The global dropshipping market was valued at USD 140.24 billion in 2020 and is expected to grow at a CAGR of 28.5% during the forecast period. The growth of this dropshipping industry is driven by the continuous increase in preference for online shopping, coupled with the rapid surge in the trend of cross-border e-commerce trade all over the world. The prime reason that online and offline retailers may prefer dropshipping is that it can save considerable amounts of money on inventory. It can be based and operate from any location, thus, not requiring a warehouse to store inventory. These benefits may act as a major driving force that contributes significantly towards dropshipping adoption.
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The COVID-19 pandemic has an unfavorable impact on the global dropshipping industry, particularly in the North American region. Producers, suppliers, and logistics companies are facing significant disruptions to their business operations, which is suspending the products' deliveries.
The constantly spreading virus-infected patients worldwide have restricted several logistics companies from regularly operating as they are operating the pre-COVID pandemic. In the U.S., the highest number of market players was observed, although slower than typical growth throughout the COVID-19 crisis, indicating a collapse in the dropshipping market valuation in recent years.
The continual rise in the proliferation of the smartphone has created a significant growth prospect for market players. Nowadays, the market demand for smartphones has revolutionized online shopping with the availability of several mobile applications to create an experience convenient and easy for consumers. Thus, the constant rise in smartphone penetration, coupled with growing consumer spending power, is paving toward the development of the e-commerce market, which eventually accelerates the market demand for dropshipping services.
There has been a remarkable market growth in investments witnessed by the market players in the online retailing sector on the back of the rising shoppers that are inclined toward e-commerce platforms. For instance, according to United Nations Conference on Trade and Development (UNCTAD), the global number of online shoppers reported for 1,114 million in 2016 and reached almost 1,452 million in 2018.
Additionally, dropshipping usage has been further expanding significantly as it is economical in terms of business setup and maintenance cost, and therefore, several companies are extremely involved in using dropshipping services. This is mainly due to it improving business operations as well as facilitating better cost-saving options to customers. Hence, global companies are looking forward to integrating such services and playing a critical role in changing the dynamics of the dropshipping market during the forecast period.
The market is primarily segmented on the basis of product, type, organization size, and region.
By Organization Size
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Based on the product dropshipping segment, the electronics & media segment is expected to register for the largest market share in the global market of dropshipping during the foreseen period. This is due to the extensive adoption of electronic products among consumers due to growing online retailing worldwide.
The rise in e-commerce platforms further creates numerous possibilities for selling electronic products since consumers can compare a broad portfolio of products, secure discounts, and appeal to easy returns which contributes to dropshipping industry. Furthermore, the increased accessibility of affordable electronic products has aided online retailing to reach previously inaccessible places. Hence, it is creating a huge implementation of such dropshipping services globally.
Further, the fashion segment is also expected to see positive growth in the global market of dropshipping during 2021-2028, owing to the rapid rise in globalization and alterations in consumer spending behavior. Increasing consumer preference for exclusive products and accessibility of numerous brands on a widespread platform is further projected to reinforce the growth prospect for the fashion dropshipping segment over the forecast period.
On the other hand, the food and personal care dropshipping segment accounted for the fastest CAGR over the forecast period, and hence, is witnessing considerable growth throughout the world. This can be attributed to factors such as the growing consumer purchasing power and spending to procure personal care products and the rising growth of the personal care industry in developed and developing markets. Furthermore, individuals typically opt for online platforms to buy foods and personal care products, which provides time-saving and cost-saving benefits, which is also expected to propel the dropshipping segment's growth.
Geographically, Asia Pacific dominated the global market of dropshipping in 2020 and accounted for the most considerable share revenue due to the escalating market demand for a dropshipping business model in Asian countries, especially India and China. It is considered one of the most cost-effective models for entrepreneurs to commence an e-commerce business.
It further allows an entrepreneur to sell products online, deprived of carrying a large amount of inventory. E-commerce deals in Asia-Pacific countries are growing swiftly, making it the leading industry considering the global scenario. For instance, as per India Brand Equity Foundation (IBEF), the e-commerce sales in 2017 increased at an annual rate of 51%, making it a considerable opportunity for online retailers.
Additionally, online retail sales in China valued around US$1.33 trillion (more than 9.0 trillion yuan) in 2018, indicating a surge of over 23.90% compared with 2017, as per the National Bureau of Statistics of China. Among them, sales of physical goods were estimated at USD 1.1 trillion (7.00 trillion yuan), an increase of roughly 25.4%.
Similarly, online sales of physical goods reported for 18.4% of the overall retail sales of physical consumer goods, up from 3.4 percentage points in the same period. Thus, the rise in the presence of the e-commerce ecosystem in the region delivers marketers the prospect to utilize dropshipping, thus effectively transferring the customer orders and shipment details. This, in turn, is expected to expand the market growth at a rapid pace considering the global scenario.
As per United Nations Conference on Trade and Development (UNCTAD), U.S. has remained to govern the overall e-commerce market. In 2018, United States led the total e-commerce sales with around USD 8,640 billion, compared to Japan with nearly USD 3,280 billion, and China accounted for USD 2,304 billion. As a result, dropshipping has gained immense acceptance, which, in turn, the market is gaining significant prominence worldwide.
Some of the major dropshipping players operating in the global market are AliDropship, Doba Inc., DobaInc, DropshipDirect, Megagoods, Inc., Modalyst, Inc., Oberlo, Onlinestorebiz.com LLC, SaleHoo Group Limited, Sumner Communications, Inc., and Sunrise Wholesale Merchandise, LLC.
Market size value in 2020
USD 140.24 billion
Revenue forecast in 2028
USD 991.95 billion
28.5% from 2021 - 2028
2016 - 2019
2021 - 2028
Revenue in USD million/billion and CAGR from 2021 to 2028
By Product, By Type, By Organization Size, By Region
North America, Europe, Asia Pacific, Latin America, Middle East & Africa
AliDropship, Doba Inc., DobaInc, DropshipDirect, Megagoods, Inc., Modalyst, Inc., Oberlo, Onlinestorebiz.com LLC, SaleHoo Group Limited, Sumner Communications, Inc., and Sunrise Wholesale Merchandise, LLC.