Dropshipping Market

Market Overview:

The global dropshipping market size reached US$ 210.2 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 913.1 Billion by 2028, exhibiting a growth rate (CAGR) of 27.6% during 2023-2028. The increasing awareness through online courses, rising reliance on online websites for buying essential daily goods and luxury items, and the growing number of collaborations between retailers and manufacturers are some of the major factors propelling the market.

Dropshipping refers to a retail fulfillment method wherein a store does not keep the products it sells in stock. It allows retailers to focus on marketing, customer service, and sales without the burden of managing a physical inventory. It purchases the article from a third party and has it shipped directly to the customer as compared to selling products in a store. It eliminates the need for the retailer to maintain inventory or own a physical store and reduces the financial risk and overhead for the business owner.

The increasing awareness about dropshipping through workshops and online courses is strengthening the growth of the market around the world. Moreover, the rising reliance on online websites for buying essential daily goods and luxury items and the growing number of global and domestic trade activities are influencing the market positively. In addition, the increasing number of collaborations between retailers and manufacturers for a more efficient dropshipping process is favoring the growth of the market. Apart from this, shifting preferences from conventional distribution methods toward the dropshipping business model among retailers due to its numerous benefits, including lower capital inputs in inventory and logistics, is propelling the growth of the market. Furthermore, the growing demand for faster delivery of packages and the rising number of e-commerce startups is creating a positive outlook for the market.

Dropshipping Market Trends/Drivers:

Increase in expansion of e-commerce

The continuous expansion of e-commerce platforms represents one of the primary factors driving the demand for dropshipping. As more consumers turn to online shopping, retailers are looking for efficient ways to fulfill orders without maintaining a physical inventory. Dropshipping allows them to connect directly with manufacturers or wholesalers, who then ship the products to the customers. This model reduces overhead costs for the retailer and makes it easier to offer a wide variety of products. The trend towards online retail is expected to continue, further fueling demand for dropshipping.

Rise in sustainability considerations

As sustainability becomes a growing concern, dropshipping offers a more environment friendly option for retail. It eliminates the need for additional transportation and warehousing by shipping products directly from the manufacturer to the consumer. This reduction in transportation can lead to lower carbon emissions. Additionally, retailers can more accurately match supply with demand, minimizing overproduction and waste. As environmental considerations become increasingly vital in consumer choices, the inherent sustainability of the dropshipping model may continue to drive its demand.

Growing demand for personalized products

The demand for customized and personalized products is growing among consumers. Dropshipping facilitates this trend by enabling retailers to offer personalized products without holding them in inventory. Manufacturers and suppliers can create custom products on demand, which allows for unique offerings that cater to individual preferences and needs. This ability to provide tailored solutions without significant upfront investment is pushing more retailers toward dropshipping, which aligns with the consumer desire for unique and individualized shopping experiences.

Dropshipping Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global dropshipping market report, along with forecasts at the global, regional and country levels from 2023-2028. Our report has categorized the market based on product, type and application.

Breakup by Product: 

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

Electronics and media dominate the market

The report has provided a detailed breakup and analysis of the market based on the product. This includes toys, hobby and DIY; furniture and appliances; food and personal care; electronics and media; and fashion. According to the report, electronics and media represented the largest segment. Dropshipping electronics and media products includes gadgets, tech accessories, entertainment devices, and media formats like DVDs, Blu-rays, and books. Retailers can cater to tech-savvy consumers by offering the latest gadgets, headphones, phone accessories, and e-readers. This category also provides opportunities to offer trending electronics and media releases.

Toys, hobby, and DIY encompasses a wide range of products including toys, games, craft supplies, hobby-related items, and DIY tools. Retailers can offer a diverse selection of products that cater to various age groups and interests. Drop shippers can curate an assortment that appeals to hobbyists, parents, educators, and enthusiasts from remote-controlled cars to art supplies and woodworking tools.

Dropshipping furniture and appliances allows retailers to offer a variety of home furnishings, decor, and essential appliances. From sofas and beds to kitchen gadgets and electronic appliances, this category provides options for furnishing entire homes or catering to specific needs. Retailers can tap into trends like space-saving solutions or eco-friendly designs to attract customers looking to enhance their living spaces.

Breakup by Type:

• Same-Day Delivery
• Regional Parcel Carriers
• Heavy Goods Delivery
   

A detailed breakup and analysis of the market based on the type has also been provided in the report. This includes same-day delivery, regional parcel carriers, and heavy goods delivery. Same-day delivery dropshipping involves fulfilling orders and delivering products to customers within the same day the order is placed. This expedited option is particularly popular for local deliveries or in densely populated areas. It caters to customers who require immediate gratification and is often used for perishable items, groceries, and time-sensitive products. Retailers need efficient logistics and partnerships with local courier services to ensure timely deliveries.

Regional parcel carriers are local or regional courier services that specialize in delivering packages within a specific geographic area. This type of dropshipping focuses on faster deliveries within a particular region, which offers competitive shipping rates compared to national carriers. Retailers can leverage these carriers to ensure quicker delivery times and potentially lower shipping costs for customers located nearby. Regional parcel carriers are especially useful for minimizing transit times for products that don't require national shipping.

Heavy goods delivery dropshipping involves shipping larger, bulkier items that require special handling due to their weight, size, or fragility. It consists of furniture, appliances, fitness equipment, and large electronics. Retailers partnering with heavy goods delivery services need to ensure proper packaging, specialized transportation, and careful handling to prevent damage during transit. This type of dropshipping requires coordination with carriers equipped to handle heavy loads and navigate potential challenges related to delivery logistics.

Breakup by Application:

• Business-to-Business (B2B)
• Business-to-Consumer (B2C)
• Customer-to-Customer (C2C)
   

The report has provided a detailed breakup and analysis of the market based on the application. This includes business-to-business (B2B), business-to-consumer (B2C), and customer-to-customer (C2C).

In the B2B context, dropshipping involves one business selling products to another business. This can include wholesalers or manufacturers who offer their products to retailers without the need for the retailer to hold inventory. The retailer acts as an intermediary, marketing the products and facilitating the sale. When an order is received, the retailer passes the order details to the supplier who then fulfills and ships the product directly to the retailer's customer. B2B dropshipping is commonly used in industries where businesses want to offer a wide range of products to their customers without the cost of maintaining their own inventory.

B2C dropshipping is the most common application, where a business sells products directly to individual consumers. The retailer advertises and sells products through their e-commerce platform. When a customer places an order, the retailer forwards the order information to the supplier or manufacturer who handles the fulfillment and shipping directly to the end customer. B2C dropshipping allows retailers to enter the market quickly with minimal upfront investment, focusing on marketing, customer experience, and branding, while outsourcing the logistics and inventory management.

C2C dropshipping involves individuals selling products to other individuals, often through online marketplaces or platforms. This is typically facilitated by platforms that connect sellers with buyers. When a product is sold, the seller coordinates with a third-party supplier or manufacturer who ships the product directly to the buyer. C2C dropshipping is a way for individuals to start an e-commerce business without the need to stock inventory. It has commonly seen in peer-to-peer resale scenarios, where individuals sell new or used items to other individuals.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific exhibits a clear dominance, accounting for the largest dropshipping market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share.

The increasing inclination towards online shopping portals on account of a considerable reliance on smartphones and rising penetration of high-speed internet connection represents one of the primary factors driving the demand for dropshipping in the Asia Pacific region. Moreover, the growing proliferation of digital payment options and improving infrastructure in many Asia Pacific countries is supporting the seamless execution of dropshipping transactions and order fulfillment. Besides this, rising cross-border e-commerce trade activities are bolstering the market growth in the region.

North America is estimated to witness stable growth, owing to increasing number of e-commerce startups, rising strategic collaborations, integration of advanced technologies, etc.

Competitive Landscape:

The leading companies are using automation tools to streamline order processing by automatically sending orders to suppliers for tracking shipment status and updating customers. APIs and software integrations facilitate this seamless flow of information between retailers and suppliers. They are also integrating advanced technologies, such as artificial intelligence (AI) and blockchain technology to analyze customer data and predict trends, which helps retailers anticipate demand and optimize inventory levels. This prevents overstocking or stockouts, which improves overall efficiency. These advancements also enhance transparency in supply chains and help verify the authenticity of products, ensure ethical sourcing, and provide a secure record of transactions between parties.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• AliDropship (Sunshine Ecommerce LLC)
• Doba Inc. (Focus Technology Co. Ltd.)
• Dropified
• DropshipZone
• Megagoods Inc.
• Modalyst Inc. (Wix.com Ltd.)
• SaleHoo Group Limited
• Spocket
• Sunrise Wholesale Merchandise
• Worldwide Brands Inc.

Recent Developments:

• In 2021, Wix.com, Inc. acquired Modalyst, a key player in the dropshipping platform, for enabling the e-commerce merchants of the company to access a native marketplace and integrate the dropshipping platform for white-label product fulfillment.
• In 2023, DropshipZone recently collaborated with Independent creative studio Christopher Doyle & Co and developed a new brand identity along with a new tagline, ‘Make Ship Happen’ which encourages Aussies to start and scale their own ecommerce businesses.

Dropshipping Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the dropshipping market from 2017-2028.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global dropshipping market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the dropshipping industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.