The rapidly growing industry will benefit from improving incomes and greater internet access
Los Angeles, CA (PRWEB) October 11, 2012
Every year, more than 100 million Americans purchase goods from the online retail marketplace, one of the fastest-growing industries in the United States. Since the start of the decade, revenue for the E-Commerce and Online Auctions industry has grown at an exceptional rate, outperforming most retail industries in the country. Despite the brief recession-induced slump in 2009, industry revenue is expected to increase at an average annual rate of 10.4% in the five years to 2012, including an 11.9% jump in 2012 to bring revenue to $219.2 billion, says IBISWorld industry analyst Justin Waterman. Because of steady growth, industry profit margins have also improved.
As online shopping becomes more popular, retailers are expanding the products they carry to include common household goods like CDs, DVDs, Blu-rays, books, clothing, footwear and groceries. Hard-to-find niche products or products that are no longer being produced have also found homes online. As product ranges have grown, so has the number of industry operators. The number of enterprises is estimated to grow at an average annual rate of 1.5% in the five years to 2012 to an estimated 52,969 firms. In the coming years, continued economic recovery is expected to contribute to the industry's strong growth, says Waterman. Rising per capita income and employment will improve consumer sentiment, increasing consumers' likelihood to buy. Also, broadband internet adoption will grow in the next five years, boosting accessibility to online retailers. IBISWorld forecasts that these factors will cause revenue for the E-Commerce and Online Auctions industry to grow over the five years to 2017.
The industry has a low level of concentration. The largest players are Amazon and eBay. According to US Census data and IBISWorld estimates, the majority of industry firms employ fewer than five employees. The nature of the industry demands this sort of market share structure because it is not very costly to start an online store, and virtually no skills are required. Over the past five years, industry concentration has increased. The main reasons for the growing market share of major players include plentiful recent acquisitions and major players' ability to expand their product mix to reach a wider customer base. Although the industry is still in the growth stage of its life cycle, acquisitions can indicate a maturing industry as smaller companies struggle to maintain their bottom line due to rising competition. For more information, visit IBISWorld’s E-Commerce & Online Auctions in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The E-Commerce and Online Auctions industry encompasses retail businesses selling solely online (also known as pure play). The internet is the primary selling platform via either a retailer's online store or an auction site. Brick-and-mortar store operators that have also set up websites in conjunction with physical outlets are excluded from this report.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.