[Research Report] The dropshipping market was valued at US$ 162.44 billion in 2019 and is expected to grow at a CAGR of 18.3% during the forecast period to reach US$ 591.77 billion by 2027.
The e-commerce sector offers a huge platform for shopping, which is increasing at an unprecedented rate across the world. Nowadays, consumers prefer online shopping, as a considerable number of websites are available to choose products from. Moreover, e-commerce platforms also help numerous businesses reach easily to customers, and hence necessary exposure to business is achieved. The sector is propelled by a growing emphasis on online marketing tools, including Google ads and Facebook ads. E-commerce is one of the mature industries in the US, where consumers are highly inclined toward online shopping. According to the Census Bureau of the Department of Commerce, US retail e-commerce sales were US$ 160.3 billion for the first quarter of 2020, an increase of 2.4% from the fourth quarter of 2019. The industry is also popular amongst consumers of all ages in developing countries of APAC, such as India and China. Thus, rising e-commerce industries in North America and APAC are flourishing in the business for dropshipping. Dropshipping is a profitable business model for e-commerce companies that do not need much capital to start with. According to the 2018 State of the Merchant eCommerce Report, out of 450 online stores, ~16.4% are using dropshipping and it is likely to surge in the coming years. The growing popularity of leading dropshipping stores, such as Home Depot and Macy’s, have adopted this business model to broaden their online reach.
The growing e-commerce industry offers several opportunities for selling various quality products such as electronics, food, and personal care and appliances since customers can compare a broad product portfolio, get discounts, and request easy returns. Various e-commerce platforms are acquiring dropshipping service providers to extend their presence in dropshipping business. For instance, Shopify, Inc., an e-commerce company, has acquired Oberlo, a dropshipping service provider. The acquisition allowed Shopify to enhance its position in the dropshipping market. Further, the various e-commerce businesses are expanding their product portfolio in order to offer dropshipping services to wholesalers. Thus, growth of e-commerce industry is boosting the demand for dropshipping.
Impact of COVID-19 Pandemic on Dropshipping Market
The COVID-19 outbreak has had an adverse impact on the dropshipping market in the North American region. Manufacturers, suppliers, and logistics companies are experiencing disruptions to their operations, which is delaying the products' deliveries. The continuously spreading virus-infected patients in the US has restricted numerous logistics companies to operate normally. The US accounts for the highest number of dropshipping market players in the region, and slower than usual growth during COVID-19 crisis is reflecting downfall in the dropshipping market valuation in 2020.
Lucrative Regions for Dropshipping Market
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
Market Insights
Surging Growth Opportunities in APAC
Demand for dropshipping business model is increasing immensely in various APAC countries, such as India and China. It is one of the cost-effective models for entrepreneurs to start an e-commerce business. It enables an entrepreneur to sell products online without having to carry inventory. E-commerce sales in APAC countries are growing at a rapid pace making it one of the largest industries. For instance, as per IBEF, in 2017, e-commerce sales grew at an annual rate of 51%, making it the biggest opportunity for online retailers.
Additionally, as per China Internet Information Center, China's online retail sales surpassed US$ 1.29 trillion in 2018. Several smart products such as smart speakers and smartwatches are favored by consumers of this region, with sales upsurge of ~80% year-on-year. Sales of cosmetics and furniture also achieved swift growth in China.
In India, wholesale might cost businesses more money via the cost of goods and shipping charges. The shipping cost is high since individual entrepreneurs do not have access to government deals. However, dropshipping enables businesses to automate their business in order to focus on tasks that produce revenue. It also saves the cost of goods. With dropshipping, shipping goods can cost less and can sometimes even be free. The platform enables dropshippers in India to sell their products across the globe to grow their businesses quickly. Thus, the growing demand for dropshipping services offers an opportunity for various entrepreneurs in Asian countries to start their business with fewer capital investments in inventory.
Product Type Market Insights
Due to the growing penetration of e-commerce platforms, various retailers are opting for dropshipping services in order to reduce capital costs of inventory purchases. The rising demand for numerous products, such as electronics and fashion, opens up several avenues for dropshipping in retailers. Less overhead costs and broad product portfolio are some of the factors projected to fuel market growth. Based on product type, the dropshipping market is segmented into toys, hobby and DIY, furniture and appliances, food and personal care, electronics and media, fashion, and others.
Dropshipping Market, by Product Type– 2019 and 2027
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
Organization Size Market Insight
The dropshipping market is segmented into small and medium enterprises and large enterprises based on the organization size. Dropshipping helps businesses of all sizes cut costs based on warehouse rent, insurance, inventory, and other expenses. It also enables to reach customers irrespective of geography without the requirement to build brick and mortar stores.
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Dropshipping Market: Strategic Insights
Market Size Value in US$ 162.44 Billion in 2019 Market Size Value by US$ 591.77 Billion by 2027 Growth rate CAGR of 18.3% from 2020-2027 Forecast Period 2020-2027 Base Year 2020
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Customize Research To Suit Your Requirement
We can optimize and tailor the analysis and scope which is unmet through our standard offerings. This flexibility will help you gain the exact information needed for your business planning and decision making.
Dropshipping Market: Strategic Insights
| Market Size Value in | US$ 162.44 Billion in 2019 |
| Market Size Value by | US$ 591.77 Billion by 2027 |
| Growth rate | CAGR of 18.3% from 2020-2027 |
| Forecast Period | 2020-2027 |
| Base Year | 2020 |
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The players operating in the enterprise content management market focus on strategies such as mergers, acquisitions, and market initiatives to maintain their positions in the market. A few developments by key players are listed below:
- In August 2020, Inventory Source announced new dropship suppliers for the month of August including HomeSnob, UFM Men’s Underwear, Direct Dropship UK, U Suck, ALLNET, RakADX, and ZFI Inc.
- In March 2020, Alidropship.com introduced Sellika, a new plugin for WordPress that automates product information editing.
Global Dropshipping Segments:
Dropshipping Market – By Product Type
- Toys, Hobby and DIY
- Furniture and Appliances
- Food and Personal Care
- Electronics and Media
- Fashion
- Others
Dropshipping Market – By Organization Size
- Small and Medium-Size Enterprises
- Large Enterprises
Dropshipping Market – By Geography
- North America
- U.S.
- Canada
- Mexico
- Europe
- France
- Germany
- Italy
- Spain
- UK
- Rest of Europe
- Asia Pacific (APAC)
- Australia
- China
- India
- Japan
- Rest of APAC
- Middle East & Africa (MEA)
- Saudi Arabia
- UAE
- South Africa
- Rest of MEA
- South America (SAM)
- Brazil
- Rest of SAM
Companies
- alidropship.com.
- Doba Inc.
- DropshipZone
- Inventory Source
- Megagoods, Inc.
- MODALYST, INC.
- Orderhive
- Printify, Inc.
- SaleHoo Group Limited
- Sunrise Wholesale Merchandise LLC
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Product Type , Organization Size , and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, United Arab Emirates, United Kingdom, United States
Frequently Asked Questions
APAC led the global dropshipping market in 2019. APAC comprises prime nations such as China, India, Japan, South Korea, and Australia. India and China are the fastest-growing e-commerce markets in APAC. With the rising internet penetration, consumers in these countries are inclined toward online shopping, which, in turn is transforming several areas of e-commerce in the region. With the right technology, it is easy to facilitate online shopping and delivery to the customers, even in rural areas. Thus, these factors are propelling the growth of the dropshopping market in APAC.
The dropshipping market is likely to experience substantial growth rate owing to a surge in online shopping and the growing trend of cross-border e-commerce trade. Thus, the demand for dropshipping services is principally influenced by the growth of the e-commerce platforms. The rising penetration of smartphones and rising disposable income in emerging markets are also driving the demand for dropshipping services.
The electronics and media segment is the leading product type in the market. Consumer electronics comprises all electronics, such as televisions and DVD players, and communications devices, such as smartphones and laptops. Dropshipping of electronics and media is gaining huge popularity; several dropshippers of electronics and media have capitalized on the ready market of electronic consumers in order to profit themselves. In recent times, a huge growth in the number of wholesale electronics dropshippers has been observed, owing to the less weight of consumer electronics; also, they can reasonably ship to consumers.
The List of Companies - Dropshipping Market
- alidropship.com
- Doba Inc.
- DropshipZone
- Inventory Source
- Megagoods, Inc.
- MODALYST, INC.
- Orderhive
- Printify, Inc.
- SaleHoo Group Limited
- Sunrise Wholesale Merchandise LLC
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
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- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
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Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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