Companies in this industry sell merchandise on retail websites, online auctions, mail-order catalogs, toll-free telephone numbers, television shows, or other business channels. Major companies include US-based Amazon, eBay, HSN, QVC, and Newegg, as well as Alibaba Group (China), Asos and Argos (UK), JD.com (China), MercadoLibre (Argentina), and Otto Group (Germany).
Nonstore sales mainly take place online. Annual global revenue from e-commerce is about $3.5 trillion, representing about 14% of overall global retail sales, according to eMarketer. Global online sales are expected to approach $5 trillion by 2021, with much of the growth driven by increasing internet use in emerging markets, as well as rising mobile commerce sales. Top countries for e-commerce sales include China, the US, the UK, Japan, and South Korea.
The US nonstore retail industry includes about 37,000 employer establishments (single-location companies and units of multi-location companies) with combined annual revenue of more than $600 billion. There are also about 150,000 nonemployer establishments with about $8 billion in total annual revenue.
Demand is driven by consumers’ personal income. The profitability of individual online retailers depends on effective marketing and competitive pricing 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 50 companies account for about 60% of revenue.
Companies in the internet auctions industry, such as eBay and Taobao in China, generally compete with online retailers and physical retail establishments. Some companies do business in several of those areas, selling items through conventional e-commerce systems in addition to facilitating consumer-to-consumer bids. Online classified listings such as Craigslist and social media apps that connect potential buyers and sellers may also pose a competitive threat.
Products, Operations & Technology
Major products sold by internet and mail-order retailers include prescription drugs, health and beauty aids, cosmetics, computer hardware and software,
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms