Dropshipping Market Size and Share Analysis

 You might be familiar with the definition of dropshipping. It is a business model where the seller will accept the customers' orders but will not keep the goods in stock. This seller will send the orders (with the shipping information) to the manufacturer, wholesaler, or retailer. The goods will then be shipped directly to the customers. You do not have to worry about the storing, packing, or shipping the merchandise/goods.

The dropshipping market has seen and will see a significant growth because of the increase in online shopping during the pandemic. A development in cross-border ecommerce trade is another reason for the growth of the dropshipping market. An increase in the usage of smartphones and also the growth in consumer disposable income have also contributed to the massive expansion of the ecommerce market. This growth, in turn, has led to a huge demand for dropshipping services.

Many retailers are now choosing the dropshipping business model so that there won't be much capital expenditure for buying and managing inventory. 

The dropshipping market size value in the past year, 2020, was USD 149.4 billion. The forecast for the year 2025 is USD 557.9 billion. Here, the forecast period is considered to be 2019-2025. These statistics indicate a CAGR (Compound Annual Growth Rate) of 28.8% from 2019 to 2025.

The electronics sector has accounted for a market share that exceeded 22% in the year 2018. This scenario has been caused by a lot of innovations in the electronics industry. Added to that, the rise in demand for electronic goods has also contributed to the high market share value. The Food and Personal Care sector will witness a CAGR surpassing 30% from 2019 to 2025. And, the reason for this rise in CAGR is the increasing demand for cosmetics and skincare products. 

Owing to the changes in consumer spending behavior, the Fashion industry is foreseen to undergo favorable growth.

The dropshipping market is currently fragmented. It includes many small and medium-sized businesses. However, the "global players" in this market are the following:

Ø AliDropship

Ø Doba

Ø SaleHoo Group Limited

Ø Oberlo

Ø Shopify

Based on regions, the fastest growing dropshipping market is now the Asia Pacific, with North America being another mammoth market.

In whichever angle you see it, dropshipping is still a Herculean task. The dropshippers will have to do a lot of business with their wholesale suppliers and do order processing. They would have to deal with returns and perform other related tasks. Therefore, the business person's perspective and attitude will go a long way in maintaining and managing the business.

We have now discussed the dropshipping market size and share analysis in detail.