% (calculated in USD) compared to 2013.

• In 2014 total online retail will grow 22% to reach just over USD 1 trillion. The global share of online retail in total retail sales will grow to 4.5%. Absolute champions are the UK with a share of 17.2% followed by Denmark (11.4%) and Norway (10.0%).

• Online retail sales (excluding travel-related and other e-services) are forecasted to increase between 17 and 19% per annum in the forthcoming years pushed by the fast growing markets in Asia and Latin America.

• Asia-Pacific is the fastest growing region in all accounts China leading the way with a forecast growth of 60% this year.

• Apart from the mature markets of Japan, South Korea, Australia and awakening giant India, other (smaller) emerging markets worthwhile to follow are Indonesia, Thailand, Vietnam, Singapore, Malaysia and the Philippines.

• Latin America is led by Brazil (over 40% of the Latin American B2C market) followed by Mexico, Argentine, Colombia and Chile.

• In terms of total e-commerce, the United Arab Emirates (UAE) followed by Israel, Saudi-Arabia and Egypt leads the MENA region. Bahrain has the highest Internet penetration (90%) followed by UAE (88%) and Qatar (85%).

• This year an estimated 150 million consumers will purchase cross-border for a total amount of USD200 billion. By 2020 there will be around 300 million consumers worldwide buying cross-border for an estimated USD 600 billion or over 20% of total online retail sales.

• Africa is still in the very early stages, but both the proliferation of mobile phones and the rollout of faster internet networks have helped the (further) expansion of online retail and e-commerce activities in countries such as Nigeria, South Africa and Kenya

• The total number of people having access to the Internet will reach close to 3 billion by the end of this year. Two-thirds of these users will be in developing worlds.

• There are over two billion active social network users in the world. At the moment, Facebook counts over 1,3 billion users, followed by chat app QQ (848mn) and Chinese Qzone (644mn) users. Whatsapp ranks fourth (500mn).

• The on-going penetration of mobile devices, in particular smartphones and tablets will boost sales of online goods and services as well as retail sales

• There are over 6,9 billion mobile subscribers worldwide, up from 5.9 billion in 2011. Mobile subscriptions outnumber fixed lines 7:1.

• Regions with higher than 100% mobile penetration are: Central and Eastern Europe with 151%, Western Europe 129%, South America 124%, Middle East 112%, South-East Asia 109%.

• By the end of 2013, 6% of the global population owned a tablet, 20% a PC, and 22% a smartphone.

IORMA firmly believes that retailers and online merchants will profit from international expansion through cross-border activities, either by opening up their websites to foreign customers, by joining an e-marketplace or directly.

It is essential to be well informed about language preferences, local conditions, customer’s tastes, legal framework as well as delivery and payment options.

IORMA is available to further assist companies in their efforts to realise their international strategy.

Obtain the full International Opportunity – 2015 Report

• Full report available FREE to IORMA Associates here

or

• Not an IORMA Associate, become one and receive a FREE copy of The International Opportunity – 2015 Report here

• Non-IORMA Associates can purchase and download a copy of the International Opportunity Report for £95  here