Everything You Need To Know About Trending E-commerce Sectors
Blog: MattsenKumar Blog
The e-pharmacy market is growing with an impressive CAGR of 13.8%; the online food delivery market will be valued at $126.9 billion by 2021, growing with a CAGR of 10.3%. COVID-19 has accelerated the adoption of internet-based businesses; all “electronic commerce” businesses are booming because it reduces human contact and restricts outdoor movement. So let’s look at the trending e-commerce sectors that are changing our world for the good.
Rapidly changing customer preferences is helping entrepreneurs build influential products and scale them readily. With COVID-induced acceleration, people are willing to try new products, and it’s a win-win situation for everyone.
Be it online food delivery or the skincare industry; both registered a massive influx of audience ever since the COVID-19 outbreak in early 2020. Leading players have reported as much as an 80% increase in traffic and sales. Panic buying, hoarding, and fear of missing outplayed a crucial role during the initial stage, but with increasing spread, people got accustomed to e-shopping.
Trending E-commerce Sectors & Trends
Let’s go through a coveted list of e-commerce sectors that have registered incomparable growth. We will be looking at the factors that influenced the development and will also traverse through upcoming trends.
1. E-Pharmacy & Online Delivery of Medicine
Valued at $50.85 billion in 2020, the e-pharmacy industry is growing with a CAGR of 14.8% and is likely to double its worth by 2025. E-pharmacy solves a very prevalent problem of acquiring medicine without leaving the house. It allows millennials to ensure effective delivery of drugs for their old and dependent parents.
E-pharmacy functions are similar to marketplaces like Amazon, where all popular and in-demand medicines are listed in catalogs, which displays brand name, essential tags, and also offers a descriptive understanding of the product. The only difference between e-commerce marketplaces and e-pharmacy stores is that the latter demands a valid prescription. To stop the abuse of online delivery of medicines, the government and medical industry have restricted the quantity.
A study highlights “80% of United States citizens are connected to e-pharmacy. The country has a system where doctors can prescribe medicines through e-pharmacy stores”. During the COVID outbreak, e-pharmacy registered the highest growth rate in the United States. Vitamin, Cold & Flu, and Skin Care were the most demanded products.
Trends in E-pharmacy
Subscription Services: The gradual shift of millennials and baby boomers on the e-pharmacy is encouraging. To sustain the momentum in the post-COVID world, industry leaders are looking forward to coming over the existing silos. By rendering all prevalent challenges obsolete, the industry will be able to outright retail pharmacy and become the mainstream mode of procurement.
To keep the existing customers, e-pharmacy players are doing the following:
- Leveraging AI and ML to predict customer behavior and suggest products (Vitamins& Supplements)
- Inform users about expiring prescriptions and need to revisit a doctor
- Allowing users to book a doctor appointment from the application
- Allowing users to generate repeatable order and take away extra discount
Subscription services are growing popular because it ensures that all older adults have their regular dose of medicine delivered to them uninterruptedly. Subscription services allow millennials responsible for their parent’s medication to never miss out on purchase deadlines. It is perhaps the most loved offering of e-pharmacy players.
Increasing Demand for Wellness Drug: COVID-19 has suddenly awakened the world to the importance of Immunity. Immunity booster is among one of the most searched keywords from 2020. Marketers are rampantly using this keyword to place their products in a COVID-infected market, and it is working too.
Increasing demand for wellness drugs is a good thing for e-pharmacy players; why? Because:
- It helps them build an audience base for repeatable orders
- With AI, players can now recommend products
- Build a D2C presence or get into exclusive deals to further audience growth
2. Beauty & Skin Care
Mamaearth, Wow Skin Care, and Bombay Shaving Company are among the top D2C brands making a difference. All of these brands have successfully built an online presence by:
- Catering directly to the customer through D2C stores
- Banked upon “being chemical-free” ingredients
- Helped people move away from chemical-based products
In 2021, businesses can decide their marketing route and become successful by sticking to it. Today, customers are open to new products; in fact, over 55% of users now prefer buying products directly from the manufacturer’s website instead of Amazon. The D2C movement is on the rise, and Beauty and Skin Care Industry have made the most of it.
While the cosmetic industry continues to grow with a not so impressive CAGR of 5.3% but the channels of procurement have changed. Today, more and more customers are reliant on online channels for getting the best skincare product delivered.
Top Trends from Beauty & Skin Care Industry
D2C brands growing popular: As mentioned earlier, D2C brands are becoming popular because they offer chemical-free products and have a unique branding attached to them. Bombay shaving company placed itself as the preferred choice of millennials, whereas Mamaearth promises to be good for the planet earth.
With D2C players registering unmatchable growth rates and increased marketing budget, more and more customers are likely to pivot towards them. They are delivering a unique experience, and the reduced price is only fuelling their popularity.
Chemical Free Product: It is proven that fairness creams are nothing but a marketing gimmick. Similarly, people are now focussing more on skincare instead of makeup. The lateral shift is coaxing leading players to get rid of chemicals and sulfur as prime ingredients.
3. Online Cab Booking Industry
Currently, the global online taxi market is valued at $23.42 billion with a CAGR of 22.3%; it will likely be worth $28.65 billion by the end of 2021. The COVID-19 outbreak has slowed the demand, but there’s a sharp increase in the audience base.
Earlier, millennials were the most significant percentage of users; today, everyone who wants to step outside intends to take a private cab over public transport. The need for social distancing due to COVID-19 has pushed people to opt for safer means of transportation. The accelerated popularity is now settling as a mainstream means of transport since metros function with restriction in many countries.
Uber is fighting Lyft in the United States simultaneously. It is fighting Ola in India. While the battle for preferred cab aggregator continues, Uber is also focusing one-vehicle and food delivery in multiple countries. The growth opportunities from here are unlimited, and it’s going to be a fun ride.
Top Trends from Online Cab Booking Industry
More significant players acquiring small players: In the recent past, Uber has received over 13 start-ups from cab booking, food delivery, grocery delivery industry. Uber is on a mission, and it is likely to emerge as a winner if it offers a quality customer experience and keeps buying the smaller players.
Similarly, Ola, a cab aggregator from India, a unicorn, has acquired smaller players like Etergo to strengthen its fleet and gain an advantage over its contemporaries.
Pass for Daily Users: If you rely on Ola or Uber for your daily commute to the office, you must have come across weekly and monthly passes that promise to cut your cost by half. These are prepaid passes that take a one-time fee and reduce your daily bill almost by half. Often these passes come with restrictions like:
- Applicable on a limited number of rides daily
- Has to cap for distance. For longer length, you need a different pass.
These passes are helping cab aggregators estimate the number of regular & fixed customer base, which allows them:
- Plan their fleet expansion
- It helps them maintain an advanced escrow fund
- It helps them acquire data, which improves analytics, ensuring the availability of cabs
- It helps them educate drivers about the famous and busy routes
Increasing Fleet of Electric Vehicles: The likes of Ola and Uber have already announced their foray into e-vehicle. Ola is on the run for acquiring e-vehicle start-ups. With a focus on building a unique fleet of electric vehicles, these organizations are helping the existing customer base have access to otherwise not-so-affordable e-vehicles.
4. Online Food Delivery
Valued at $115.07 billion in 2020, the industry will likely be worth $126.91 billion by the end of 2021, growing with a CAGR of 10.3%. By 2025, the industry will be worth $192.16 billion. In 2025, the industry will be saturated, and there will be lesser space for innovation and more focus on improving customer experience.
Online food delivery is a lucrative industry, and reputed players like Uber are now foraying into it. With UberEats, the conglomerate has tried its hand at revolutionizing the way people orders food online.
Top Trends from Food Delivery Industry
Drone Deliveries: Yes! Drone delivery of food is now a possibility. Multiple countries have given the requisite permission for its trial. Shortly, it is going to be a reality. Drone deliveries will reduce human errors and will overcome challenges faced due to traffic.
Food Delivery Subscription: All bachelors are happy with such a service. Now they can have their breakfast and dinner order pre-placed. With a subscription, their breakfast and dinner will reach them on time without any manual intervention. The choice of food from the preferred food joint will be subscribed in advance and delivered at the right time.
Expanding to Grocery Delivery: During COVID-induced lockdown, all food delivery apps were seen delivering essentials. For many food aggregators, grocery delivery is an Exit Strategy. Delivering groceries is helping them finally make some real profit, and it is likely to continue. Procuring fresh vegetable and delivering it to people on time is a profitable business idea, and it will work in all parts of the world.
5. E-commerce Marketplaces
The E-commerce industry is undergoing a significant overhaul. Earlier, B2C players dominated the space with B2B and D2C players; B2C players are losing their luster. While B2B players will only cater to businesses’ needs, the unique customer experience offered on these platforms is now being demanded on B2C media.
On the other hand, D2C players are offering quality products, an exceptional shopping experience at half the price. The E-commerce industry continues to grow at 24% and is likely to take over 95% of all retail transactions by 2040, but there’s a lot to discover and achieve.
Top Trends to Watch Out for
Hybrid Presence: D2C players made a shared affair by establishing an offline store. Today, all brands that are gaining success in the online space are now focused on building an offline presence. The hybrid model helps organization tackle challenges including:
- COVID pandemic where customers faced issues with service, return, and support
- Reliance on retail or online for fulfilling procurement. A hybrid model is the best.
- Support customers through adverse time
- Central management of all data irrespective of the channel used for shopping
Building Emergency Response System: With COVID-induced lockdown, sellers lost millions of products in transit. Similarly, millions of customers weren’t able to return their products. Demand for building an emergency response system is on the rise, and it needs to be attended to seriously.
An emergency response system will:
- Keep the communication channels open
- Help customers find the correct support during adversity
- Improve brand reputation management
Final Thoughts on Trending E-commerce Sectors & Trends
What started with the online delivery of pizza almost three decades ago is now the mainstream shopping mode. From procuring toilet papers to ordering prescribed medicines, customers rely on e-commerce players for all kinds of services and support.
With effective data analytics, product management, and catalog management, all aggregators, marketplaces, and D2C stores can help customers have a great time. Shortly, the dependence is likely to increase. With the hybrid model becoming a reality, online shopping hesitancy will decrease, and the audience base will grow.
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