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Democratization of Ecommerce Report

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Twenty years after the first recorded online transaction--Sting's CD, Ten Summoner's Tales -- ecommerce is now a worldwide market that stretches from multi-national retailers to single owner-operator small businesses. In fact, in 2015, ecommerce will see $100 billion in total sales. This presentation maps the growth of the industry to show how changing technology has lowered the barriers to entry and allow business owners to create an online store and successfully compete against against brands 100 times their size, at a fraction of the cost.

Published in: Economy & Finance

Democratization of Ecommerce Report

  1. 1. The Democratization of Commerce © 2014 Bigcommerce Pty. Ltd. September 2014
  2. 2. News Summary • 20-year anniversary of the first-ever online transaction • It took 18 years (1994-2012) for ecommerce sales to hit $1T worldwide — and only took two years to get to $1.5T (2014) • Bigcommerce predicts B2C ecommerce sales will hit $2T worldwide in 2015 • Bigcommerce predicts U.S. SMB ecommerce revenues will exceed $100B in 2015 — more than Amazon and eBay worldwide revenues combined • Ecommerce market is ripe for disruption • The democratization of commerce is now: SMBs are winning business from the giants in their industries © 2014 Bigcommerce Pty. Ltd.
  3. 3. © 2014 Bigcommerce Pty. Ltd. 1994 FIRST DOCUMENTED ONLINE SALE - STING’S "TEN SUMMONER'S TALES" CD AMAZON FOUNDED 1995 1998 ANNUAL ONLINE RETAIL SALES HIT $8 BILLION ANNUAL ONLINE RETAIL SALES SKYROCKET 100% TO $16 BILLION 1999 2000 AVERAGE COST TO BUILD FULL-SCALE ONLINE STORE = $100,000 2002 NUMBER OF WEB USERS WHO HAVE BOUGHT ONLINE CROSSES 50% MARK 2004 CREDIT CARD COMPANIES CREATE PCI DATA SECURITY STANDARDS ECOMMERCE SPENDING ECLIPSES $100 BILLION FOR THE FIRST TIME 2006 2007 66% OF ONLINE AMERICANS CLAIM TO HAVE MADE A PURCHASE ONLINE 2008 NUMBER OF SMARTPHONE USERS NEARS 25 MILLION AND 3G WIRELESS BROADBAND SUBSCRIBERS SURPASSES 70 MILLION; BOTH TECHNOLOGIES DRAMATICALLY IMPROVE MOBILE WEB BROWSING 2012 2009 ECOMMERCE SALES TOP $1 TRILLION FOR THE FIRST TIME IN HISTORY BIGCOMMERCE LAUNCHED; COST TO BUILD FULL-SCALE ONLINE STORE = $25/MONTH 2014 ECOMMERCE SALES PREDICTED TO TOP $1.5 TRILLION 20 Years of Ecommerce
  4. 4. SMBs Own 21.5% of U.S. Retail Commerce ENTERPRISE $15M+ MEDIUM $5M-$15M SMALL $1M-$5M © 2014 Bigcommerce Pty. Ltd. SMB (<$15M) # OF MERCHANTS BY SEGMENT ADJACENT MARKET SALES ($) 22k 35K 158K SOHO <$1M 422K TOTAL SMB 614K $961B SOURCES: U.S. Census, 2013 National Small Business Association, Sagence, Inc. analysis. $3.5T $351B $430B $179B
  5. 5. Ecommerce Is Fastest Growing Segment Within Retail © 2014 Bigcommerce Pty. Ltd. $20.7 B $877.7 B CAGR: 13.5% CAGR: 2.5% $1.1 T $71.2 B Q1 ‘05 Q1 ‘14 Retail Ecommerce Sales Total Retail Ecommerce Sales Looking at ecommerce growth from 2005-2009, we see 13.5% CAGR -- 5X faster than retail overall. Now, at the 20 year anniversary of ecommerce, with trends in online shopping, mobile payments and growth in SaaS platform adoption, we’re predicting a growth rate of 25-30% for 2015. Source: Census.gov, USA.gov, SBA.gov, emarketer.com, International Finance Corporation (World Bank), National Small Business Technology Survey 2013, Bigcommerce Internal Data
  6. 6. Bigcommerce 2015 Predictions Worldwide B2C Ecommerce Market will hit $2T • eMarketer data shows worldwide ecommerce sales will hit $1.5T this year • We partnered with outside research firm Sagence; our data shows ecommerce growing at 30% per year US SMB Ecommerce to exceed $100B • 2013 US SMB ecommerce market was $76.76B • SMB ecommerce is a significant growth segment • In 2015, we predict SMB ecommerce will exceed - for the first time - Amazon + eBay WW revenues combined © 2014 Bigcommerce Pty. Ltd.
  7. 7. Ecommerce Ripe for SMB Disruption; Many Enterprise Retailers Are Using Legacy Platforms ENTERPRISE RETAILERS ENTERPRISE RETAILERS • 43% of enterprise retailers are still web-only • 58% of those retailers still use in-house commerce systems SOURCE: 2013 Internet Retailer Top 500, 2014 Internet Retailer Second 500 © 2014 Bigcommerce Pty. Ltd. • Of those web-only enterprise retailers with in-house commerce systems, more than half launched before 2000
  8. 8. There’s an App for That; SaaS Platform Ecosystem Enables SMB Disruption 2013 CLOUD USAGE AMONG SMBS COMMERCE ECOSYSTEM APP STORE 53% SOURCE: Internet Retailer Top 500, Internet Retailer Second 500 © 2014 Bigcommerce Pty. Ltd. DEMAND GENERATION • Best-in-breed has replaced expensive proprietary functionality • It’s difficult for legacy platforms to deliver same level of services as fast or as efficiently as this ecosystem 105% ANNUAL GROWTH RATE BETWEEN 2010 AND 2013 WEB STORES SHIPPING ACCOUNTING PAYMENTS SITE MANAGEMENT MARKETPLACES ERP SOCIAL POS API oAUTH $2M INTEGRATION FUND DEV PORTAL DESIGN PARTNERS
  9. 9. SMBs Can Launch Fully Functional Bigcommerce Store in Less than 30 Minutes What used to take developers weeks-months, now takes 30 minutes. Smart SaaS technology: • Helps automate processes that used to be complicated: credit cards, payment wallets, shipping, taxes • Enables a rich consumer experience: product listings, promotions, personalization can all be created out of the box © 2014 Bigcommerce Pty. Ltd.
  10. 10. Conclusion • 20 years after the first digital transaction, ecommerce is now a rapidly-growing, worldwide network of merchants on par with the world’s largest economies. This will only accelerate in the years ahead. • There is a fundamental shift underway towards best-of-breed platforms, enabling SMB businesses to effectively compete with large, enterprise merchants, many of which still rely on legacy technology platforms. • The barriers to entry are gone: online stores can be created in under 30 minutes, and monthly fees start at less than the cost of a daily cup of coffee. © 2014 Bigcommerce Pty. Ltd.
  11. 11. Report Sponsors About Bigcommerce Bigcommerce is a global ecommerce provider helping entrepreneurs and growing businesses sell more online. Founded in 2009, Bigcommerce supports more than 55,000 stores around the world from its offices in Sydney, Austin and San Francisco. For more information, visit Bigcommerce.com. About Sagence, Inc. Sagence is a specialized firm designed to help organizations drive their businesses with information and insight through better data and analytics practices. For more information, visit sagenceconsulting.com. © 2014 Bigcommerce Pty. Ltd.

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