Regional Analysis

Asia Pacific stands to be the largest market for online retail and is also projected to be the fastest growing market. Countries such as China, India and the ASEAN bloc is playing a key factor driving demand for online sales in the region. In addition to this, rising middle class population with growing purchasing power is further boosting market growth in the region. According to Chinese government sources, the middle class in China is expected to expand from 430 million in 2017 to 780 million by 2025. This segment is among the largest contributors towards online sales, and thus, rapid growth of this segment is projected to fuel growth of the online retail market.

According to the industry trade association Associated Chambers of Commerce and Industry in India (ASSOCHAM), the online retail market in India was valued at US$ 38.5 billion in 2017 and is expected to reach US$ 50 billion by 2025. This is due to increasing internet penetration in the country. According to the Internet and Mobile Association of India (IAMAI), the number of internet users in the country is expected to surpass 500 million by June, 2018. This coupled with strong GDP growth and increasing purchasing power of consumers will result in India being the fastest growing market for online retail in the world. In 2016, Flipkart—a major e-tailer in the country—reported that up to two-thirds of the company’s sales were from tier-2 and tier-3 cities in India.

North America and Europe are particularly developed in terms of internet and smartphone penetration. According to World Bank statistics, North America and Europe had average internet penetration rates of 78% and 75%. The market in these regions will be driven by shifting consumer preference from offline to online retail.

Geographies Covered: