Today The Official Merchant Services Blog revisits one of its favorite topics: E-Commerce. Specifically we’re going to focus on the staggering growth in E-Commerce and the sky high expectations revolving around its continued success.
Trillions Upon Trillions
Once again turning to Internet Retailer and its Industry Statistics coverage, we’ve found a report by Interactive Media in Retail Group (IMRG), a U.K. online retail trade organization, that states worldwide business-to-consumer e-commerce sales will pass the $1.25 trillion mark by 2013, and the total number of Internet users will increase to approximately 3.5 billion from around 2.2 billion at the end of 2011. The study also found that e-commerce sales in 2011 increased almost 20% from 2010, clocking in at $961 billion.
Also the data revealed China turbo-boosted its e-commerce growth quicker than Paul Walker’s character in The Fast and the Furious, as the up and coming economic titan of Asia grew its e-commerce market by a whopping 130% in 2011. The rapid growth spurt however still didn’t put China ahead of the old standbys. The United States remained the world’s single biggest e-commerce market, followed by the United Kingdom and Japan. IMRG estimates that growth rates in those countries will be approximately 10-15% a year going forward.
In fact, the Euro states are forming quite the tight knit club of competition in e-commerce market share and are starting to outclass the North American Region. According to a separate report released recently by the European Multi-channel and Online Trade Association, European online business-to-consumer sales posted 19% growth in 2011 to reach an estimated $307 billion, surpassing North America at $297 billion.
Much of this data just demonstrates exactly how pervasive online shopping is becoming worldwide. So while some jockeying for position between regions is nice, the real impact of this data is that the rest of the globe is quickly catching up with the leaders in e-commerce market share. Point blank, people everywhere are shopping online, thus buying things with credit cards through the internet.
Billions Upon Billions
Back in May the U.S. Commerce Department estimated that United States e-commerce sales totaled $50.27 billion in the first quarter. This figure is up 15.4% from the $43.58 billion in the first quarter of 2011 — and marks the first time e-commerce sales have topped $50 billion outside the fourth quarter, which generally has much larger sales due to the holiday shopping season. In fact, the holiday shopping season spike helped account for a quarter to quarter dip in e-commerce sales. On a quarter-over-quarter basis, e-commerce sales declined 18.6% from Q4 2011, according to the Commerce Department.
The Commerce Department found that on a seasonally adjusted basis e-commerce accounted for $53.16 billion of the $1.08 trillion of total retail spending during the first quarter — roughly equal to 4.9% of total retail spending. This means that Quarter 1 2012 e-commerce sales increased 15.4% year over year on the seasonally adjusted basis, whereas total retail sales grew 6.5%.
What it all Means
The data being compiled here serves as a spotlight for two primary points that The Official Merchant Services Blog keeps coming back to:
- Shopping online has become an accepted and now commonplace activity. Consumers go online with none of the fears they used to have about compromising the security of their credit card information. For better or for worse the convenience has far outweighed the security concerns consumers used to have.
- Computers are much more commonplace in homes across the world — as are mobile devices. The technology has become a staple, thus allowing consumers the ease of access and highlighting the convenience of button pushing versus driving around searching for goods and services.
- Credit Card Processing is a huge beneficiary in this paradigm shift in consumer behavior. Unlike Brick and Mortar store shopping, online shopping is all credit card based transactions.
- This means all online merchants need to be able to take credit card payments. And payment processors are right there in the thick of this e-commerce surge.