As we get older in life, we need to realize that the way we think is often changed by the younger generation, and dictated by advances in technology. The days of getting ready, driving the car to the mall, or walking miles through the city to compare prices and do normal shopping has begun to change drastically. Now sitting in your PJ’s sipping a cup of coffee, and scrolling through the internet is the way people look for new items, and compare prices. And it is not just looking at your local store’s web page on your personal computer, you can now access stores from any point in the world with your phone, or other wireless device.
The trend is e-commerce, and it is having a huge impact on shopping habits, and the way we live our day to day lives. Statistically, retail e-commerce sales worldwide reached $1.67 trillion U.S. dollars in 2015, and B2C (business to customer) e-commerce sales worldwide reached $1.7 trillion U.S. dollars in 2015. That is an increase of +24.5% for retail, and +15.6% B2C from 2014 to 2015. Further, it is expected that in 2016, retail will jump to $2.46 trillion, and B2C will vault up to $1.9 trillion.
The newest trend, mobile commerce, is now accounting for 30% of all U.S. e-commerce, according to internetretailer.com. Their data shows that in 2015 U.S. mobile commerce sales added up to about $104 billion, which was up 38.7% from the 2014 numbers. This is a huge shift in shopping patterns, and is being driven by the younger generation.
This generation drive is showing up in the subsector of U.S. apparel and accessories in retail e-commerce revenues which has seen significant growth over the past few years. According to statista.com, retail e-commerce revenues from apparel and accessories are expected, by 2018, to reach $86 billion in the U.S after producing $44.9 billion in 2013, and $60 billion in 2015. Further, according to eMarketer, in 2016 they estimate that 37.5 million people in the U.S. (19% of smartphone users), will transact with their phones at the point of sale, which would be an overall increase of 61% from the previous year.
With these stunning shifts in shopping habits, it would be wise to look at some of the top ecommerce companies today.
Top E-commerce Companies for 2016
Alibaba Group (BABA – Analyst Report), which currently carries a Zacks Rank of #1 (Strong Buy), operates online and mobile marketplaces in retail and wholesale trade, as well as cloud computing and other services. It provides technology and services to enable consumers, merchants, and other participants to conduct commerce in its ecosystem.
The company just reported their December 2015 quarterly results where they reached a landmark goal by having over 400 million annual active buyers, and maintained their lead position in the mobile segment. Also, the company posted annual revenue growth of +32%. The company witnessed China retail increase +21% from the previous quarter to 407 million active buyers, and mobile MAU’s (monthly active users) jumped up +13.5% to 393 million from the previous quarter.
As you can see from the graph below, estimates for BABA have been improving over the past two years.
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