Global Ecommerce Revenue to Grow 19% in 2011, predicted JP Morgan
Nothing But Net: 2011 Internet Investment Guide
According to the annual New Year report by JP Morgan senior analyst Imran Khan, global ecommerce revenue will grow nearly 19 percent in 2011 to the tune of $680 billion. In the US alone, Internet sales are expected to grow 13.2 percent to $187 billion.
And the snowball is rolling fast. By 2013, JP Morgan analysts predict ecommerce revenue will hit a staggering $963 billion.
Naturally, those shopping online are doing so in increasing numbers, with 38 percent of shoppers buying items or services online at least once a month. Those who don’t shop online declined to 12 percent in 2010 from the 20 percent that reported never shopping online in 2007. Higher end consumers are most often likely to shop online, with 34 percent of those who make more than $100,000 or more shopping at least three times per month.
However, ecommerce rates are growing significantly slower than online advertising space. While stats as of 2009 estimate that ecommerce sales represent 3.9 percent of US retail, online advertising comprises 13.7 percent of all advertising in the US.
The future blooms bright for ecommerce, as does finding a parking space in the mall next Christmas season. Why brave stressed out crowds when Google is just a keyboard or app away?
China Online Advertising 2010 Report
Below are the China E-marketing 2010 Report by J.P. Morgan in the “Nothing But Net – 2010 Internet Investment Guide” Report released on January 2010.
The online ad market still only accounts for a small portion of China’s overall ad market (still around 10%). We forecast the online ad market to witness 35% Y/Y growth in 2010, to reach Rmb19.3B (US$2.8B) and 34% Y/Y growth in 2011 to
reach Rmb25.8B (US$3.8B).
China Online Advertising Market Forecast from 2005 to 2011. Source: J.P. Morgan
Search Ad Likely to Grow Faster than Brand Ad.
We expect search advertising to see stronger growth in 2010 than brand advertising. From a top-down perspective, search ad is still ~50% of the total online ad market in China. This compares with 67% in the US. As such, we still see room to grow.
From a bottom-up perspective, we expect: 1) higher adoption of pay-for-performance advertising, 2) search usage to increase with the growing eCommerce market, and 3) use of search ads as a brand advertising tool.
China Online payment Statistics 2010
As of June 2010, the utilization rate of online payment in China is 30.5% and the number of users is 128.1 million, with an increase of 36.2% in the half year. It remains the web application with the fastest growth of users.
China Online payment Statistics 2010. Source: The 26th Statistical Report on Internet Development in China
The reasons for rapid growth of online payment mainly include: firstly, web shopping rapidly increase and promotes the fast growth of online payment. Secondly, the support scope of online payment becomes extensive. In variety, more and more enterprises opened the services of online payment of water, electricity and gas fees, etc. In area, not only first tier cities but a large number of second/third tier cities expand their online payment methods. Thirdly, the online applications between enterprises become more extensive. The much deeper extent of enterprise informization and upgrading of hardware and software facilities all speeds up the upgrading of enterprise information flow; the capital flowing between more and more enterprises tend to be conducted by way of online payment.
China Web shopping Statistics 2010
Until June 2010, the number of web shopping users has reached 142 million; the utilization rate has been raised to 33.8%, by 5.7%, and the increase rate of users in the half year has reached 31.4%.
China Web shopping Statistics 2010. Source: CNNIC Report July 2010
The quicker growth of web shopping users has shown a strong development trend of e-commerce market in China. As the application of e-commerce of small and medium enterprises tends to be normal, the retail sales business of network become routine and the subject of web shopping market increasingly gets stronger. Meanwhile, in the first half year of 2010, some new styles and opportunities have emerged in the web shopping market. Firstly, the rise of bulk purchase model takes on a development trend of regional e-commerce services; secondly, shopping websites shift towards mobile platform and mobile e-commerce is closely arranged; thirdly, B2C develops towards mainstream and web shopping pays more attention to user experience and safety guarantee, etc.; fourthly, web shopping sites speed up their pace of self-constructing logistics or providing of logistics through cooperation and actively enhance the service foundation under the line.
In addition, as the fight for free transportation expenses is started again, web shopping is increasing its speed to penetrate towards the social public through media publicity and promotion activities.