Dropshipping Market

The global Dropshipping Market was valued at USD 221.3 Billion in 2022 and is projected to reach a value of USD 931.9 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 22.8% between 2023 and 2030.

Premium Insights

Dropshipping is a retail fulfillment strategy where a store doesn't maintain an inventory of its goods. Instead, it purchases from a third party and arranges for the item to be delivered to the customer. As a result, the seller is relieved of direct product management. Dropshipping and the traditional retail model differ most because the selling merchant does not stock or own inventory. Instead, to fill orders, the seller buys inventory as needed from a third party—typically a wholesaler or manufacturer. Online selling became possible for people in the 2000s because of sites like Amazon and eBay. Dropshipping is permitted on both Amazon and eBay. However, they charge Dropshipping fees. For instance, Amazon takes anywhere from 10% to 15% of your revenue. However, Amazon gives you access to over 300 million active users with high purchase intent.

With the help of numerous mobile applications, smartphones have completely changed how consumers shop online. The demand for Dropshipping services is rising due to the expanding use of smartphones and consumers' rising disposable income. Due to the rise in consumers favoring online shopping platforms, major players in the e-commerce industry have increased their investments noticeably.

Additionally, Dropshipping has been growing significantly due to how inexpensive it is to set up and maintain a business. As a result, many businesses are heavily reliant on Dropshipping services. This is primarily because it facilitates better customer cost-saving options and enhances business operations. Therefore, multinational corporations are eager to incorporate such services and play a crucial role in altering the Dropshipping market dynamics over the forecast period.

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Economic Insights

E-commerce and Dropshipping companies are particularly susceptible to economic downturns. These business models frequently have a harder time surviving a recession. Moreover, Ukraine was invaded by Russia. Since the start of the Russia-Ukraine conflict, the world economy and trade have undoubtedly experienced a tremendous shock. Given that these two nations are significant exporters, this conflict will have immediate and long-term effects on Dropshipping businesses and product shipping costs. Even if the conflict ends quickly, lifting sanctions may take longer due to factors such as increased global crude oil prices, modification of China-European routes, and the lack of available shipping capacity. And detour options time indicates that product shipping costs will increase shortly. The world will inevitably experience an energy shortage. Tax increases will result from changes in supply and demand, raising the cost of the materials used in factories and reducing costs and output.

Top Market Trends

1. Growing e-commerce Industry: The e-commerce sector is expanding quickly in the current environment due to the growing use of the internet. With the aid of the internet, people can buy and sell almost anything, including books, electronics, clothing, software, and furniture. For instance, the retail sales share of the global e-commerce sector increased significantly from 16% to 19% in 2020, according to the United Nations Conference on Trade and Development (UNCTAD), in May 2022. Similarly, the IBEF (India Brand Equity Foundation) organization projects that India's e-commerce will grow by 27% from 2019 to 2024, reaching $99 billion, with food and apparel likely to be major products.

2. Increasing Demand for Faster Delivery: The demand for better and more effective product delivery services has grown due to the rise of online shopping and consumers' propensity to purchase goods from online retailers. The COVID-19 pandemic has increased customers' preference for ordering daily necessities online, which has aided in the growth of the Dropshipping industry.

3. Consumer Inclination Towards Online Shopping: Due to the high levels of convenience that online shopping platforms provide, the rising use of smartphones and tablets, and the increasing global internet adoption, consumers have demonstrated a greater propensity for online shopping over the past few years. For instance, in 2022, there will be approximately 5,473 million internet users worldwide, with internet penetration estimated to be around 69%.

4. Rise in E-Commerce Platforms: Since consumers can compare a wide range of products, get discounts, and take advantage of easy returns, the growth of e-commerce platforms opens up several opportunities for selling electronic goods, which helps the Dropshipping industry.

5. Growing Smartphone Penetration: Smartphones are the most common electronic devices today. According to the most recent data on smartphone users, smartphones are the most widely used of all the devices currently in use, being used by 95.8% of all internet users. According to the most recent statistics, smartphone consumers are growing annually. Global smartphone usage is anticipated to reach 6.8 billion users in 2023, a rise of 4.2% annually. Additionally, there are 3.2 billion more smartphone users today than in 2016, just seven years ago, an increase of 86.5%.

Market Segmentation

The global Dropshipping market can be categorized into Destination, Product, and Region. Based on the Destination, the market can be categorized into Domestic and International. In addition, based on Product, the market can be further fragmented into Electronics, Fashion, Toys, Hobby, DIY, Furniture, Beauty, Health, Personal, and Household Care. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Destination

Domestic Destination to Lead with the Largest Market Share Owing to Growing E-Commerce Sector

The domestic segment will dominate the Dropshipping market during the forecast period. This is because domestic Dropshipping uses the internet to conduct cross-border transactions. These exchanges involve selling or purchasing goods and services that are later provided to the appropriate customers.

Based on Product

Electronics Segment to Account for the Largest Market Share Due to Growing Demand for Electronics

During the forecast period, the electronics segment will dominate the global Dropshipping market. Electronic devices are a highly permeated product among various technical consumer goods in homes. Televisions with larger screens are becoming more popular on the one hand, while electrical components are becoming smaller on the other. Due to rising consumer demand, businesses are creating high-performing and user-friendly devices. The ability for customers to compare a wide range of products, take advantage of discounts, and submit an easy return request makes E-commerce platforms a valuable resource for the sale of electronic goods.

Based on Region

Asia Pacific to Lead Global Sales Owing to Increasing Demand for Various Products

The global Dropshipping market is expected to be dominated by the region of Asia Pacific during the forecast period. Because of the explosion in online purchasing platforms, Asia Pacific's e-commerce market is expanding at an unheard-of rate. The demand for online purchasing has also increased as smart devices like laptops, smartphones, and tablets become increasingly popular. This region's growth is also primarily attributable to improvements in telecommunications infrastructure, the proliferation of smartphones and the internet, and the widespread use of social media sites like Instagram, Facebook, Snapchat, and Twitter. Additionally, the growth of smartphone and social media usage in countries like China is a major factor in developing regional markets. Over the past few years, Chinese consumer behavior has steadily moved from offline to online. Due to the widespread use of mobile devices, mobile app revenue has significantly increased. In Asia, mobile gadgets have become more widespread in recent years. The APAC area accounted for 53.4% of all smartphone users worldwide in 2018.

North America is currently the second-largest social commerce market. The adoption of artificial intelligence for Dropshipping operations is expected to drive the market in North America. Online businesses have automated some of their customer interactions using artificial intelligence. Automation of the e-commerce process has been feasible for a while, but as artificial intelligence advances, it is anticipated to become more pervasive and customized. The Dropshipping industry can now increase lead generation rates without sacrificing lead quality, owing to advancements in artificial intelligence. In contrast to developing nations, the U.S.'s e-commerce and social commerce landscapes are much more fragmented. There are differences in customer attitudes and behavior toward online payments, social media use, and online privacy.

Competitive Landscape

The key players in the global Dropshipping market include - Alidropship (U.S.), Doba Inc. (U.S.), Inventory Source (U.S.), Megagoods Inc. (U.S.), Modalyst Inc. (U.S.), SaleHoo Group Limited (New Zealand), Shopify Inc. (Canada), Sunrise Wholesale Merchandise LLC (U.S.), Printify (U.S.), Cin7 Orderhive Inc. (U.S.), Wholesale2b (U.S.) among others.

Recent Market Developments

· February 2022: Alibaba.com and Dropified partnered for improved Dropshipping services. Through this partnership, drop shippers can connect Dropified and Alibaba.com, their online storefronts, so that fulfillment businesses are alerted when an order has been made and needs to be filled.

· December 2022: The e-commerce startup Flash revealed that the company had raised USD 5.8 million (roughly Rs 47.17 crore) from renowned angel investors and international investors.

· December 2022: Trendsetting Boohoo, a UK-based apparel brand, entered the Indian market through Myntra. As part of the debut, Boohoo, Dorothy Perkins (DP), and Nasty Gal will give over 1,500 on-trend styles across categories like dresses, tops, bottoms, and footwear. On Myntra, a specific Online Brand Store (OBS) will contain the three brands.

· April 2021: India's top domestic e-commerce site, Flipkart, and the Adani Group, the country's largest foreign infrastructure company, have announced a strategic and business partnership. Adani Logistics, a fully owned subsidiary of Adani Ports & Special Economic Zone, will collaborate with Flipkart in this two-way partnership to strengthen Flipkart's supply chain infrastructure and further improve its capacity to serve its rapidly expanding customer base.

Segmentation of the Global Dropshipping Market