Digital Commerce Software Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The digital commerce software market is expected to register a CAGR of 12.64% during the forecast period. The market is anticipated to witness a drastic growth rate primarily due to the increase in the need for unified commerce. Since customers nowadays use an increasing number of channels throughout both the buying and owning stages, making their entire process smooth, the market for digital commerce software will witness a severe demand throughout the forecast period.

Key Highlights

• As organizations move towards a subscription-based business model, sellers benefit greatly from repeatable, predictable revenue. Customers prefer features like convenience, cost savings, and personalized curation, which will create a massive demand for the market for digital commerce software. Moreover, cloud solutions are expanding globally, which plays a crucial role in propelling digital commerce growth due to its cost-effectiveness, automatic integrations, minimum IT investment, and ease of accessibility.
• Further, with the increase in demand for the internet of things (IoT), smart home appliances can make purchases on behalf of customers. It will thus reduce the customers' efforts to make a purchase. This digital commerce trend is creating new interactive channels and business opportunities.
• Online commerce is an indispensable vector of a merchant's strategy, and an optimized e-commerce platform translates into increased conversions and higher buying frequency. Shopify grew from a budding startup providing an additional platform for retail stores to a behemoth, servicing nearly 156,466 online stores in the United Kingdom, reflecting a growth of 218.81% and 59,590 stores in France, with an increase of 320.85% from March 2020 to January 2022. But the platform's development is most evident in Germany, where the growth rate is 480.18%, with 13,554 stores in March 2020 and 78,638 stores in January 2022. The growth is creditable to Shopify's intuitive and user-friendly operability that enables businesses to create e-commerce websites despite lacking technical knowledge and coding skills.
• However, on the flip, cybersecurity issues and raising privacy concerns are the major restraints for the market during the forecasted period.
• With the onset of the COVID-19 pandemic, there has been a significant shift to teleworking, creating tremendous data generation and a need for the cloud. When the pandemic hit hard and physical retail outlets closed or limited their operations, midmarket brands pivoted quickly to sell directly to consumers (D2C) and learned to interact with customers digitally-another contributor to the market's growth.

Digital Commerce Software Market Trends

Growth in the Adoption of Cloud-Based Services

• Cloud solutions play a crucial role in propelling digital commerce growth due to their cost-effectiveness, automatic integrations, minimum IT investment, and ease of accessibility. Rapid technological advancements and innovations in cloud-based services improve performance at low costs while providing flexibility to the entire IT ecosystem. Cloud-based deployment emerged as a preferred deployment type for digital commerce software in the recent past.
• Broadly, digital commerce software solutions facilitate enterprises to sell their products online. These solutions offer front-end for customer interaction, along with capabilities to manage back-end activities like order management, warehouse logistics, CRM, data analytics, mobile support, and tracking. The emergence of cloud and enterprise solutions has led to increased demand for digital commerce software applications. These applications can range from a simple shopping cart solution to a comprehensive ERP application dealing with all aspects of digital commerce enterprise.
• Moreover, the market is witnessing various mergers, acquisitions, and investments by key players as part of its strategy to improve business and their presence to reach customers and meet their requirements for multiple applications. With the rise in such activities, the market is anticipated to witness exponential growth during the forecast period.
• For instance, in July 2022, B2B Software-as-a-Service (SaaS)-focused private equity and technology firm Basis Vectors acquired digital commerce cloud platform Commerce V3. This acquisition would enable the company to accelerate its overall impact on its customers and expand its footprint.
• According to a survey conducted by Flexera Software, in the year 2022, around 46% of respondents were running significant workloads on Amazon Web Services (AWS), and 45% of respondents were already running significant workloads on Azure. With this rise in the overall utilization of public cloud platform services running applications globally, the retail cloud market will witness a considerable growth rate during the forecast period.

The Asia- Pacific to Witness the Fastest Growth

• Asia is the fastest-growing area in the global marketplace, accounting for the largest share of the world's business-to-consumer market. Along with that, companies are spending on digital channels. This is supported by the increasing number of smartphone users and high-speed internet connectivity.
• The digitalization of commerce in Asia has created an explosion of new marketplaces that have democratized buyer and seller access to new opportunities. People now have more consumption choices than ever, and sellers have a broad range of new digital pathways toward previously unreached markets.
• As per Indiantelevision.com, the total revenue earned by the pay-TV industry in India through subscriptions alone amounted to more than USD 6 billion in 2021. It is anticipated that by the end of the year 2026, the total revenue earned by the pay-TV industry in India through subscriptions would reach around USD 7.6 billion, driving the market's growth significantly.
• The Asia Pacific market is witnessing various significant activities, which in turn is accelerating the market to grow and expand throughout the forecast period. For instance, in February 2022, Sonata Software, a global IT services and technology solutions company headquartered in India, partnered with Microsoft in its introduction of 'Microsoft Cloud for Retail,' further strengthening its entire offerings to the retail industry. Sonata Software has provided high-quality solutions worldwide based on a deep understanding of retail markets and retailers' requirements and needs, utilizing world-class IPs, in-house migration and modernization tools, and robust engineering services, all underpinned by 'Platformation,' its unique digital transformation framework. Sonata Connected Retail provides personalized, intelligent, and adaptive solutions that primarily allow retailers to unlock the potential latent in their businesses and deal with changing market landscapes.
• Moreover, in September 2022, in conjunction with an IP Week organized by the Intellectual Property Office of Singapore, Alibaba's regional e-commerce platform Lazada came together with leading brands, including HP Inc. and BMW, to announce the launch of Southeast Asia's first e-commerce anti-counterfeit consortium. In its composite declaration, the consortium committed to collaborating with all relevant stakeholders to address rapidly evolving issues of counterfeit trade in online retail and supporting each other in their intellectual property rights (IPR) and consumer protection efforts in the e-commerce environment.

Digital Commerce Software Market Competitor Analysis

The digital commerce software market is highly fragmented and competitive in nature. Some key players are SAP SE, IBM Corporation, Oracle Corporation, Demandware Inc., NetSuite Inc., Sappi Limited, Intershop, Volusion Inc., eBay enterprise, TCS Ltd, Cleverbridge Inc., MarketLive Inc., and Shopify Inc., among others. Product launches, high expenses on research and development, partnerships and acquisitions, etc., are the prime growth strategies these companies adopt to sustain the intense competition.

In November 2022, Konica Minolta partnered with Elastic Path to transform its B2B commerce experience. Elastic Path is the creator and leader of the Composable Commerce Movement, an approach that allows business and technology teams to bring their brands’ unique digital vision to life. This is accomplished by launching and continuously optimizing digital commerce experiences that leverage multiple best-of-breed vendors in a complete, business-ready solution.

In September 2022, Like Digital & Partners declared a partnership with the Commercetools partners community across their European and MENA regional teams. The company is strategically maximizing its partnership network and has selected the innovative partner Commercetools for its place in the global market. By partnering with Commercetools, Like Digital & Partners would deepen its overall capabilities and service offering in the headless, composable commerce space. Commercetools would allow Like Digital to create visionary commerce experiences and thus pave the way for a new digital commerce era.

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