Dropshipping Market

Global Dropshipping Market Size

The size of the global dropshipping market was valued at USD 278.80 billion in 2023 and is expected to be worth USD 1,849 billion by 2032 from USD 344.04 billion in 2024, growing at a whopping 23.4% CAGR from 2024 to 2032.

Dropshipping is a business model that you can use to manage your store without having inventory. Once you have made a sale, your supplier will send your products from your warehouse directly to your customer's door. You will never have to worry about storing, packing, or shipping your merchandise. Smartphones have revolutionized online shopping with many mobile applications to make the experience easy and convenient for consumers.

The global dropshipping market has had a promising past in recent years, and the future of the market is anticipated to be lucrative. The rise of e-commerce and increasing demand for streamlined supply chain solutions are continuously driving traction to the dropshipping market worldwide. The growing penetration of smartphones, combined with the increase in disposable income of consumers, is contributing to the growth of the e-commerce market, thus driving the demand for dropshipping services. There has been a notable increase in the investment of the main actors in the e-commerce sector due to the number of buyers inclined to online shopping platforms. According to Adam Enfroy of BigCommerce, dropshipping is a lot of work, no matter how you cut it. Although it seems unimportant, drop shippers must still do business with their wholesale suppliers, such as order processing, returns, and customer service. However, you can increase the attractiveness of your market by keeping a small lot in your room that you can sell as immediate shipping at a high price. This way, you can attract the audience who do not wish to wait, but for those who don't want to pay a premium, the cost and the wait will work in the right way. The United States, China, Japan, India, the United Kingdom, Australia, and Canada are some of the lucrative markets for drop shipping, and giant e-commerce platforms such as Shopify, WooCommerce, and Amazon have a strong regional focus on these countries.

MARKET DRIVERS

Growing E-commerce Industry and Low Initial Investment Required for Dropshipping.

The growth of e-commerce is likely to grow further in the coming years owing to the increasing preference of consumers for online shopping, which is making dropshipping a viable business model for entrepreneurs. The boom of e-commerce platforms such as Shopify, WooCommerce, and Amazon have eased access to online retail for several individuals and small businesses, allowing them to open virtual storefronts to sell their products to global audiences without the worry of managing inventory or logistics. The e-commerce market in Asia-Pacific has experienced steady growth in recent years due to the increase in disposable income and the rising preference for online shopping. This growth in the e-commerce sector should also encourage the practice of dropshipping. According to the Ministry of Commerce and Industry of the Government of India, India's e-commerce market was valued at $ 38.5 billion in 2017 and is likely to reach $ 200.0 billion by 2026, progressing at a whopping CAGR of above 51.0 %. Traditional distribution channels force retailers to invest heavily in inventory management. However, with the increasing penetration of e-commerce platforms, retailers are choosing dropshipping services to reduce capital costs for inventory purchase/management. Also, lower capital investment in inventory and logistics has led to increased demand for dropshipping in retailers. The reduction in general costs and the full range of products are other factors that should boost the market growth.

Globalization and Access to International Markets

Using e-commerce platforms and technological advancements in logistics and supply chain management, businesses can now approach customers worldwide, eliminating geographical boundaries and tapping opportunities in new markets. Dropshipping is offering global reach to businesses to increase their customer base and diversify their revenue streams. Globalization has aided cross-border trade by streamlining customs procedures, reducing trade barriers, and offering seamless transactions.

The growing popularity of social media marketing, rapid adoption of dropshipping automation tools, increasing demand for personalized and customizable products and growing number of online marketplaces are contributing to the expansion of the global dropshipping market.  Shift towards direct-to-consumer (DTC) business models and increasing interest in influencer and affiliate marketing, accessibility of dropshipping education and training resources and technological advancements in logistics and supply chain management are further favoring the global market growth.

MARKET RESTRAINTS

Fraudulent or Unauthorized Transactions

Security in terms of payment is one of the main concerns of the industry because dropshipping mainly refers to online purchases. Payment gateways are susceptible to security breaches or cyber-attacks, which should be a challenge for the market. Direct delivery services require a delivery infrastructure to avoid delays in delivery, damage, or loss of packages. As a result, the complexity of transportation and product logistics could slow the growth of the worldwide market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

By Product Insights

The electronic and media segment accounted for 26.4% of the global market share in 2023.

The demand for consumer electronics and digital media products is on the rise worldwide, which is majorly propelling the expansion of the electronics and media segment in the global market. The e-commerce platform opens up several avenues for selling electronic products, as customers can compare an extensive portfolio of products, get discounts and request easy returns. The rapid adoption of smartphones and smart devices and the increasing popularity of online streaming services are further promoting the growth of the electronics and media segment in the global market. Consumers always seek convenience, affordability, and good quality products in shopping, which makes dropshipping an attractive channel to purchase electronics and media products. According to statistics, approximately 60% of consumers prefer to purchase consumer electronics via online channels due to competitive pricing and convenience. The major dropshipping platforms have been experiencing continuous demand for consumer electronic products and the sales of these products are growing on a double-digit growth rate year-on-year.

The fashion segment is foreseen to experience a promising CAGR during the forecast period in the global dropshipping market due to rapid globalization and changes in consumer spending behavior. It is presumed that the growing consumer preference for branded products and the availability of multiple brands on a common platform will energize the fashion segment during the forecast period. The changing consumer preferences and rapid adoption of fast fashion are boosting the growth rate of the fashion segment in the global market.

REGIONAL ANALYSIS

The Asia-Pacific dropshipping market held a notable share in 2023. The growth of the APAC market is credited to the rising number of e-commerce companies in the region, which subsequently boosted demand for dropshipping services. The expansion of online retailers across the Asia-Pacific region is attributed to the increase in internet connectivity through the adoption of smartphones. According to the Global System for Mobile Communications Association (GSMA), the number of smartphones in the Asia-Pacific region is estimated to reach 3,900 million by 2025. The Indian e-commerce market has expanded significantly in recent years, which has surged the number of new companies serving this market. This is expected to drive further demand for dropshipping services in the Asia Pacific over the forecast period. These services help new businesses focus on key marketing activities or skills while reducing inventory costs. It allows new players with limited resources to compete with the well-established giants of the market. Therefore, the advantages mentioned above have led to the adoption of these services among new e-commerce companies, which is stimulating the growth of the dropshipping market in the Asia-Pacific region.

North America is another major region and is predicted to grow substantially during the forecast period for the dropshipping market. The regional industry is anticipated to register a healthy CAGR during the estimation period. The large base of online shoppers across North America is a big plus to the regional industry. The favourable business regulations that promote entrepreneurship in the area, the presence of established logistics networks and the technological infrastructure that supports the efficiency of these operations further support the expansion of the regional market size. The major e-commerce platforms such as Amazon, eBay and Shopify are promoting the dropshipping business by offering user-friendly interfaces and integrated tools for inventory management and order fulfilment. The U.S. is the major hub in the North American industry and accounts for the largest share of the regional market. Canada is a notable market for in the region and is estimated to do propel in the coming years.

Europe is a prominent player in the dropshipping market. It is predicted to hold a substantial share of the global market during the conjunction period. Cross-border e-commerce is rapidly growing on the continent, which is encouraging market growth in Europe. In addition to that, factors such as the increasing popularity of online marketplaces, the rise of digital payment systems, the presence of a tech-savvy consumer base, and favorable regulatory policies for the e-commerce industry are further pushing forward the European dropshipping market size. Popular e-commerce platforms like Alibaba, AliExpress, and eBay are serving consumers and are providing opportunities to dropship companies in the region. Moreover, the initiatives by the European Union, such as the Digital Single Market strategy to promote digital entrepreneurship and cross-border trade, are contributing to the dropshipping ecosystem in the European region.

Latin America is a growing dropshipping market and presents a lucrative opportunity for entrepreneurs to advance further in the online business model by focusing on low cost. The leading players in the region are EPROLO, Luxjoias, Cheap Wholesale, CJDropshipping, New Angel, Fabrica de Biquinis, and Grandes Grifes. Since taxes and import duties in Brazil are on the higher side, the industry is primarily established on national dropshipping. This encourages engagement with domestic suppliers to prevent tariffs and concerns from the international industry, and on the other side, it is also an obstacle hampering the growth of the regional market share. Apart from this, Brazil possesses the fifth-biggest online community globally, and around 94 percent of the nation’s digital people use the internet regularly. Additionally, Chile exhibits a promising picture, with the government pushing for sustainable aviation fuel and establishing three new warehouses. Also, among other countries in the region, it is one of the highly stable and market-friendly countries, increasing its growth prospects. Furthermore, Mexico is another region with tremendous opportunity. There is a considerable market void, and the competition is not as intense. With internet penetration or reach still in progress, it presents a suitable landscape for dropshipping.

In the Middle East, dropshipping has gained traction in Saudi Arabia in recent years and is anticipated to continue this growth trajectory. As per a study, close to 98 percent of people in the country have an internet connection in 2022, and even 99 percent in the case of households. This was mainly boosted due to COVID-19, with more customers adopting digital shopping platforms and websites. The market will benefit from the fact that people in Saudi Arabia favor goods or items customized to their culture and lifestyle. Moreover, due to expanding e-commerce, the public can access a large number of goods. Consequently, niche products are gaining prominence and are suitable for the dropshipping industry. Lastly, mobile commerce also fuels the nation’s market share by improving their websites for smartphones and providing device-friendly payment choices that can leverage this trend. On the other, the market in the United Arab Emirates has become more famous because of its lower start-up expenditure and the capability to reach a broader consumer base without the necessity for a physical storage facility.

In Africa dropshipping is a profitable business for several people in South Africa, considering it a severe unemployment problem. The majority of vendors utilize Chinese e-commerce websites, such as AliExpress and Shein, which are prevalent in the nation.

KEY MARKET PLAYERS

AliDropship, SaleHoo Group Limited, Doba, Inc., Oberlo and Shopify Inc. are some of the major players in the global dropshipping market.

RECENT HAPPENINGS IN THE MARKET

• Shopify Inc., an e-commerce platform, acquired Oberlo, a known dropshipping service provider. This acquisition allowed Shopify to extend its presence into the global dropshipping market and improve its position. In addition, large e-commerce companies are expanding their portfolios to provide drop shipping services to manufacturers and wholesalers.
• In March 2024, Asset Entities Inc. signed a contract with Zendrop. It will furnish its solutions and services to Zendrop via a SaaS platform called Ternary for payment execution and Stripe Verified Partner for Discord communities. It offers a package of discord customer analytics, payment processing, and customer relationship management (CRM) solutions.

MARKET SEGMENTATION

This research report on the global dropshipping market is segmented and sub-segmented into the following categories.

By Product

• Toys
• Hobbies and DIY
• Furniture and Appliances
• Food and Personal Care
• Electronics and Media
• Fashion 

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa