The industry posted strong growth across the board, mainly due to convenience and recovering incomes
Los Angeles, CA (PRWEB) June 04, 2013
The Online Baby Product Sales industry has proven to be one of the most successful segments in the retail landscape, effectively defying the downturn in consumer spending in 2008 and 2009. Despite the slowdown, industry revenue an average of 14.5% per year over the five years to 2013, including 11.3% growth in 2013 to reach $5.6 billion. “The proliferation of broadband internet, along with consumers' increasing reliance on the internet for activities like shopping, previously done in stores, is the driving reason behind the rapid revenue growth,” says IBISWorld industry analyst Dale Schmidt. Competitive pricing and the development of multichannel retailing options have enhanced already-strong growth. Mainstream retailers only jumped on board in the past few years due to the success of smaller online-only retailers. However, they have rapidly increased their market share in a very short period of time. This has fuelled price competition and depressed profit margins over the past five years. Despite shrinking profit margins, the industry is in the middle of a period of rapid expansion, as the number of operating firms will grow at an average annual rate of 23.6% over the five years from 2013.
The industry's growth spurt will continue over the next five years. The greater acceptance and need for convenient online shopping platforms will fuel demand as rising employment will cause lifestyles to become busier and workloads to become heavier for many parents. Added to this will be further technological development, greater internet connectivity and further innovation within online shopping platforms. However, the industry's success will encourage larger players to increase their market share, which will inevitably fuel price competition and depress industry profit margins further. According to Schmidt, this could be offset to some extent with the entrance of niche retailers selling premium baby products.
The Online Baby Product Sales industry exhibits a medium level of market share concentration. The two largest operators, Amazon.com Inc. and Toys “R” Us Inc. account for an estimated 52.6% of total industry revenue. For the most part, the rest of industry firms are small, owner-operator companies with a handful of employees. The relative ease of entering this industry, combined with a stable demand from consumers, increases competition by allowing more baby product e-tailers to compete in the market. Market share concentration is projected to remain medium, as the growing popularity of e-commerce and near-constant demand from new parents creates ample opportunities in marketing industry products online. For more information, visit IBISWorld’s Online Baby Product Sales in the US industry report page.
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IBISWorld industry Report Key Topics
This industry retails infant and toddler products on the internet. Industry products include diapers, clothing, shoes, feeding aids, strollers and furniture. Firms purchase products for resale to consumers with no further development of the product. The industry does not include auction or used product websites.
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.