With the increasing optimization of online services, many previously untapped markets are capitalizing on the potential of modern e-commerce. We take a look at three key trends that will characterize the nature of our online global economy in 2021.
Social Media Targeted Sales
Corporations such as Facebook, which also owns Instagram and the messaging app WhatsApp, have enormous amounts of data collected about our online activities, behaviors and spending habits. The re-sale of this information is the core of the business model that drives the majority of social networks as well as Google’s search services. This data can be used to identify potential demographics and audiences for a brand’s products and services, and drive discoverability of them with the user.
Brands, in partnership with influencers and internet personalities, are consistently looking for new ways to create engaging content that promotes the sale of featured products. Instagram now enables users to select paid-for-promotion items included in an image and process a sale of that item without ever having to leave the app. This has effectively turned the social media platform into an online catalogue. When surveyed over their shopping habits, 70% of young online consumers said they utilize Instagram as a way to discover and shop for new products.
Prioritizing Online Entertainment Sectors
Consumers have been consistently moving in the direction of on-demand, cloud and streaming services for their convenience and value proposition. By the end of 2027, the global market for video streaming is projected to be worth over $184 billion. Traditional broadcasters are increasingly struggling to match the investment capital of the likes of Netflix or Disney+.
The global gaming industry is another sector that is adapting to shifting demand. It reports a global revenue of over $227 billion, with $53.7 billion of that derived exclusively from online ventures. Online gaming has a predicted annual growth rate of 11.5% until 2027. This means that in the coming years, over a quarter of all global gaming revenue will be generated through online ventures. Organizations in the space are aware of this shift and investing heavily in bringing their products to this emergent audience. A new generation of gamers prefer the accessibility and informality involved in online versions of iconic casino games such as Roulette, with its 37 number wheel and table, favoring to play on-demand over the prospect of visiting physical venues. Analysts also point to the growth of internet infrastructure in previously difficult to reach markets and the increase in low-cost smartphones as crucial factors in this trend.
Growth of Centralized Marketplaces
As ever, convenience is the biggest indicator of consumer preferences. With respect to e-commerce, services that present the least friction at the consumer-end stand to benefit most from online business. 2021 will see this trend continue as large established platforms like Walmart and Amazon continue to dominate e-commerce transactions due to their centralizing projects, competitive pricing and highly efficient delivery infrastructure. In addition to these websites that fill the niche of department stores of the past, we will see specialized marketplaces that cater to specific interests grow in profile. Etsy, founded in 2005, is one such example. Focused on the sale of vintage goods and handcrafted items, the website hosts sellers from 234 countries. For a service charge these small businesses list products to over 40 million buyers seeking artisanal and bespoke goods.
Another area that has seen enormous growth is that of integrated sales within social networks. Facebook has 2.7 billion users globally, which makes its marketplace service the largest potential closed market on earth. While the service doesn’t operate as a traditional storefront, many professional resellers utilize the platform in much the same way as eBay or clothing app Depop to increase the discoverability of everything from vintage clothes to unique furniture, with Facebook deriving income from transaction fees. With platforms at such a vast scale they represent something more akin to a utility to the users who interact with them daily, and shopping is simply a natural outgrowth of these services being a center of internet traffic. This will naturally only increase in 2021.
