Market Insight- Global Digital Commerce Platform Market
Digital commerce platform or also referred to as e-commerce platform is used for selling and buying of goods and services over mobile networks, internet, and commerce infrastructure. Digital commerce platform allows merchants to host and build a digital storefront related to a specific set of services or products. It involves ordering digital content for its immediate online consumption. A wide range of digital products can be sold through digital commerce platforms, which includes business to business (B2B) software namely Google G Suite and Microsoft Office 365, products developed for Salesforce.com, consumer apps, etc. Growing proliferation of new digital technologies and connected devices has increased the adoption of digital commerce platforms in the recent past.
The global digital commerce platform market is estimated to account for US$ 7,542.8 Mn in 2019 is expected to exhibit a CAGR of 15.1% during the forecast period
Market Dynamics- Drivers
- Increasing demand for digital commerce is expected to drive growth of the global digital commerce platform market during the forecast period
Increasing demand for digital commerce has prompted enterprises to invest in new digital business designs, in order to enhance customer experience. Companies are exploiting benefits of social media platforms, in order to gather more information about customers and serve them better by understanding the customer satisfiers and dissatisfiers. Digital commerce has transformed customer experience in terms of accessibility and visibility. Moreover, organizations are transforming internal processes such as ERP which has transformed the way organizations were handling various transactional, supply chain and financial processes. Increasing number of smartphones, tablets, and broadband connections is expected to support growth of the global digital commerce platform market in the near future. For instance, according to the GSM association in 2015, it is estimated that there are approximately 2 billion smartphone users in the market. In emerging countries such as India online sales are primarily driven by the growing adoption of a portable device.
- Steadily increasing demand for cloud services is expected to propel the global digital commerce platform market growth over the forecast period
Over the years, cloud computing evolved immensely, which now brings significant savings by lowering the opportunity cost of in-operation technology. As a result of this, a vast number of vendors have started to offer cloud services to customers. In recent years, industries like e-mail marketing service providers (iContact, Mailchimp), CRM (salesforce.com), support (Zendesk) and customer engagement (Hybris, Marketo) have almost completely moved to the cloud as large businesses are profiting from this trend. Furthermore, cloud services have emerged as a leading technology with the development of hybrid cloud. Hybrid cloud is a cloud computing environment that is a mix of private cloud, on premise, and public cloud services. Therefore, increasing demand for cloud services is expected to drive the market growth over the forecast period.
Asia-Pacific region of the the digital commerce platform market in 2019, accounting for 16.7 % share in terms of value.
Source: Coherent Market Insights
Market Dynamics- Restraints
- Lack of digital market skills and nascent stage of industry are expected to hinder the global digital commerce platform market
Since the industry is quite new, many retailers lack digital marketing skills and thus, lag behind in the competition. On average, about 60% of the marketer’s working time is spent on managing digital activities due to which retailers need to acquire those skills to be competitive. Moreover, the unavailability market governance structure is expected to restrain growth of the global digital commerce platform market during the forecast period. For instance, lack of a uniform tax structure in many developing countries including India leads to issues such as double taxation or obstructions in the free flow of goods inside the country.
- Concerns associated with safety and security data are expected to hamper the global digital commerce platform market growth over the forecast period
Nature of online transactions limited by instability due to insecure transactions, insecurity, and trust. There are policies at work, which will incorporate technical and legal standards for security and data protection. Furthermore, a significant increase in spyware intrusions, compromising of personal data and phishing attacks might result in internet users restraining their online commerce activities. Thus, these factors are expected to hamper the market growth in the near future.
- Growing demand for universal purchasing platform to present lucrative growth opportunities
There is a constant demand for a unified platform where consumers can search, buy, share experiences and be rewarded. The digital commerce platform fulfills all those requirements of the consumer. Furthermore, digital technologies are focused on bridging the existing gaps in the consumer’s purchase journey. These technologies provide consumers a seamless shopping experience they are looking for. With the flexibility to choose delivery from various offline and online commerce routes and to make the ultimate purchase, consumers are finding the purchase process simplified. It is attracting new consumers to online shopping portals.
- Increasing focus on customer experience management to pose major growth opportunities
The touch points are where customers get in contact with the seller, which directly or indirectly contributes to customer experience. From customer’s point of view, the buying experience is equally crucial as contact points after the purchase. Conventional ways of working B2B sales results in sales force inefficiency and incompetent levels of customer satisfaction. Business to consumer (B2C) organizations also need to modify its customer experience to meet evolving buying preferences of customers. Customer experience plays key role in the development of an organization. For instance, an airline company has come up with an amazing technology where potential customers can view the business class through a 360-degree video. Moreover, virtual reality can enrich the customer experience of children. For instance, Swedish branches of McDonald's ran a pilot project with a happy meal which can be built into cardboard VR glasses called Happy Goggles.
Source: Coherent Market Insights
- Digital commerce personalization tool
Currently, majority of organizations are laying emphasis on customer satisfaction, which is about fulfilling and creating new and individualized experiences. There are three major strategic trends that describe the current digital customer, self-service, co-creation, and personalization. Considering these trends, Infosys digital commerce offers end-to-end capabilities that disintermediate channels, warehousing, inventory, merchandising and transaction processing. Furthermore, Episerver’s intelligent personalization platform offers a full suite of digital commerce personalization tools which includes automatic behavioral alerts, product recommendations for email & web, behavioral ranking and actions that increase conversions and average order value.
- Integration of digital commerce platform with other technologies
An integrated digital platform interacts with other related systems such as enterprise resource planning (ERP), logistics and order fulfillment systems. This platform was created to cater to all the requirements in one platform. Furthermore, functionalities such as newsletters and marketing strategies were considered to be outside the purview of the platform. However, integrating it with other technologies has incorporated these systems into the digital commerce platforms. For instance, Elastic Path’s digital commerce platforms are often used for enterprise-wide capabilities and provide various fulfillment, licensing inventory, and post-transaction support. Elastic Path commerce integration platforms are also used to generate unified business APIs that power these applications in real-time.
In global digital commerce platform market, by deployment model segment, On-premises sub segment dominated the global market in 2019, accounting for 67.1% share in terms of value
Source: Coherent Market Insights
Key players operating in the global digital commerce platform market are Magento, Inc., Elastic Path Software Inc., IBM Corporation, NetSuite Inc., Oracle Corporation, Apttus Corporation, Adobe, Inc., Hybris AG, CloudCraze Software LLC, Demandware, Inc., Salesforce.com, Inc., and Digital River, Inc.
- Key players operating in the market are focused on mergers and acquisitions, in order to gain a competitive edge in the market. For instance, in June 2018, Adobe, Inc., a U.S.-based software company, acquired Magneto Commerce, a U.S.-based commerce platform to integrate Magneto Commerce Cloud with Adobe Experience Cloud for end-to-end digital platform experience.
- Major companies in the market are involved in product launches, in order to enhance the product portfolio. For instance, in January 2019, Elastic Path Software Inc. launched Commerce Cloud, a software-as-a-service version of its B2B and B2C e-commerce software.