Global Market Image 1IORMA provides a growing range of analytical, statistical, research and consulting services regarding the Global Market and is also establishing a physical presence in key International regions.

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 (online) 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 certain, 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: “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 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 over 230 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.

This Overview offers insight in data and trends with respect to retail and B2C e-commerce around the globe, Together with the available global, regional and country data with respect to retail, total B2C e-commerce and online retail it is meant to offer an additional tool for merchants to set up their international strategy.

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 there to further assist companies, organisations and governments in their efforts to realise this international strategy.

John Andrews, Chairman, IORMA

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Global Overview

The outlook for online retail in Europe and around the globe for this year and the coming years is excellent: the UK, France, Germany, the Netherlands and the Scandinavian countries are leading the way with a highly competitive retail market and a mature e-commerce environment boosted by tech-savvy consumers, mobile devices, excellent delivery options and well developed payments systems.

The emerging markets in Southern and Eastern Europe, (including France, Italy, Spain, Turkey, Portugal, Greece Poland and Russia are expected to do even better, reaching growth rates between   15% to 30%.

Outside Europe markets are developing in high pace:  the Asian-Pacific region is one of the fastest growing regions, led by China, Japan and Australia. This region has overtaken the North American and European regions as the largest retail and online retail region in the world.

In Latin America year-on-year growth is still in average around 30% in spite of sometimes faltering economies. The MENA region is a fast growing and emerging region led by United Arabic Emirates and Israel. The Central and Southern African region is still in its infancy but will undoubtedly come up in coming years, including, South Africa, Nigeria, Kenya and others.

IORMA sees the following trends in (online) retail:Share of Online Retail in Total Retail Sales

  • A growing confidence to use the digital media and online shopping,
  • A shift in less mature and developing countries from C2C to B2C (China in particular!),
  •  An creased offer of goods and services available to the consumer,
  • The increasing importance of data and data management by retailers
  • Ever more (domestic) retailers going online,
  • A growing number of e-shoppers,
  • Rapidly growing usage of mobile internet fuelled by smartphones and tablets as well as better conditions and affordable rates,
  • Consequently: an increasing share of mobile commerce,
  • The availability of improved payment and delivery options,
  • In emerging countries a relatively young population ready to pick up new digital technologies and devices and
  • More disposable income together with an upcoming middle class in developing regions.

Supporting a modern (omni) retail experience is or must be on the minds of retailers of all sizes and across the globe.to keep up with the continued demands and high expectations from customers.

 

Global Retail Development Index

 (GRDI) 2014

An extremely useful guide to identify present and future potential and emerging (retail) markets for both Omni- and Online retailers is the annual Global Retail Development Index (GRDI) of A.T. Kearney. The GRDI ranks the top thirty developing countries for retail investment based on several macroeconomic and retail-specific variables. The Index focuses not only on the most successful developing markets today, but also those that offer the most potential in the next years.

Following the trend that set in quite recently, retailers are developing a more strategic approach in their expansion and in avoiding the operational pitfalls of entries into developing markets. Using e-commerce, they are testing demand in new markets to reduce risk, and they are taking advantage of financial vehicles such as credit cards and cash-on-delivery to help increase demand.

Chile ranks one on the 2014 Index, followed by China and Uruguay. Latin America has eight countries represented in the top-30, Asia-Pacific seven; MENA four and Sub-Saharan Africa three. Remarkable is the presence of the four transcontinental countries at the juncture of Eastern Europe and Asia; Armenia (6), Georgia (7), Kazakhstan (10) and Azerbaijan (30).

 

Global Forecast 2014 Retail and Online Sales

Over the past years the retail landscape has changed rapidly and we have seen a shift from the mature, often stagnating economies into the more dynamic emerging markets. This is a trend comparable to the development of e-commerce, where growth in the mature markets is (although still double-digit) slowing down and merchants are looking to expand into new markets.

The future of retail and online are closely linked fuelled by the ever further penetration of mobile, a growing number of young, tech-savvy consumers and a growing middle class.

Total retail sales in 2014 are forecast to reach around 22.1 trillion USD, a growth of 5% compared to 2013. Online retail sales will reach over 1 trillion USD, a share of 62% in total B2C e-sales (including e-services) and a share of 4.6% in total retail sales (up from 3.3% in 2012).

APAC is the fastest growing region: total retail sales are expected to increase go up more than nine per cent and online retail around 40%. The share of online retail in the region will reach 4% compared to 3,1% in 2013.  Other fast growing regions are Latin America and the Middle East and North Africa (MENA), in particular the GCC countries. Africa will take a while longer but is sure to follow in a couple of years.  At country-level the UK takes the lead with a share of online retail of 17.2%, followed by Denmark (11.4%), Norway (10.0%), Ireland (9.9%) and Finland (8.9%).

The following table shows the forecast total retail sales, online retail and the share of online retail in total retail sales for 2014:

 

2014 USD billion

Retail Sales

Online Retail

Share

Europe

4,613

287

6.2%

North America

4,985

318

6.4%

APAC

8,336

330

4.0%

Latin America

2,097

29

1.4%

MENA

766

11

1.4%

Sub-Saharan Region

643

2

0.33%

World

21,440

977

4.6%

See more detailed analysis by continent here

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