Dropshipping Market Analysis Report By Product, By Region And Segment Forecasts From 2019 To 2025

Industry Insights

The global dropshipping market size was accounted for USD 102.2 billion, in 2018. It is anticipated to ascend with a CAGR of 28.8% over the estimated duration. Factors such as growing inclination towards online shopping and the emerging trend of international e-commerce trade are predicted to fuel the market growth over the forecast duration. Dropshipping services include selling products via online retail where retailers do not keep any stock record. The retailer ships the customer order and all the shipment information were assigned to the wholesaler or manufacturer, who then delivers the order.

The advent of smartphones has created a new trend for online shopping with several mobile apps offering a better experience to customers. Increase smartphone usage along with rising per capita income is accelerating the market growth for dropshipping services. Increasing spending by leading players of e-commerce retail due to growing online shoppers is predicted to bode well for product demand over the estimated period. For example, as per the United Nations Conference on Trade and Deployment (UNCTAD), the online shoppers were 1,078 million in 2015 and increased to 1,342 million in 2017.

The market of Asia Pacific witnessed steady growth in the past many years, due to rising per capita income and inclination towards online shopping. This rise across various e-commerce platforms is further predicted to boost the dropshipping market in the upcoming years. As per the Ministry of Commerce & Industry, Government of India, the Indian e-commerce market was worth USD 38.5 billion in 2017 and is estimated to touch USD 200.0 billion by the end of 2026, ascending with a CAGR of 51.0%.

Conventional distribution channels demand retailers to make huge investments for stock management. However, with the growing preference for e-commerce, retailers are choosing dropshipping services to lower capital expenses for inventory management. Further, limited investment in logistics and inventory has resulted in a surge in demand for dropshipping in retailers.

Fraudulent transactions are predicted to restrain the growth of the market from 2019 to 2025. Online payment security is a crucial factor as dropshipping requires online payments. Dropshipping services need a well-established delivery infrastructure to prevent delays in deliveries or any damage to the order. Hence, intricacies in logistics and shipping could plunge the growth of the market in the upcoming years.

Product Insights

Based on product, the dropshipping market is segregated into DIY, fashion, toys, electronics & media, food & personal care, furniture & appliances, and hobby products. The electronic division occupied the largest share of more than 30% in 2018 due to the rising demand for electronics. E-commerce retail opens various opportunities for electronics sales as customers can easily compare an extensive offering of products, easy returns, and avail lucrative discounts.

The fashion category is predicted to foresee steady growth over the forecast years owing to increasing urbanization and evolving purchase patterns of customers. Increasing demand for branded products and the accessibility of various brands on one platform are also projected to fuel the growth of the segment from 2019 to 2025.

The food & personal care division is expected to ascend with a CAGR of over 30.0% from 2019 to 2025. Growing consumer investment in cosmetics, perfumes and other personal care items is expected to bode well for the segment growth in the upcoming years. Further, rising spending on domestic furniture has proliferated the preference for luxury furniture, thereby, bolstering the furniture & appliances segment over the estimated period.

Regional Insights

The Asia Pacific occupied over a 25.0% revenue share in 2018. The market growth is attributed to the rising number of e-commerce companies, which is propelling the demand for dropshipping services in the upcoming years. The expansion of online retail in the region is resulting in the growth of internet users. As per the Global System for Mobile Communications Association (GSMA), it is predicted to touch USD 3,900 million by the end of 2025. The Indian e-commerce market has foreseen substantial growth in the recent past, thereby, resulting in increasing startups in the nation. Dropshipping services assist these startups to concentrate on key marketing strategies along with lowering overall inventory costs. Dropshippers allow startups with limited capital to compete with leading players in the market. Thus, the benefits of dropshipping services used by e-commerce startups are proliferating the product demand in the upcoming years.

The North American market is anticipated to foresee considerable growth due to the evolving trend of online shopping and voice-driven virtual assistant. Moreover, benefits such as easy returns and the convenient ordering procedure are driving consumers for online shopping. As per UNCTAD, e-commerce sales in the U.S. were valued at USD 753.4 billion in 2017. Thus, sales driven by e-commerce are predicted to generate new prospects for dropshipping companies over the estimated duration.

Dropshipping Market Insights

The market is very competitive due to the operation of several organizations globally. The leading players of the market are Doba, Inc.; DropshipDirect; Oberlo; Onlinestorebiz.com LLC; SaleHoo Group Limited; Megagoods, Inc.; Sunrise Wholesale Merchandise, LLC; Doba, Inc.; MODALYST, INC.; and AliDropship. Companies are emphasizing M&A to increase their market presence and maintain their dominance. For example, in 2017, an e-commerce platform Shopify Inc. acquired Oberlo, a dropshipping service company. This takeover assisted Shopify to increase its market presence. Further, e-commerce players are developing their product portfolio to offer dropshipping services to wholesalers and manufacturers.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Million Insights has segmented the global dropshipping market report based on product and region:

• Product Outlook (Revenue, USD Billion, 2015 - 2025)
    • Toys, Hobby, & DIY
    • Furniture & Appliances
    • Food & Personal Care
    • Electronics & Media
    • Fashion

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)
    • North America
        • U.S.
        • Canada
    • Europe
        • U.K.
        • France
        • Germany
    • the Asia Pacific
        • China
        • India
        • Japan
    • Latin America
        • Brazil
        • Mexico
    • Middle East & Africa