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Top 14 Marketplaces for Selling Digital Products: the Best Global Practices

Ksenia Cheburova — Mon, 25 Dec 2023 14:14:29 +0000

In today’s increasingly digital world, selling digital products has become a lucrative endeavor for many individuals and businesses alike. With the convenience of online platforms, creators can turn their digital content, such as e-books, music, software, or photography, into profitable ventures. In this article, we will explore the top stores and marketplaces for selling digital products and uncover the best global practices that can help aspiring sellers succeed.

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1. Amazon

Amazon, known for its vast selection and customer-centric approach, has emerged as a dominant player in digital sales. The company’s Kindle e-readers and Fire tablets have revolutionized the way people consume books and other digital media. Amazon Prime, with its streaming services and digital content library, further strengthens their position in the digital product space.

E-books: Amazon’s Kindle Direct Publishing platform enables authors to sell and distribute their digital books effortlessly. KDP provides user-friendly tools for formatting, uploading, and promoting e-books, allowing authors to access a wide global audience. With features such as Kindle Unlimited and promotional tools like Kindle Countdown Deals, authors can effectively enhance their book’s visibility and sales potential.
Graphics and digital art: Artists and graphic designers can showcase their unique pieces by uploading images to Amazon Merch on Demand. This provides the opportunity for their work to appear on various products like t-shirts, mugs, bags, and pillows. Amazon’s print-on-demand service eliminates the need for inventory ownership to sell products. Upon receiving an order, Amazon handles the printing and shipping of the product to the consumer, while the seller earns a royalty for the sale.
Music: Through TuneCore, an offering of Amazon Music, musicians can swiftly upload their songs and make them instantly accessible across numerous platforms such as Amazon, iTunes, Spotify, and Google Play, along with 150+ other global stores.
Apps and games: The Amazon App Store enables sellers to distribute their applications or games to millions of Amazon devices in over 230 countries. This includes availability on Amazon Fire TV, Amazon Fire tablets, and the Amazon Appstore on Windows 11.
Audiobooks: Using Audible’s Audiobook Creation Exchange, anyone can create and self-publish an audiobook on Amazon. Similar to KDP, once the audiobook is uploaded, it becomes available for purchase and download by all Audible customers.
Video: For creators of movies, short films, or shows, making their content available on Prime Video Direct provides an excellent opportunity to reach wider audiences through Prime Video.

2. Apple Digital Ecosystems

Apple has effectively integrated its hardware and software ecosystem. The App Store, iTunes Store, and Apple Books provide users with a comprehensive array of digital products for their iPhones, iPads, and Macs. The App Store presents a vast selection of iOS apps, catering to diverse needs and interests.

3. Google Digital Ecosystems

Google, equipped with the Android operating system and the Google Play Store, caters to a vast global user base. Offering a diverse range of digital products, such as apps, movies, music, and e-books, Google has effectively established its presence in the digital sales market. Its seamless integration across various devices and user-friendly interface has contributed to its significant market presence. The Google Play Store is the primary platform for Android users, providing an extensive collection of apps, games, movies, and books. Its integration with various Google services and devices ensures a cohesive user experience.

4. Walmart

Walmart offers an excellent opportunity to promote a wide range of digital products, including tax software and music downloads, among others. To commence selling digital products on Walmart Marketplace, you’ll need to register as a third-party seller, create a storefront, and list your products. This encompasses uploading files such as e-books, music, videos, or software, and setting prices for your items. It’s essential to adhere to Walmart’s policies and guidelines, as well as to fulfill the associated fees charged by Walmart.

5. eBay

eBay, an esteemed e-commerce platform, provides sellers with the opportunity to showcase a diverse range of digital products to a vast global audience. Whether you’re an artist, musician, software developer, or author, eBay serves as an ideal platform to exhibit your work and engage with millions of active buyers. Sellers can offer a wide array of digital products through eBay, including music, software, ebooks, art, digital photographs, digital trading cards, virtual items related to online gaming, digital trading cards, videos, digital textbooks, and electronic tickets.

Nevertheless, it’s important to note that selling unauthorized software keys or digital copies/codes of movies not intended for individual resale is prohibited. It must be included as part of the sale of the physical product.

It is crucial to ensure that these products are appropriately formatted and protected to prevent unauthorized copying or downloading. eBay has specific guidelines for selling digital products, including the necessity for secure file delivery and a digital rights management (DRM) system. Adhering to these guidelines is essential to guarantee a smooth and legally compliant selling experience on eBay.

6. Envato Market

Envato Market is an expansive ecosystem specifically designed for creatives to sell and purchase digital assets, such as themes, templates, audio tracks, video footage, and more. The platform is split into various marketplaces, each tailored to cater to different digital products. Envato offers a high level of exposure and visibility, attracting millions of customers and boasting a strong community of sellers.

Envato Market provides a platform for authors to directly sell their items to customers. Authors upload their work, users purchase and license the item, and authors earn from these transactions. The customer base on Envato Market ranges from smaller to large enterprises, specifically those seeking to acquire individual items as per their requirements. Additionally, authors who have received invitations to sell on Envato Elements may have their items featured on both platforms, subject to the type of content.

Envato Market encompasses a diverse range of categories and marketplaces, such as:

ThemeForest for Web Themes & Templates.
AudioJungle for Audio & Music (temporarily not accepting new authors).
VideoHive for Video Templates & Stock Video.
PhotoDune for Stock Photos.
GraphicRiver for Graphic Fonts, Logos, Icons, Templates and more.
CodeCanyon for Code Script Items.
3DOcean for 3D Print Models and CG Textures.

7. Etsy

Though traditionally known for handmade and vintage items, Etsy has expanded its marketplace to include digital products as well. Artists and designers can sell digital prints, wedding invitations, artwork, and much more on Etsy. The platform provides a user-friendly interface, extensive marketing and promotional tools, and a substantial customer base looking for unique digital creations. Etsy takes a 6.5% + $0.3c transaction fee for every digital product plus $0.20c for every digital product you list on their platform.

Some of the products can be sold on Etsy are:

ebooks (.mobi, .epub, pdf),
music (mp3),
notes,
custom GIFs,
Microsoft document,
any image files (jpg, png, bmp),
movies (.mov).

8. Creative Market

Creative Market offers a dynamic online platform tailored for designers to vend diverse digital assets like fonts, graphics, templates, and themes. This marketplace not only provides exposure to design professionals and enthusiasts but also fosters a robust community conducive to exploration and collaboration. Sellers benefit from the flexibility to establish their own pricing and retain a substantial share of their earnings, making it an advantageous choice for those aiming to maximize profits.

For designers, artists, or creators seeking to generate supplemental income through the online sale of digital products, Creative Market serves as an excellent starting point. At present, Creative Market imposes a 40% transaction fee on every sale. In return, sellers gain visibility among 8 million members, access to their streamlined eCommerce solution, and insights into current market trends offered by the platform.

9. ClickBank

In recent years, ClickBank has emerged as a hallmark of internet marketing, renowned as the premier platform for purchasing and selling digital products. This is the hub where product owners and affiliates can connect with each other to facilitate those sales. With a dedicated customer base enthusiastic to discover innovative offerings within their specific niches, ClickBank presents an optimal marketplace.

The platform’s affiliate program is celebrated for driving significant revenue through the utilization of ClickBank’s extensive promotional resources. Notably, the product spectrum on ClickBank is predominantly centered on educating users about harnessing the full potential of internet marketing, with recent emphasis on topics such as email marketing and organic promotional strategies.

10. Udemy

Udemy’s prominence as the largest marketplace for course creators is underpinned by several compelling reasons. As of 2023, Udemy boasts an extensive catalog of over 204,000 courses offered in 75 languages, catering to a global student base exceeding 40 million, establishing itself as a trusted leader in online education.

Upon joining as a creator on Udemy, ample resources are extended to provide support at every stage of the course creation process. Notably, Udemy offers its marketplace insights to all creators for free, featuring valuable data on student demand, search volume, and revenue potential for various topics.

Udemy encompasses popular course categories in business, technology, and personal development, addressing the diverse interests and aspirations of learners. The platform maintains a transparent payment system, ensuring that instructors receive 97% of revenue when students utilize their coupon code and 50% when they arrive organically through search.

11. Folksy

Folksy, a marketplace based in the UK, serves as an outstanding platform for trading unique handmade items and is also a thriving hub for digital downloads. Delve into the limitless opportunities offered by Folksy to exhibit and vend various digital products, such as wedding invitation templates and gift cards.

12. Creative Fabrica

Creative Fabrica is an open marketplace that allows independent designers, illustrators, and creative professionals to upload and sell their digital products. These products range from laptop stickers to wall art, and everything in between: fonts, graphics, crafts, embroidery, bundles. The website’s designs are quite unique and come from a variety of contributors, making it a great place to find something truly original.

13. Loopazon

Loopazon serves as a platform for producers to exchange their loops, samples, acapella vocals, tracks, and beats. There are Loopazon’s video tutorials and music-related articles to acquire knowledge for creating samples and loops, for instance, “The Top Free VST Plugins for FL Studio.”

14. Shutterstock

Shutterstock is an online stock photo and video platform. Users can browse through the extensive catalog of high-quality images and clips and purchase a license to use them for commercial or personal projects. Shutterstock has a variety of image categories, including nature, architecture, business, people, and more. Its search engine allows users to find specific images based on keywords, keywords and phrases. Alternatively, users can use the advanced search options to filter images by specific criteria, such as image size, color, date, and more.

Key Global Tips to Sell Digital

When it comes to selling digital products on these platforms, there are a few best global practices to keep in mind:

Quality Matters: Ensure your digital products are of high quality and provide value to customers. Positive reviews and ratings play a crucial role in gaining visibility and attracting potential buyers.
Optimize Descriptions and Keywords: Craft compelling descriptions and use relevant keywords to improve your products’ discoverability within the platforms’ search algorithms.
Leverage Marketing Tools: Utilize promotional options provided by the platforms, such as limited-time discounts, special offers, or cross-promotion opportunities, to effectively reach and engage with your target audience.
Engage with the Community: Actively participate in forums, groups.

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Looking to sell your digital products? CS-Cart allows you to set up a specialized marketplace of digital products or a mixed marketplace that offers both physical and digital goods. You can swiftly create an online store to sell ebooks, music, video content, and digital art. Selling downloadable products is effortless with CS-Cart. Simply upload your file, set a price, and select a payment option.

Cart-Power is the official CS-Cart partner. We provide services for development from scratch and grow online business. Launch website of digital products of any scale with Cart-Power! Creating an Online Store for Digital Goods with CS-Cart: A Guide to Setup and Cost Estimation.

The post Top 14 Marketplaces for Selling Digital Products: the Best Global Practices first appeared on Cart-Power.

Mastering Digital Goods: Key Insights into Selling and Platform Selection for Success

Ksenia Cheburova — Tue, 19 Dec 2023 14:12:24 +0000

Digital goods, also known as digital products, play a crucial role in the dynamic development of electronic commerce, offering significant potential for entrepreneurs. In this article, we aim to provide insights into the various types of digital goods, their benefits, and strategies for generating income in this industry.

Introduction

CS-Cart is a popular ecommerce platform that can be utilized to build a website selling demo access to cash gambling games. Some popular cash gambling games that can be offered include:

Aviator – This is a crash-type game where players bet on how long a virtual airplane will fly before it crashes. The longer the flight, the higher the potential payout.
Space XY – A spaceship flying game where players cash out before the spaceship crashes. This game has a space exploration theme and multiplying payouts.
Aviatrix – A medium volatility crash game featuring an aviation theme and NFT integration, allowing players to customize planes.
Magnify Man – A superhero-themed gambling game featuring expanding symbols and focusing on instant wins.
JetX – A fast-paced crash game featuring a jet plane theme and elements of skill-based gambling.

Steps to Create the Gambling Games Website

Install CS-Cart and activate a gaming demo data addon which contains base templates for a gambling site.
Create product categories for each type of cash gambling game offered. Configure category settings.
Add each gambling game as a digital product within the appropriate categories. Enter product descriptions, pricing plans, demo access details, and media.
Setup online payment methods to allow visitors to purchase demo access or play money for the games.
Design the frontend of the site through templates and skins to have a gambling aesthetic.
Add dynamic blocks and widgets to promote top games and new additions.
Configure shipping and order management rules for digital fulfillment.
Launch the site and continue adding new cash gambling games over time to expand the offerings.

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What Are Digital Goods

Digital goods encompass products and services that are delivered in electronic format, such as subscriptions, graphics, online courses, music, videos, software, games, in-game items, and online consultations. NFT tokens, a type of digital goods gaining global popularity, are also available for purchase, sale, or exchange. In our article “NFT Marketplace – What Is It And How To Create It?” we provided in-depth insights into creating a marketplace for NFT goods.

These goods do not necessitate physical delivery and can be transmitted to the buyer online following payment, providing them with online access or a download link for the file.

According to JPMorgan Research, the annual expenditure on digital goods exceeds $54 billion, and it is projected to reach $74 billion by 2025. This market expansion is propelled by the uptake of Internet technologies, evolving consumer preferences, and overall technological advancements.

The Profitable Nature of Selling Digital Goods

Streamlined Launch: Transitioning digital products and services to a marketplace or personal website demands minimal effort, offering a swift start for sellers already equipped with digital assets.
Simplicity and Cost Efficiency: Digital goods eliminate the need for packaging, storage, and delivery, reducing logistical and warehouse expenses.
Effortless Profit Generation: Following an initial investment in product development, digital goods can be sold repeatedly without additional production costs, thereby generating passive income.
High Margins: The production cost of a digital product primarily consists of the content and visual display for the online store, facilitating high profit margins.
Scalability: Non-physical products can be produced, duplicated, and sold in substantial quantities, allowing for diversification of product offerings and accelerated sales growth without excessive expenditures.
Reduced Risk: Testing and modifying a digital product is cost-effective, enabling sellers to ascertain its success before a large-scale launch.
Sustained Demand: Statistical agencies indicate that the sale of digital goods is among the fastest-growing sectors, with an average annual growth rate of 10 to 15%.

Who Can Benefit from Establishing a Business in the Realm of Digital Goods?

Experts who are already selling their non-physical products through other channels. For example, if you sell educational materials or guides through social networks, then launching an online store will not be difficult.

For a business that wants to expand its range and receive passive online income. For example, if you already have a restaurant, you can add a section with: master classes and recipes. If you have an offline business, such as a pottery workshop, you can sell an online course on your own website.

Here are a few examples who should think about launching their own online store or marketplace for digital goods:

Creative professionals: artists, designers, photographers, writers, musicians, videographers and digital content creators. They can sell their works and creative works through their own online store or marketplace.
Experts and Consultants: Professionals in business consulting, education, healthcare, fitness, psychology and other fields can develop and sell digital courses, e-books, video tutorials and other information products.
Software developers and technicians: They may offer digital tools, apps, templates, website themes, and other digital solutions.

Entrepreneurs who want to occupy a promising and profitable niche in e-commerce. Then it’s time to decide on the right digital product to sell.

8 Profitable Digital Products to Sell

1. E-Courses

Online courses and video lectures are currently among the most sought-after digital products. Creating them does not necessitate significant investments and can leverage existing expertise. The course format can range from short, insightful videos to comprehensive programs for mastering new skills. Once developed, the course can be marketed for years, enabling easy scalability for the business. Even with a modest audience, profitability is achievable.

Pros:

High potential earnings.
Profitability feasible with a small audience.
Utilizes existing expertise.

Cons:

Requires profound understanding of the target audience to achieve success.
Demands more creation time compared to smaller digital products like guides.
Significantly valuable content needed to compete with free resources.

2. Expert Guides

Experts can monetize their knowledge by offering downloadable training materials, usually in the form of PDF documents, to teach specific skills or provide practical advice. Achieving profitability necessitates a substantial audience and top-quality content. If the individual already conducts consultations and webinars, minimal additional material creation is required.

Examples:

Collection of child-friendly recipes.
Pet training guides.
Gardening and plant care guidelines.
Social media guides and instructions.
Knitting or crocheting master classes.
Analytical reports.

How to Begin:

Identify the most frequently asked questions in your profession. These inquiries are perfect topics for your materials. Dedicate time to crafting high-quality guides and utilize tools like Canva to personalize the appearance and save them in PDF or EPUB formats.

Pros:

Easily created, often using existing materials.
Quick preparation of all files.
Utilizes pre-existing skills.

Cons:

Challenging to generate profit without a high sales volume.
Competes with free content.
Strong marketing and promotion required for consistent income generation.

3. Online Services

Another option is to advertise your services digitally. These service advertisements are designed similarly to other digital products. Internet-based services like online advertising creation, coaching, consulting, and mediation are in high demand.

Examples:

Interior design consultations.
Online personal training.
Career coaching.
Nutrition consultations, dietary guidance.

How to Begin:

Develop a service package tailored to your target audience. Promote the services on social media platforms.

Pros:

Opportunity to better understand your audience.
High profitability.
Low initial investment.

Cons:

Lack of passive income.
Limited scalability compared to traditional digital products.
Demands expert’s time and active participation.

4. Design Templates

Pre-made templates that allow users to incorporate their information are also popular. Types of templates that consistently attract users include website designs, elements for creating unique images, and graphic templates for social media, all of which are constantly in demand due to the increasing number of online purchases.

Examples:

Graphic design web templates.
Canva templates.
Social media graphics templates.
Printable planner templates.

Pros:

Relatively easy to learn.
Lower time commitment compared to larger digital products like courses and software.
A viable source of passive income for experts.

Cons:

Requires a large sales volume to be profitable.
Necessitates an effective sales funnel for consistent income.
Competition with freely available content.

5. Software and applications

Software and applications stand as some of the most lucrative digital products, necessitating a considerable amount of expertise, time, and financial investment for their development. Moreover, continual maintenance is essential post initial product release. The demand for online services and software spans diverse business domains, catering to large corporations, small enterprises, and individuals requiring applications for accounting, inventory management, business process organization, task tracking, and cloud data storage.

For instance, Cart-Power operates an online store that offers ready-made solutions for CS-Cart and Multi-Vendor, catering to specific features or industry-specific needs that are not readily available on the CS-Cart platform. Each add-on can be effortlessly customized to align with unique business requisites.

Examples:

Operating system licenses and antivirus software.
License codes for software activation.
Highly specialized software applications.

How to begin:

Identify the market needs for essential programs, applications, games, or SaaS products. Promote the software or game via popular app stores like the App Store or Google Play Store.

Pros:

Potential for consistent monthly revenue.
Innovative software products can generate substantial profits.
Expansion opportunities for software development firms beyond small-scale enterprises.

Cons:

Requires coding skills or a proficient development team.
Initial investments in time and finances are comparatively high.
Elevated risk of failures and returns.

6. Digital art, images and sound

Producing and selling digital art enables individuals to earn money while pursuing their passion. This category of product can be lucrative, but it necessitates the acknowledgment of the creator and an engaged audience, resulting in a higher entry barrier compared to other forms of digital content.

In contrast, stock images, videos, and audio are inexpensive and demand substantial traffic to generate profits.

Examples:

Written notes.
Data bits.
Licensing offers.
Drawings and illustrations.
Collections of stickers.
Photographs and video footage.
NFTs.
Printable coloring pages.
Animated motion design.
3D graphics.
Infographics.
Standard sound effects.

Pros:

It offers a reliable source of passive income with a defined audience.

Cons:

It operates within a highly competitive market.
Safeguarding the copyright of digital art can be challenging and requires awareness and compliance with copyright and related rights legislation.
There is a risk of piracy.
A substantial customer base is necessary to generate income from stock products.

7. Filters, fonts, presets

Filters, fonts, and presets are set to become increasingly popular, much like web design templates, and are poised to attract a dedicated customer base. This is driven by the ongoing digitalization of various services and the growing demand for individual online projects. Their development demands strong visual appeal.

Examples:

Vector illustrations.
Icon sets for websites or applications.
Fonts.
Social media filters.
Text effects.
Digital wallpapers.
Stickers.

Pros:

Ease of content creation.
Low time commitment.
Potential for passive income.

Cons:

Requires software for creation.
Significant traffic and sales are necessary to generate profit.
Faces stiff competition.

8. Subscriptions

Selling access to content or services for a specific period offers a predictable income stream for sellers and digital marketplaces, often renewing automatically at regular intervals and conveying a sense of savings to the buyer.

Examples:

Educational email newsletters.
Podcast subscriptions.
Digital magazine access.
Vlog subscriptions.
Weekly meal plan access.
Guided meditation subscriptions.

Pros:

Reliable source of recurring monthly income.
Potential for high profitability.
Fosters strong brand loyalty.

Cons:

Not entirely passive income, as continual content development and supplementation are required.

Where to Sell: Your Own Platform or an Existing Marketplace

Selling digital products through established marketplaces may seem like the simplest option. Numerous multi-category platforms such as Amazon, Walmart, and eBay exist, alongside specific marketplaces like Etsy for handmade art, ThemeForest for digital artwork and code, and Udemy for courses, and more. Top 14 Marketplaces for Selling Digital Products: the Best Global Practices.

These platforms offer the benefit of high recognition, substantial traffic, and a loyal customer base, making product placement straightforward and rapid.

However, this approach is not without significant drawbacks:

Certain digital products may not perform well on cross-category marketplaces due to the availability of specialized services for purchasing and consuming such goods. Before entering a marketplace like Amazon, it’s advisable to explore niche platforms tailored to your target audience.
Promoting digital products on multi-category marketplaces can be challenging since these platforms may allocate less advertising space for digital goods compared to physical products. Niche marketplaces often provide special promotion tools for their sellers.
Multi-category marketplaces, where physical and digital goods coexist, present the risk of buyer confusion, potentially leading to negative feedback for the seller.
The commission on marketplaces typically ranges from 5 to 30% of the product price, and the withdrawal of funds for the author may be inconvenient or subject to internal limitations.
High competition on marketplaces necessitates a unique offering to differentiate your digital product.
Constraints on implementing monetization schemes and sales funnels are common on marketplace platforms.
Dependency on third-party traffic and marketing efforts can result in fluctuating visibility and traffic, especially when platforms change their ranking algorithms.

Setting up your own online store for selling digital goods involves tasks such as uploading products, designing the site, creating content, and implementing advertising. Despite the initial complexity, this approach offers compelling benefits:

Independence from content ranking tools on external platforms, allowing you full control over your content’s display.
The ability to configure flexible advertising settings, including contextual and targeted advertising to attract potential customers.
Retaining the full commission for your digital products or expert services, ensuring you receive the entire amount from each sale.
Swift withdrawal of earnings, with funds directly deposited into your account upon customer purchases.
Leveraging various marketing tools to inspire customer engagement, such as offering gifts, coupons, discounts, and other incentives.
Opportunity for additional monetization through the creation of sales funnels around your primary digital product. For instance, providing templates or presets for photos as part of a subscription for a social media promotion guide.

Furthermore, establishing your own marketplace is more straightforward than it appears. For example, platforms like CS-Cart support downloadable products and can be easily tailored to accommodate the specific needs of any business with the assistance of expert teams.

Developing your own marketplace permits the launch of diverse online businesses centered around digital goods, such as an online school, a publishing agency, a digital art gallery, an NFT platform, a music platform, or a games and software store. Content creators act as sellers, with the potential for increased profitability as more sellers register and attract more buyers. This business model is particularly promising, given the 15% annual growth of the digital goods market.

How to Start Selling Digital Goods

If you already possess a pre-existing website or social media page, employing turnkey solutions like CS-Cart allows for the swift launch of an online store. Even its core functionality encompasses essential features for promptly establishing various e-commerce projects. As your online store starts generating revenue, you can enhance the out-of-the-box functionality with features tailored to your specific requirements, precisely when needed.

For those in the initial stages of entering the digital products market, adhere to these steps:

Identify your niche and gradually familiarize yourself with the market. Ensure there is demand for your product by determining the problems it addresses, its utility, potential objections from prospective buyers, and strategies for resolving them.
Assess your competitors and pinpoint what sets your product apart. Seek to strengthen your solution to a specific issue or introduce an innovative, original approach.
Select the most suitable platform to host your digital business.

CS-Cart provides built-in support for the sale of digital goods, allowing you to effortlessly establish a specialized niche store or a comprehensive marketplace offering downloadable products. The user-friendly layout editor enables the creation and updating of pages directly from the storefront without the need for programming expertise.

As an official partner of CS-Cart, Cart-Power specializes in supporting businesses from their inception to development. They are equipped to assist with diverse projects across various industries or business models. Whether you seek to launch a profitable marketplace or an online store for digital goods, Cart-Power can offer valuable assistance on CS-Cart. Creating an Online Store for Digital Goods with CS-Cart: A Guide to Setup and Cost Estimation.

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The post Mastering Digital Goods: Key Insights into Selling and Platform Selection for Success first appeared on Cart-Power.

Central Europe’s E-commerce Landscape: Statistics and Features

Ksenia Cheburova — Wed, 15 Nov 2023 05:05:23 +0000

Central Europe presents a burgeoning market with promising prospects for online business expansion. This is due to the less underdeveloped state of e-commerce in comparison to Western European nations. As a result, numerous new enterprises are emerging, extending their operations beyond their domestic borders. In our upcoming review, we will outline the unique aspects of e-commerce in Central Europe and highlight the key trends deserving of attention.

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Comparison to Other European Regions

The region comprises Austria, the Czech Republic, Hungary, Poland, Switzerland, Slovakia, Slovenia, and Liechtenstein.

The European Ecommerce Foundation estimates that in 2022, 91% of Central Europe’s population will use the Internet, with 77% making online purchases, aligning with the average across European regions.

The gross e-commerce turnover in Central Europe experienced its first decline in 2022, attributed to several factors. Firstly, the surge in online trading during the pandemic in 2020 and 2021 tapered off, contributing to this decline. Secondly, consumer caution in light of the inflationary pressures in 2022 impacted purchasing behavior. It is anticipated that growth will recommence in the latter part of 2023, although it is expected to remain subdued even into 2024.

Regional Overview

The population of Internet users in Central Europe is steadily increasing. Additionally, there was a rise in the proportion of online shoppers until 2022. Nevertheless, forecasts indicate a 2% decrease in this figure in 2023, linked to escalating inflation in Europe and a broader decline in purchasing power. The populace has become more prudent in their expenditure, extending to online transactions.

Switzerland leads the region in these metrics, with 100% of the population using the Internet and 90% engaging in online purchases. Online shopping is also prevalent in Slovakia (85% of online shoppers) and the Czech Republic (84% of online shoppers). The other countries in the region fall behind those in Western and Northern Europe in these aspects.

In Central Europe, consumers have traditionally favored national and EU sellers. Nevertheless, in 2023, there has been a shift as buyers are placing less emphasis on the origin of the seller and product, instead prioritizing better prices.

Features of Leading Countries

Austria

Cross-border commerce surpasses local trading due to shared language and cultural ties between Austria and Germany, leading many Austrians to favor German platforms like amazon.de. Additionally, products from Italy, Switzerland, and the Czech Republic are frequently purchased.
Emphasis on environmental sustainability is evident through the use of eco-friendly transportation for deliveries and a preference for recyclable packaging.
There is a notable trend of digitalization among small and medium-sized enterprises, with 84% having established their online presence and 30% actively conducting e-commerce. This is anticipated to drive substantial growth in Austria’s e-commerce market in the near future.
The adoption of advanced technologies is also noteworthy, with 8% of retailers already utilizing AI-based solutions, and 23% planning to implement them in the current year. Furthermore, 2% have developed their own AI applications in collaboration with technical partners.
Direct-to-consumer (D2C) strategies are becoming increasingly popular, as major manufacturers strive for direct sales and the development of private labels.
Social commerce, especially through platforms like Instagram and TikTok, is gaining traction, particularly among Gen Z consumers.

Poland

Sustainability efforts include the reduction of packaging waste responsible for carbon emissions, along with initiatives for environmental certification and product labeling.
Logistics optimization initiatives are underway in urban centers such as Gdańsk, Poznań, Warsaw, and Kraków, involving the development of efficient delivery routes, including those facilitated by bicycle couriers, to minimize CO2 emissions and operational costs.
Efforts are being made to reduce returns by implementing Product Information Management (PIM) systems. PIM systems aid in generating comprehensive product descriptions and rectifying inaccuracies.
The legislative framework is also evolving, with the government formulating support measures for consumers and businesses. Consumers are being educated on safe online shopping through government-led programs, while small and medium-sized enterprises receive guidance on establishing online stores, digitalizing business operations, and engaging in online exports.

Switzerland

Data protection measures were strengthened in Switzerland in January 2023 with the introduction of a new data protection law, mirroring the regulations of the European Union. Companies are now required to disclose the involvement of third parties in the sharing of personal data, the duration of data storage, and its intended purpose.
The concept of “logistics of smart cities” encompasses a range of initiatives aimed at optimizing logistics, exploring sustainable and eco-friendly delivery methods, and minimizing partial deliveries and returns in Switzerland. Delivery services in the country are striving to achieve zero CO2 emissions.
Efforts to reduce returns involve implementing charges for most return transactions. Additionally, the introduction of AI assistants for selecting clothing sizes and providing prompt feedback on each return has been initiated.

The Czech Republic

Slow progression of digitalization. The digitalization of public services by the government is advancing at a sluggish and ineffective pace. Furthermore, the integration of technologies such as ChatGPT and AI has not yet had a significant impact on e-commerce, emphasizing the need for future prioritization in this domain.
Cross-border trade between the Czech Republic and Slovakia. The e-commerce markets of the Czech Republic and Slovakia are intricately linked in various aspects, including logistics, software and services, as well as corporate collaborations. The comparable consumer shopping behaviors and preferences in both countries render them well-suited for cross-border trade and mutual purchases.

Hungary

Government assistance for domestic retailers primarily pertains to the FMCG (consumer goods) sector, where regulations and specific taxes create complexities for foreign retail chains.
Some delivery services are prioritizing environmental sustainability by utilizing electric vehicles and bicycles for transporting goods to city centers.
A surge in inflation is evident, with Hungary experiencing its highest average inflation rate since 1998, at 14.5%. This has spurred an increased demand for more affordable and substitute goods.
The implementation of AI is being leveraged to enhance product descriptions and automate marketing processes.
Cross-border trade is expanding, with an increasing number of online stores entering the Hungarian market from neighboring countries such as Slovakia, the Czech Republic, Poland, and Romania. To support Hungarian companies in cross-border trade, the Hungarian Digital Retail Alliance has been established, with significant investments from prominent entities including Google, DHL, and Mastercard.

Popular Payment Methods

The preferred payment methods in the majority of Central European countries include bank cards, PayPal, digital wallets, open banking, and mobile payment systems. For example:

EPS
Sofort
Przelewy24
BLIK
PayU
Paysera
Appe Pay
Google Pay

Switzerland exhibits variances from regional patterns with:

53% of consumers favor bank transfers through payment platforms like SUPER, Powerplay, Available and Trustly.

24% of consumers opt for credit or debit cards such as Visa, Mastercard, and My one.

20% of consumers select digital wallets including Apple Pay, Google Pay и PayPal, Twint and Skrill.

Insurance coverage constitutes over 50% of payments and encompasses more than 30% of all Swiss payment providers.

Popular Categories

Based on information from Statista and ECDB, the primary e-commerce categories differ from country to country in Central Europe, but the top 5 categories overall are as follows:

Fashion
Consumer electronics
Cosmetics and body care
Household appliances
Toys, hobbies, DIY

Key Players

Central European markets are largely dominated by marketplaces, aligning with a global trend outlined in The Marketplace World 2022 study, which projects that over 40% of global e-commerce revenue will be attributed to marketplaces by 2024.

Amazon

The leading player in the Austrian e-commerce market generated a revenue of $922.4 million in 2022.

Zalando

Innovative online clothing store with delivery throughout Europe.

Kaufland

Kaufland.de ranks among the top 15 largest European trading platforms based on visitor count. Its substantial brand recognition also contributes to its popularity in Central European countries such as Austria, the Czech Republic, and Slovakia.

Allegro

The largest trading platform in Poland. It has existed since 1999 and sells products of almost any category.

Alza

The largest online store in the Czech Republic, one of the sales leaders in Central and Eastern Europe.

Emag

The online store offers a wide range of categories including electronics, household appliances, food, and more, attracting 6 million monthly visitors to the platform.

Fruugo

A diverse marketplace that operates in 46 countries, the platform utilizes an algorithm to translate product descriptions into 28 languages.

Spartoo

A platform based in France offering branded clothing, shoes, and leather accessories sourced from across Europe.

Euronics

A platform with an international reach, Euronics connects independent retailers of electronic goods across Europe and caters to over 600 million customers.

Challenges

Rising inflation.

According to a GfK Consult report for April 2023, inflation has emerged as the primary social concern in Europe, exerting a negative influence on consumers’ purchasing behavior both online and offline. In Austria, for instance, 21% of the populace can only afford essential goods, leading to a nearly 8% decline in e-commerce sales, marking the most significant downturn in Austrian history.

Reduced brand loyalty.

Inflation has also impacted customer loyalty levels, with a November 2022 survey by Marigold and Econsultancy revealing that 38% of European consumers have either switched from or reduced their loyalty to previously favored brands over the past year.

Challenges in adhering to EU regulations.

In Poland, trading platforms are now required to provide consumers with more comprehensive information about promotions, in compliance with EU mandates. This necessitated revisions to documentation and frequently required online store redesign. Further limitations relating to EU legislation are detailed in our review “E-commerce in Western Europe: Trends and Best Practices”.

Local tax implications.

As of July 1, 2021, new VAT regulations for cross-border e-commerce took effect in the EU. These changes are intended to streamline trade for EU residents, but may induce constraints for non-EU residents.

Restrictions on direct delivery to Austria.

As of January 1, 2023, all sellers lacking a presence in Austria but supplying goods to end consumers in the country are required to appoint a designated authorized representative. This representative must ensure that goods are packaged in compliance with waste recycling legislation, presenting a substantial entry barrier into the Austrian market along with additional costs. Experts anticipate that this will result in reduced cross-border sales.

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Key Findings

Central Europe contributes approximately 8% to the total e-commerce turnover in Europe.
In 2022, the region experienced a decline in gross e-commerce sales due to the inflation, but a recovery is anticipated in the second half of 2023.
Switzerland, Slovakia, and the Czech Republic are home to the most active online shoppers.
The primary market players are German trading platforms.
Significant cross-border trade has been established, particularly between Germany and Austria, the Czech Republic and Slovakia, owing to historical ties, shared consumer habits, and language.
The region aligns with pan-European trends, emphasizing environmental sustainability, combatting returns, and harnessing AI.
The D2C market is also undergoing development in the region.

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E-commerce in Africa: Growth Potential, Leading Marketplaces

Nataly Komonova — Tue, 14 Nov 2023 13:10:49 +0000

Africa boasts a youthful population, rapidly expanding urban centers, and a swiftly rising level of disposable income. With 54 countries, each at varying stages of economic development, the continent hosts diverse economic landscapes.

The annual online retail revenue in Africa is approximated at $20 billion, constituting merely 3.5% of total retail sales. Africa’s population, standing at 1.35 billion, is comparable to China’s. Importantly, unlike China, Africa’s population is experiencing rapid growth, indicating that the demographic pyramid will continue to skew towards younger individuals for several decades.

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Equipped with a burgeoning population and economic potential, Africa is primed for rapid expansion, both in its general economy and within the realm of ecommerce.

The key findings about Africa ecommerce market:

Africa’s youth population is rapidly expanding, embracing technology and the internet at varying rates across the continent.
The adoption of technology, the spread of the Internet and payment tools is developing unevenly across the continent.
Notably, there’s been a surge in funding for African e-commerce and retail tech startups, totaling 557 million U.S. dollars in 2022.
Micro, small, and medium-sized enterprises (MSMEs) actively use social networks as a platform for online sales.

Reasons and Growth Peculiarities

Between 2023 and 2027, the E-commerce market in Africa is projected to witness a steady rise in users, with a total increase of 174.7 million users.

In 2021, the African continent surpassed other regions in mobile internet usage, exceeding the global average by 13% and boasting nearly 5% more mobile usage than the markets in the Asian region. This trend underscores the importance of adopting a “mobile-first” approach for any business seeking to engage with diverse African markets through online sales.

Social commerce for MSMEs

The research indicates that a notable proportion of micro, small, and medium-sized enterprises (MSMEs) in six African countries – Nigeria, Kenya, Ethiopia, Ghana, South Africa, and Egypt are increasingly adopting social media as their primary platform for engaging in e-commerce. It is contributing to the success of numerous small businesses across Africa.

Only South Africa more relied on specific e-commerce platforms, despite the fact Egypt and South Africa have similar levels of digital literacy and thriving digital ecosystems. But this is explained by preferences in payment methods. The typical consumer in South Africa is more accustomed to making online payments, whereas cash payments are prevalent in Egypt.

Social media serves as an accessible marketing tool for promoting goods without requiring extensive digital literacy, training, or registration processes. As people were already utilizing social media for communication purposes, they seamlessly integrated it as an initial step in their business sales process without additional investment.

In this region, buyers commonly engage in direct interaction with sellers. Social networks effectively fulfill this need, enabling buyers not only to communicate but also to gain deeper insights and immerse themselves in the seller’s business.

Investments in economy

A strong and stable economy boosts consumer confidence, leading to a greater willingness to participate in digital transactions. Assured by a thriving economy, consumers are more likely to increase their online spending on various products and services, spanning from essentials to discretionary items. Furthermore, economic stability often attracts heightened domestic and foreign investment. A robust economy captures the interest of both local and international investors seeking promising markets for investment. E-commerce platforms, valued for their scalability and lower operational costs compared to traditional retail, emerge as appealing investment prospects.

African e-commerce and retail tech startups secured a total of 557 million U.S. dollars in funding as of 2022, representing a notable increase from the approximately 326 million U.S. dollars raised in the previous year. Out of the 663 startups that secured funding in the continent during 2022, approximately 32.4 percent operated within the financial technology sector. Following closely were e-commerce and retail tech, each accounting for 16.7 percent of the total number of funded startups, with e-health at 8.4 percent. In total, African startups amassed over 3.3 billion U.S. dollars in funding in 2022.

Market Challenges and Issues

Payment system

Throughout history, Africa’s population has exhibited a preference for cash payments over electronic and online transactions, reflecting a widespread distrust in a region characterized by notably lenient government regulation. This skepticism is reinforced by low levels of computer literacy, limited bank account ownership, and a fragile telecommunications infrastructure, collectively exacerbating the issue.

According to Statista, in 2022, cash emerged as the primary payment method for online retail in Morocco, Egypt, and Kenya, constituting 66%, 57%, and 40% of the total, respectively. Conversely, cash was less prevalent in South Africa, where 44% of e-commerce payments were conducted by card, and 19% via bank transfer. In Nigeria, the majority of digital buyers favored card-based payments (37%) and bank transfers (26%).

Currently, the following online payment options are available in African countries:

mobile money
card payments
bank transfers.

Despite consumers having access to a variety of payment methods such as e-wallets, mobile money accounts, and traditional bank accounts, the lack of interoperability remains a significant issue. This is compounded by the absence of harmonization in regulations across different countries, leading to a lack of connectivity both domestically and internationally within payment systems.

Market fragmentation

Market fragmentation in Africa presents a significant challenge for ecommerce due to the continent’s diverse languages, cultures, and consumer behaviors. With 54 countries, each at varying stages of economic development, Africa’s consumer landscape is incredibly varied.

The sheer variety of languages spoken across the continent requires businesses to localize their content, communication, and customer support to effectively reach and engage with diverse audiences. Moreover, cultural differences impact consumer preferences, purchasing habits, and perceptions of trust and credibility, further complicating the development of standardized ecommerce strategies for the entire continent.

Infrastructure

Several African countries share similar rankings to nations facing significant logistical challenges, such as Afghanistan and Haiti, in terms of supply chain reliability, predictability, and resilience to disruptions. The ease with which goods and services can be transported is a critical factor in facilitating business operations. The Logistics Performance Index assesses the convenience, speed, and simplicity of transport within the continent, with African nations typically receiving ratings ranging between 1.77 and 3.43 out of a possible 5 points.

The Main Ecommerce Players in Africa

Online shopping in Africa has generated approximately $37 billion and is projected to potentially exceed $82 billion from 2022 to 2027. Specifically, in 2022, the revenue from online shopping in Africa was estimated to be about 37 billion U.S. dollars, a substantial rise from the approximately 13 billion U.S. dollars reported in 2017.
Ten countries in Africa dominate the online business landscape, collectively representing 94% of all e-commerce transactions. Nonetheless, nearly a quarter of the continent’s countries lack a suitable transactional marketplace for direct online payments.

South Africa and Nigeria stand as Africa’s largest B2C E-Commerce markets, boasting the highest E-Commerce sales values when compared to Egypt, Kenya, and Morocco. The majority of payments in South Africa and Nigeria were made via cards, in contrast to a larger portion of total payments stemming from cash-based transactions in Egypt, Morocco, and Kenya. In terms of local competition, Nigeria-based Jumia represents one of the foremost companies in these markets. Jumia and other regional players encounter robust competition from cross-border online shopping platforms, including AliExpress and Amazon, both of which are gaining traction among digital consumers in Africa.

Nigeria

Nigeria presently boasts 90.9 million e-commerce users. As indicated by a recent report, the Nigerian e-commerce market is anticipated to experience a substantial 12.24% CAGR from 2022 to 2027. Nigeria is emerging as a market propelled by advanced infrastructure, high internet penetration, and a growing number of card-based payment systems.

The pandemic has notably accelerated digital purchases and cashless transactions across the country, leading to a remarkable 30% increase in 2021. The Nigerian e-commerce market has contributed to about 29% of the global growth rate.

Egypt

Egypt, with 55.7 million e-commerce users, has emerged ahead of South Africa as the largest marketplace, expected to achieve a revenue of approximately $7,909.9 million by the end of 2023. It is projected to maintain a compound annual growth rate (CAGR) of 14.7% and reach a market volume of around $13,677.5 by 2027. This growth is attributed to Egypt’s large population and rapid internet penetration, with a population of about 99.3 million, making it the third most populated country in Africa.

Kenya

Meanwhile, Kenya, with 22.6 million e-commerce users, has demonstrated vibrant activity in its e-commerce sector. The COVID-19 lockdown facilitated the establishment of more online businesses, resulting in promising growth. Although specific data may be unavailable, Statista suggests that Kenyan e-commerce has been on the rise and is projected to reach an estimated volume of $2 billion by 2024.

South Africa

South Africa’s e-commerce landscape, with 27.4 million users, experienced a 66% surge from 2019 to 2020, exceeding $1.8 billion. Notably, the clothing and apparel, online entertainment, and grocery categories witnessed substantial growth due to lockdown restrictions amid the pandemic. Additionally, the fast food category observed significant growth, propelled by heightened competition from both local and foreign platforms. South Africa has IT hubs all along the Western Cape province – among which is the city of Stellenbosch is known as the Silicon Valley of South Africa.

The Leading Online Platforms

Jumia

Jumia is a prominent e-commerce platform operating in several African countries. Often referred to as the “Amazon of Africa,” Jumia offers a wide range of products and services, including electronics, fashion, home goods, and more. It functions as a marketplace where third-party sellers can list their products, reaching a large customer base across the continent.

In addition to e-commerce, Jumia has expanded its services to include food delivery, hotel and flight bookings, and digital payment solutions. The company has invested in developing its logistics and last-mile delivery capabilities to overcome the unique challenges of operating in diverse African markets.

Jumia has also made strides in promoting financial inclusion by offering digital payment options and facilitating access to credit for both customers and sellers. The company has garnered considerable attention for its innovative approach to e-commerce in Africa and its efforts to address the logistical and infrastructural challenges associated with online retail on the continent.

Takealot

Takealot is a leading South African online retail platform that offers a diverse range of products and services. Takealot provides a comprehensive marketplace for consumers, featuring categories such as electronics, fashion, home essentials, beauty products, and more. It serves as a platform where third-party sellers can list their products, giving customers access to a wide array of items from various sellers.

Beyond e-commerce, Takealot has expanded its offerings to include services such as food and beverage delivery, as well as digital entertainment and e-books through its subsidiary, Superbalist. The platform has made significant investments in logistics and last-mile delivery to ensure efficient and reliable delivery services across South Africa.

Takealot has been at the forefront of digital innovation in the region, offering multiple payment options and integrating various technological solutions to enhance the overall customer experience. With its widespread popularity and strong market presence, Takealot has established itself as a key player in shaping the e-commerce landscape in South Africa and adjacent regions.

Konga

Konga is a well-known Nigerian e-commerce platform that provides a wide range of products and services to its customers. Konga operates as a marketplace where customers can find diverse items, including electronics, fashion, beauty products, home essentials, and more. In addition to offering a platform for third-party sellers, Konga also operates as a direct retailer for certain products, ensuring a multifaceted shopping experience for its customers.

Konga has expanded its services to include digital payment solutions, food and grocery delivery, as well as travel and event ticketing. The platform prioritizes customer satisfaction and aims to provide a seamless shopping experience through innovative technologies and reliable delivery services.

Konga has expanded its services to include food and grocery delivery, enabling customers to shop for a variety of food items and have them delivered to their doorsteps. Besides this the platform facilitates the booking of travel tickets and event tickets, offering customers the convenience of making travel and event arrangements through its platform.

Souq

Souq, which is now known as Amazon.eg, was a leading e-commerce platform in Egypt, offering a diverse range of products and services to customers in the region.

In Egypt, the platform achieves nearly ten million monthly visits and offers a diverse array of products, encompassing electronics, appliances, homewares, groceries, fashion, books, toys, and fitness items. Souq operates as both a retailer and a marketplace, maintaining its distinct design and branding, which bears resemblance to Amazon’s style.

It’s important to note that Souq Egypt retains its separate seller registration system. All orders are fulfilled by Souq rather than the individual sellers. Consequently, businesses are required to furnish a warehouse or store address within Egypt for the courier to collect orders. Commission fees for sellers on the platform range from 5% to 20%.

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E-commerce Dynamics in North America: Exploring USA and Canada

Nataly Komonova — Fri, 10 Nov 2023 10:13:55 +0000

Global e-commerce sales are forecasted to achieve US $58.74 trillion by 2028, with an anticipated compound annual growth rate (CAGR) of 26.55% from 2022 to 2028. In 2023, it is anticipated that e-commerce will comprise 22.3% of total retail sales. North America, being a highly developed and technologically advanced region, is well-positioned to manage the surge in e-commerce adoption and expansion. The North American e-commerce market is expected to undergo a growth of 12.5% CAGR from 2022 to 2027.

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How E-Commerce Developed in the Last Time

Before the pandemic, e-commerce in the US and Canada experienced steady growth driven by factors such as increasing internet penetration, technological advancements, shifting consumer preferences, and the expansion of online retail offerings by both established retailers and digital-native brands. The period leading up to the pandemic was marked by a gradual but consistent increase in online sales and the adoption of e-commerce as a preferred shopping method for many consumers.

During and after the pandemic, e-commerce in the US and Canada witnessed a significant acceleration and transformation. The pandemic served as a catalyst for rapid growth, as lockdowns and social distancing measures prompted a surge in online shopping. It led to an expansion of contactless delivery options, and a heightened focus on omnichannel retail strategies as traditional retailers sought to adapt to the changing landscape.

E-commerce in North America was already on an upward trajectory, but the events of the pandemic accelerated and reshaped the e-commerce landscape. This led to a more pronounced reliance on online shopping and the adoption of new e-commerce practices.

The Current E-Commerce State in North America

SaaS Solution for E-Commerce

The US and Canada are leading the e-commerce SaaS market. There is a growing trend of cloud-based software as a service in the region, with e-commerce companies incorporating these services into their business growth strategies. An example of this is the introduction of the Cadence on Cloud SaaS and e-commerce platform by Cadence Design Systems, a US multinational corporation. This platform, powered by Amazon Web Services (AWS), caters to businesses embracing a “cloud-first” approach, providing design and analysis solutions that are accessible from any device, anywhere.

SaaS solutions offer for:

Store Management (Ecwid, Shopify)
Express Service
Customer Service
Shipping Companies

Mergers and Acquisitions

Many regional companies are trending towards mergers and acquisitions to bolster their capacity in the e-commerce sector. Merger and acquisition (M&A) activity reached an all-time high in 2021, propelled by historically low interest rates and the Federal Reserve’s quantitative easing initiative, which provided companies with abundant cash and accessible credit. Inflation reduced M&A and total value in 2022 amounted to $1.477 trillion. As an illustration, Descartes, a Canadian software-as-a-service solutions provider, recently revealed its acquisition of XPS Technologies, an e-commerce shipping solutions firm, for a sum of USD 65 million.

Cryptocurrency

During the period spanning from July 2022 to June 2023, North America emerged as the global leader in the crypto market, with approximately $1.2 trillion in on-chain value, as reported by Chainalysis. According to NBC News, around 21% of adult Americans have possessed cryptocurrency as of 2022. Over 15,000 businesses globally, including notable entities such as Microsoft, KFC, Burger King, and Subway, have embraced Bitcoin payments. Within the US, this accounts for 2,300 businesses.

New Payment Solutions

The e-commerce platform not only offers customers a wide range of purchasing options across various sectors, but it also presents them with financial incentives through cashback schemes, allowing for cost savings at scale. For instance, Rakuten Rewards Canada, a leading shopping site offering Cash Back and rewards, has introduced an innovative initiative enabling Canadians to earn Cash Back when engaging in real estate transactions. Through Rakuten’s approved partners, Canadian homebuyers can receive up to USD 25 Cash Back for every USD 10,000 of finalized real estate transaction value in the initial phase of the Make Your Move program.

Fashion merchants noticed the most significant impact on overall business after introducing alternative payment options. The most popular options are “Buy Now, Pay Later” and “Buy Online, Pick Up In Store.”

Mobile Commerce

In 2022, the mobile commerce market in North America accounted for approximately 37% of the business share. The growth of educational STEM toy startups is contributing to the expansion of the regional market. North America’s thriving market is attributed to its advanced digital infrastructure and consumers’ strong preference for convenience. Contributing factors in mCommerce are AR technology, one-click ordering, payment options, competitive pricing.

Category and Digital Penetration

In 2022, the clothing and footwear segment secured the largest market share, representing over 25%. The consumer electronics segment is anticipated to become the fastest-growing segment, with a projected CAGR of 16.4% from 2023 to 2030.

The Main Online Trading Drivers

Consumer interest in convenient shopping solutions. In the past, online shopping was primarily favored by millennials and Gen Z. However, the pandemic has made online retail more appealing to consumers of all ages. Now, individuals of all age groups are increasingly opting for home delivery, appreciating the convenience, reliability, wide-ranging choices, and flexibility it offers.

Mobile shopping and social commerce

Sprout Social’s shopping report revealed that 98% of consumers intended to make at least one purchase through social shopping or influencer commerce in 2022, and this trend shows no sign of slowing down. If you haven’t begun selling on social media, it’s highly likely that your competitors already have or are intending to do so.

Mobile shopping intersects with other popular e-commerce features such as live stream shopping, augmented reality shopping, and in-app purchases, and it is projected that its usage will increase in 2023.

Fulfilment and delivery

58% of Canadian consumers indicated that the speed of delivery influences their purchases, while 46% mentioned being motivated by the expected delivery date provided by the retailer. Studies have shown that a majority of consumers consider the speed of delivery and the anticipated delivery date as influential factors in their purchasing decisions. Furthermore, as the e-commerce landscape becomes increasingly competitive, offering fast and reliable fulfillment and delivery services can serve as a significant differentiator for businesses, contributing to customer satisfaction and loyalty.

Subscription payment models

Businesses are increasingly embracing subscription models to attract and retain loyal customers, aiming to enhance profitability and improve retention rates. The popularity of subscriptions and memberships is growing in response to economic volatility and inflation.

In the B2C sector, brands are promoting subscription plans as a means to save money, with some offering lifetime price guarantees as an incentive for registration. Additionally, exclusive membership communities, such as Fabletics and Lululemon, are gaining prominence. These models leverage the fear of missing out (FOMO), providing members with VIP-style treatment and exclusive access to products, events, and more.

Government support

In recent years, global trade and shipping activities have seen a surge due to cross-border shipment agreements and trade liberalization policies. A notable example is the Progressive Trans-Pacific Partnership (CPTPP), reflecting the trend of increasing multilateral free-trade agreements. Free Trade Agreements (FTAs) are playing a significant role in escalating the demand for international e-commerce transportation.

Additionally, bilateral free-trade agreements such as the Canada-U.S. Free Trade Agreement between the U.S. and Canada are impacting the demand for cross-border e-commerce services. These developments are anticipated to create additional trade opportunities in the upcoming years, thereby stimulating the e-commerce fulfillment services market in the region.

New technologies in shopping experience

More pragmatic applications of AI in customer service are beginning to surface. Although not all AI implementations have been successful, businesses have leveraged AI to generate responses for practical customer care interactions such as tracking item statuses. The use of AI is anticipated to enhance efficiencies as customer journeys are expected to grow increasingly intricate in the future.

“Try before you buy” undergoes a transformative shift with the advent of augmented reality (AR) commerce, employing 3D mapping to enable customers to test products or preview experiences before committing to a purchase. AR has significantly reshaped various industries, particularly in fashion, beauty, and home decor, by placing the product or service directly at the customer’s fingertips. Brands actively use VR/AR/XR.

Voice searching: with a significant and growing number of individuals using voice-enabled devices such as smartphones, smart speakers, and virtual assistants to perform online searches, access information, and execute commands. The convenience and hands-free nature of voice search have contributed to its widespread adoption, with many users leveraging this technology for tasks ranging from searching for information, making queries, and even initiating online purchases.

Holidays driving consumption

Holiday sales play a critical role in U.S. and Canada online commerce as they often drive a substantial portion of annual revenue for many businesses. These sales events, such as Black Friday, Cyber Monday, and the holiday season as a whole, present an opportunity for retailers to attract a surge in online shoppers, capitalize on consumer spending trends, and boost their sales figures.

Amazon, Target, Macy’s hire workers for the holiday shopping season in stores and warehouses. Amazon has announced its intention to recruit 250,000 U.S. employees for the holiday shopping season, marking a 67% increase from its hiring numbers over the previous two years. This move reflects the company’s efforts to enhance next-day delivery services for its customers.

The major holidays that have impact on consumer behavior:

Thanksgiving Day
Christmas
Valentine’s Day
Back-to-School
Easter

Ecommerce in the US Overview

The United States occupies the second position in the global e-commerce market, with online sales totaling $875 billion, constituting 14.83% of the market. Leading e-commerce players such as Amazon, eBay, and Walmart have emerged as key industry frontrunners, offering consumers an extensive array of products and services.

A critical contributing factor to the success of e-commerce in the US is the notably high internet penetration rate, which stood at 91.8% in 2023. This signifies that over 311 million Americans have access to online shopping platforms, facilitating easy comparison of prices, reviews, and features across various products.

Amazon dominates the e-retail landscape in the U.S., holding the largest share of the online shopping market and surpassing competitors in e-retail sales. In 2021, Amazon notably outpaced its U.S. counterparts, with retail e-commerce sales in the country reaching an impressive 386 billion U.S. dollars. Other notable successful online shopping platforms include eBay, Walmart, Target, and Apple.
While the market is diverse and offers products across various sectors, certain categories have seen particularly high demand. These include food, pet supplies, baby products, clothing, and accessories.

In the United States, 96.9 million individuals are engaged in shopping through social media platforms, such as Facebook and Instagram. This behavior has become commonplace, and it is projected that the number of social buyers will rise to 114.3 million, signifying an 18% increase.

Ecommerce in Canada Overview

Canada is positioned as the 9th largest eCommerce market globally, and it is forecasted to generate approximately US $55,145.2 million in revenue by 2023, surpassing Italy in this aspect. The projected compound annual growth rate (CAGR 2023-2027) stands at 10.6%, with an estimated market volume of US $82,449.8 million by 2027. In 2023, the Canadian eCommerce market is anticipated to contribute to a 10.9% increase, aligning with the global growth rate of 9.6% for the same year. Concurrently, worldwide eCommerce sales are expected to elevate in the coming years.

According to Statista, the number of digital buyers in Canada is projected to reach over 26 million by 2024, indicating a substantial portion of the population engaging in online shopping.

Among the eCommerce segments in Canada, Toys, Hobby & DIY commands the largest market share, constituting 25% of the Canadian eCommerce revenue. Following closely is Fashion, accounting for 22.4%, followed by Electronics & Media at 19.9%, and Food & Personal Care at 18.2%. The remaining 14.4% is attributed to Furniture & Appliances.

A majority of Canadian online shoppers, approximately 59%, opt to use credit cards for their online transactions, while an additional 20% utilize PayPal. Furthermore, there is a steady surge in the adoption of digital wallets, anticipated to represent about 27% of online payments by 2025.

Canada’s eCommerce infrastructure is notably advanced and intricately linked with that of the United States. The widespread availability of broadband internet access throughout Canada, often leveraging similar equipment as in the United States, further supports this integration. U.S. companies have the option to seamlessly incorporate Canadian transactions into their existing websites without the need for a separate platform.

News From the Main Market Players

The slowdown in subscriber additions following the pandemic has prompted businesses to modify their terms and conditions. In an effort to increase subscriptions, Netflix has discontinued its standard commercial-free plan in the U.S. and UK, while Disney has hiked prices for its ad-free tiers. In the upcoming year, Amazon Prime Video is set to follow its streaming competitors by implementing ad rollouts and introducing a premium ad-free tier at a higher price.

Amazon, the worldwide e-commerce giant, has revealed its intention to launch its online shopping platform in South Africa by 2024. This decision represents a substantial penetration into a market that has been primarily dominated by Naspers’ TakeAlot.

Amazon and Shopify have reached an agreement enabling merchants who utilize Shopify’s ecommerce tools to leverage Amazon’s logistics network. Amazon asserts that this integration boosts shoppers’ confidence in making purchases from unfamiliar brands or websites due to the trust associated with the Amazon experience.

Walmart intends to introduce over 25 healthcare centers to certain stores next year, further expanding its provision of primary care and additional services. These new centers will be integrated into Walmart Supercenters, delivering primary and dental care, behavioral health, audiology support, and various other services. Presently, Walmart operates 32 centers and will incorporate 17 more in Florida this year.

eBay invested in AI to grow GMV. The Magical Listing tool assists sellers in creating detailed and compelling product listings. By leveraging AI capabilities, this tool aims to streamline the listing process, improve the quality of product descriptions, and enhance the overall selling experience for eBay users.

Michaels has recently debuted MakerPlace, an online marketplace designed to cater to DIY enthusiasts and creators. With a focus on handcrafted products and unique artisanal items, MakerPlace provides a platform for sellers to showcase and sell their creations without any listing fees, positioning itself as a competitive player against established platforms like Etsy.

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