Democratization of Ecommerce Report

© 2014 Bigcommerce Pty. Ltd.

The Democratization of CommerceSeptember 2014


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



1995AMAZON FOUNDED

1994FIRST DOCUMENTED ONLINE SALE - STING’S "TEN SUMMONER'S TALES" CD

1999ANNUAL ONLINE RETAIL SALES SKYROCKET 100% TO $16 BILLION

1998 ANNUAL ONLINE RETAIL SALES HIT $8 BILLION

2002NUMBER OF WEB USERS WHO HAVE

BOUGHT ONLINE CROSSES 50% MARK

2000 AVERAGE COST TO BUILD FULL-SCALE ONLINE STORE = $100,000

2006ECOMMERCE SPENDING ECLIPSES $100 BILLION FOR THE FIRST TIME

2004 CREDIT CARD COMPANIES CREATE PCI DATA SECURITY STANDARDS

2008NUMBER OF SMARTPHONE USERS NEARS 25 MILLION AND 3G WIRELESS

BROADBAND SUBSCRIBERS SURPASSES 70 MILLION; BOTH TECHNOLOGIES DRAMATICALLY IMPROVE MOBILE WEB BROWSING

2007 66% OF ONLINE AMERICANS CLAIM TO HAVE MADE A PURCHASE ONLINE

2012 ECOMMERCE SALES TOP $1 TRILLION FOR

THE FIRST TIME IN HISTORY

2009BIGCOMMERCE LAUNCHED; COST TO BUILD FULL-SCALE ONLINE STORE = $25/MONTH

2014 ECOMMERCE SALES PREDICTED TO TOP $1.5 TRILLION

20 Years of Ecommerce


SMBs Own 21.5% of U.S. Retail Commerce

SMB

(<$15M)

# OF MERCHANTS BY SEGMENT ADJACENT MARKET SALES ($)

SOHO <$1M 422K

158K

35K

22k

SMALL $1M-$5M

MEDIUM $5M-$15M

ENTERPRISE $15M+

614K $961BTOTAL SMB

SOURCES: U.S. Census, 2013 National Small Business Association, Sagence, Inc. analysis.

$3.5T

$351B

$430B

$179B


$20.7 B

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

Ecommerce Is Fastest Growing Segment Within Retail

CAGR:

13.5%

$877.7 B

$71.2 B

CAGR: 2.5% $1.1 T

Q1 ‘05 Q1 ‘14

Retail Ecommerce Sales Total Retail Ecommerce Sales


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


Ecommerce Ripe for SMB Disruption;Many Enterprise Retailers Are Using Legacy Platforms

ENTERPRISE RETAILERS ENTERPRISE RETAILERS

SOURCE: 2013 Internet Retailer Top 500, 2014 Internet Retailer Second 500

• 43% of enterprise retailers are still web-only

• 58% of those retailers still use in-house commerce systems

• Of those web-only enterprise retailers with in-house commerce systems, more than half launched before 2000


There’s an App for That;SaaS Platform Ecosystem Enables SMB Disruption

2013 CLOUD USAGE AMONG SMBS COMMERCE ECOSYSTEM

SOURCE: Internet Retailer Top 500, Internet Retailer Second 500

• 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

DEMAND GENERATION

POS

API

oAUTH

$2M INTEGRATION

FUND

DEV PORTAL

DESIGN PARTNERS

APP STORE53%


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


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.



Report Sponsors

About BigcommerceBigcommerce 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.

http://www.bigcommerce.com

http://www.bigcommerce.com

http://sagenceconsulting.com/

Democratization of Ecommerce Report

Economy & Finance

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