Online shopping used to be unique, even though it is now rather common. The first online transaction happened in 1994 when a guy used his website, NetMarket, the pioneering online retail platform, to sell a Sting CD to a friend. ecommerce companies
Since then, the breadth of ecommerce companies and business models has increased dramatically, completely altering the world of retail. In 2022, $5 trillion in global ecommerce sales are anticipated, and $6 trillion by 2024. More than 13% of all sales in the US are made through ecommerce.
What is Ecommerce?
The term “electronic commerce“, or “ecommerce“, refers to a business strategy where products and services are purchased and sold online.
It also relates to the data and money transfers that enable these activities. Although many consumers primarily identify ecommerce with products, it refers to any business dealings made possible by the internet, like purchasing a sweater from a New Zealand manufacturer or hiring a handyman through Craigslist.
Ecommerce has increased as a result of the expansion of traditional brick-and-mortar stores like Target and Best Buy as well as globally recognized online marketplaces with a digitally native business model, such as Amazon and Alibaba. While the operational aspects of each of these merchants are comparable in terms of the fundamentals of ecommerce, they have also carved out their distinct niches in the ecommerce market by concentrating their product lines or creating distinctive fulfillment techniques.
10 Top Ecommerce Companies
Amazon is a US multinational technology company with an emphasis on ecommerce, cloud computing, online streaming, and artificial intelligence. Along with Alphabet, Apple, Meta, and Microsoft, it is regarded as one of the “Big Five” American technological companies. It is also one of the biggest ecommerce companies globally. Jeff Bezos established the business in 1994 in Bellevue, Washington, first as an online bookstore. Since then, it has grown to provide a wide variety of products, gaining the nickname “The Everything Store”.
Amazon not only sells products directly but also serves as a platform for third-party sellers to sell their products, with third parties accounting for 60% of sales on Amazon. There is no distinction between a product sold by Amazon and one offered by a third party from the standpoint of the customer. From the standpoint of the vendor, the sales can either be Fulfilled by Amazon (FBA), in which case Amazon stores and ships the products, or they can be Fulfilled by Merchant (FBM), in which case the third-party vendor stores and ships the products; however, they must follow Amazon's shipping and packaging standards.
San Jose, California-based eBay is a global US ecommerce company. One of the few notable survivors of the dot-com bubble—a stock market catastrophe brought on by extreme over-speculation of internet firms in the late 1990s—eBay was founded by Pierre Omidyar as an online auction site in 1995. Today, eBay is a multibillion-dollar ecommerce company that supports both traditional priced-as-is sales and best-offer transactions between consumers. Buyers can access the website for free, but sellers must pay a fee to post products. In comparison to the $8.9 billion recorded for the preceding year, eBay's yearly net revenue in March 2022 was nearly $10 billion. About 109 million people visit the website on average each month.
Shopify is a global Canadian ecommerce business with headquarters in Ottawa, Ontario. It provides a unique digital commerce platform that enables small companies to participate in online sales and sell their products through point-of-sale systems and online storefronts. It was established in 2006 by Tobias Lütke and Scott Lake who were unsatisfied with the e-commerce products that were at the time on the market and decided to develop an online store for the Snowdevil brand of winter sports equipment. The online store for Snowdevil was created by Lütke, a computer programmer, using an open-source web application framework.
Later, in 2010, Shopify created a mobile app to expand this foundation to more shops. Since then, the business has made a name for itself as one of Canada's fastest-growing e-commerce businesses and a world authority in e-commerce logistics. It provides proprietors of small businesses with the best e-commerce digital storefront architecture, a back end that is skillfully designed and structured, and seamless logistical operations integration. The total revenue for 2021 was $4.611 billion in US dollars, and Shopify-powered ecommerce websites now see an average of 1.16 billion unique visits per month.
A US e-commerce site called Etsy specializes in selling handmade and antique products such as jewelry, apparel, home decor, furniture, craft materials, and equipment. By providing small business owners with individual, online storefronts where they may display their products for costs of $0.20 per item, the website carries on the tradition of actual craft fairs. In February 2022, Etsy reported revenue of over 464 million, up from $12.2 billion in 2021.
Craigslist is a US classified ad website offering sections for employment, housing, items for sale, gig services, discussion forums, and more. It is comparable to the classified ads seen in the back of newspapers. The company was founded in 1995 as an email Listserv for friends that focused on events in the San Francisco Bay Area by list, Craig Newmark. In 1996, the Listserv evolved into a website, which later included more advertising and commerce categories. Metropolitan regions in 70 different nations are currently covered. As of 2021, Craigslist has over 300 million monthly visitors and earned an estimated $660 million in income.
A US global technology business with headquarters in Menlo Park, California is called Meta Platforms; it was formerly known as Facebook. Being the parent firm of WhatsApp, Instagram, and Facebook may be the corporation's claim to fame. It also runs Instagram's ecommerce feature, which enables users to click through Instagram posts to buy featured products, as well as Facebook Marketplace, which works similarly to Craigslist in terms of enabling consumer-to-consumer sales and gig services. With an estimated 1.79 million active users on Facebook Marketplace and around one billion active users on Instagram, Meta produced an estimated $117.93 billion in revenue for 2021.
Known as a “supercenter,” or big-box retailer, Walmart is a US multinational corporation that also runs a sizable ecommerce website by the same name. Since the 1960s, the firm has been known as the top low-price mega-retailer in the US, and it is now one of the biggest retail conglomerates in the world. It has locations in all 50 US states and is widely known (both physically and virtually) in both Canada and Mexico. By using existing stores as warehouses for online orders, it has taken advantage of its existing brick-and-mortar footprint to create a successful ecommerce model. Through Walmart.com, customers can purchase items directly off the shelf of a Walmart store rather than a single warehouse located hundreds or thousands of miles away, Walmart generated around $582.8 billion in sales in 2021, and Walmart.com receives roughly 100 million unique visits each month.
The second-largest big-box retailer in the US is called Target, and it is a department store. In addition to running more than 1,800 physical locations around the nation, this company also has a strong online presence. Target offers a similar selection of consumer goods to Walmart, including food, electronics, clothing, and home furnishings. Like Walmart, Target also employs its physical locations as alternative warehousing for nationwide shipping of online orders. Target received more than 192 million visits per month in 2021 and generated over $106 billion in revenue.
A US international retailer of consumer electronics, BestBuy is located in Minnesota. It was first established in 1966 as a stereo shop called Sound of Music by Richard M. Schulze and James Wheeler. In 1983, it changed its name to reflect the fact that it now sells a larger variety of electronics. Through its website, BestBuy.com, BestBuy has a substantial ecommerce business in addition to its physical retail locations. In 2021, BestBuy's domestic U.S. revenue was roughly $43.3 billion, or nearly 90% of its total sales. The website receives roughly 48.4 million visitors every month.
A Chinese global technology business called Alibaba Group Holding Limited provides ecommerce, internet services, and technical development services. The company, which was established in Hangzhou in 1999, offers product search engines and services for consumer-to-consumer, business-to-business, and consumer-to-business sales. It is sometimes seen as China's response to Amazon, a one-stop online store with a wide selection of products. However, it goes beyond that comparison by providing a wide selection of wholesale products for people and companies to buy and resell. About $109 billion, or 52% more than in 2020, was Alibaba's revenue for the year 2021. 421.1 million people visit AliExpress, its US-focused website, every month on average.
Although the development of large ecommerce companies like Amazon and Alibaba has changed the ecommerce scene, there is still plenty of room for small businesses to take advantage of the model and establish themselves. Here are some questions to think about whether you're planning to add ecommerce capabilities to your small business or launch a brand-new digitally native ecommerce venture:
- Do you possess the tools necessary to create a website (either on your own or with the help of a web developer)?
- Can an existing website be used as is to create an e-commerce division, or will it need to be redesigned?
- What ecommerce platforms are ideal for your type of business—are you a business-to-business or a business-to-consumer operation, for example?
- What traffic targets would your e-commerce division need to achieve to justify the investment?