Surge In Consumer Holiday Shopping And Continued Growth In Business To Business E-Commerce Sector Exceed Industry Expectations
SANTA BARBARA, CA–(Marketwired – January 05, 2016) – CloudCommerce, Inc. (CLWD), focused on building and maintaining powerful e-commerce stores for leading brands, today reviewed several industry reports showing a successful holiday season for the e-commerce industry.
MasterCard (MA) reported that U.S. retail sales grew by a solid 7.9% this holiday season, fueled by strong online sales and demand for furniture and women’s apparel. Online sales alone grew 20% in the holiday season this year.
Amazon (AMZN) shipped to 185 different countries this holiday season, and announced that three million new members worldwide joined Prime during the third week of December alone. The company’s Prime Now service, which promises two-hour deliveries, was reportedly taking online orders until 11:59 pm on Christmas Eve. Slice Intelligence said that Amazon accounted for 35.7% of all Black Friday Sales, with Best Buy (BBY) second at just 8.2% and Macy’s (M) third at 3.4%.
According to Slice Intelligence, which tracks receipt data from U.S. online shoppers, Wayfair (W), the Boston-based home goods e-tailer, saw the largest increase in Black Friday sales, year-over-year, of any online retailer. Wayfair’s Black Friday sales were reported to be 315% higher than during Black Friday 2014, with a 130% increase in direct-retail sales.
Around the globe, major growth can be seen emerging in the business-to-business (B2B) e-commerce sector. Inspired by the tremendous success of Alibaba (BABA), the Indian government is reportedly working to establish a massive international B2B e-commerce hub for importing and exporting. Several features of Alibaba’s online portal are expected to be incorporated into this new project. Alibaba has made major moves to tap into the Indian B2B market, launching programs like SMILE to provide one-stop solution for all Indian SMEs (which include shipping, finance, mentorship and more), and by signing a memorandum of understanding with the Confederation of Indian Industry to facilitate greater economic cooperation among Indian and Chinese vendors.
Chinese growth continues. A study done by iResearch revealed that online shopping and B2B e-commerce drive roughly 53% of China’s 3rd-party online payment sector. The e-commerce sector in China has seen a substantial increase in online shopping and B2B e-commerce gross merchant volume, with online shopping capturing 25% of online payments in Q2 2015, followed in turn by fund purchase at 21.5%, air travel ticketing at 10.9%, payment for telecom fees at 3.9%, B2B e-commerce at 6%.
Chinese e-commerce merchant Vipshop Holdings (VIPS) is an online discount marketplace that uses flash sales. The first Chinese B2C e-commerce company to achieve profitability, Vipshop controlled 2.8% of the Chinese B2C market in 2014, compared to JD.com’s (JD) 21.2% share. On mobile devices, its number of active customers and orders rose 137% and 141% annually. Vipshop’s number of active customers rose 48% to 14.6 million and their revenue has risen 63% annually to $1.36 billion.
“We believe that this is the right time to be implementing our growth-by-acquisition plan,” said CloudCommerce CEO Andrew Van Noy. “Our recent acquisition of Denver-based Indaba Group will allow us to offer services to both the business-to-consumer merchants and business-to-business merchants. Looking at the past year in review, we are pleased with the steady progress we see on all fronts. As we look forward to 2016, we aim to aggressively increase the number of customers that regularly depend on us for e-commerce services by acquiring other rapidly growing e-commerce service providers.”
E-commerce is reportedly one of the fastest-growing industries in the world. According to market research firm eMarketer, global consumers will spend $1.672 trillion online this year, and by 2019, online purchases are projected to more than double to $3.551 trillion, which will include roughly 12.4% of overall retail sales worth $28.550 trillion. According to Fitch Ratings’ 2016 U.S. retail outlook, e-Commerce will account for 15% of total retail sales and 50% growth in total retail spending in 2016. “The e-commerce industry is a force that no investor can afford to ignore,” said Cushla Sherlock, of Credit-Suisse.
CloudCommerce plans to grow its business by making acquisitions that are highly accretive to bottom-line financial results. This strategy mirrors that used by many other successful information technology firms, such as PFSweb Inc. (PFSW), Perficient Inc. (PRFT) and Cognizant Technology Solutions Corporation (CTSH).
CloudCommerce, Inc. (CLWD) builds and maintains powerful e-commerce stores for leading brands. Our customers depend on us for highly customized and sophisticated e-commerce stores to effectively compete in the $1.6 trillion worldwide e-commerce market. We add value by providing advanced e-commerce services including (1) robust backend integration to other business systems, (2) effective digital marketing and analytics, (3) complete and secure site management, and (4) integration to physical stores. Our goal is to become the industry leader by rapidly increasing the number of customers who regularly depend on us and by acquiring other rapidly growing e-commerce service providers. To learn more about CloudCommerce, please visit www.cloudcommerce.com.
Matters discussed in this shareholder letter contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect” and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These risks include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, products, and prospects for sales, failure to commercialize our technology, failure of technology to perform as expected, failure to earn profit or revenue, higher costs than expected, persistent operating losses, ownership dilution, inability to repay debt, failure of acquired businesses to perform as expected, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.