First Research US Industry Profile

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Internet & Mail-Order Retail
SIC Codes: 5961
NAICS Codes: 454110
Last Quarterly Update: 6/20/2022
Companies in this industry sell products directly to consumers via the internet, TV, or mail order. Major companies include Amazon, eBay, HSN, QVC, and Wayfair (all based in the US), as well as Flipkart (India), Otto Group (Germany), Rakuten (Japan), Taobao (China), and The Very Group (based in the UK).
Online sales forecasts for 2020 will need to be revisited due to the impact of the coronavirus, which has stopped traffic to stores and resulted in a massive shift to online shopping. This is especially true for grocery stores, which, until now, had been the least penetrated ecommerce category. Longer term, consumer shopping habits across a broad range of products -- already in flux prior to the pandemic -- are likely to continue to migrate online (even after it's safe to return to stores), presenting ample opportunity for ecommerce merchants to thrive.
Globally, retail e-commerce sales amounted to about $5 trillion in 2021 and is forecast to reach about $7 trillion by 2025, according to Statista. Growth is driven in large part by rapidly expanding online and mobile user bases in emerging markets, increases in mobile commerce sales, and the push into new international markets by major brands.
The internet and mail-order retail industry in the US includes about 40,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $520 billion. Over the past decade, the bulk of the industry's revenue has shifted from catalog to internet sales. While most brick-and-mortar retailers have an online presence and many also offer catalog sales, this profile focuses on retailers who use the internet or catalogs as their sole or primary sales channel.
Competitive Landscape
US retail e-commerce sales is expected to reach about $2 trillion by 2025, according to eMarketer. Lessons learned by retailers and changes to consumer shopping habits during the pandemic are likely to further accelerate ecommerce growth versus relative to overall retail spending.
Amazon.com -- by far the dominant global force in internet retail -- continues to grow its US sales by above average rates. Multichannel retailer Walmart has been making impressive gains in online sales which increased its online sales by about 40% in 2021. Outside the US, Amazon's largest markets are Germany (where it competes with mail-order-and-internet-giant Otto Group), the UK, and Japan. Rakuten is Japan's largest online retailer and among the world's largest by sales.
Demand is driven by consumers’ personal income. Profitability of individual companies depends on effective marketing to build a customer base. Larger firms enjoy central purchasing efficiencies and economies of scale in inventory management, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products. The industry is concentrated: the top 20 companies account for about half of industry revenue.
Products, Operations & Technology
Although internet and mail-order retailers sell a variety of products and services, some of the largest product categories are medicines and supplements, ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

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