Internet & Mail-Order Retail
Companies in this industry sell products directly to consumers via the internet, TV, or mail order. Major companies include US-based Amazon, Wayfair, and Qurate Retail Group-owned QVC and HSN, as well as Shop Direct Home Shopping (based in the UK), Otto Group (Germany), Alibaba Group-owned Taobao (China), Walmart-owned Flipkart (India), and Rakuten (Japan).
Globally, annual e-commerce revenue reached $2.3 trillion in 2017, according to eMarketer. Growth is driven in large part by rapidly expanding mobile user bases in emerging markets, increases in mobile commerce sales, and the push into new international markets by major brands. The Asia/Pacific region (China in particular) is the world's fastest-growing market for online sales. Much of the growth in the region will come from rural consumers making purchases from mobile phones.
The internet and mail-order retail industry in the US includes about 37,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $460 billion. Over the past five years, 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.
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.
Amazon.com is by far the dominant global force in internet retail. The company accounted for 44% of all US online sales in 2017 and is projected to reach nearly 50% by the end of 2018, according to data from eMarketer reported by CNBC. The #2 player, eBay, is expected to end 2018 with 6.6% of the market. 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, Japan's largest online retailer, operates Buy.com in the US.
Products, Operations & Technology
Although internet and mail-order retailers sell a variety of products and services, some of the largest product categories are women's apparel, books,
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms