Drop Shipping Global Market Report 2024

The drop shipping market size has grown exponentially in recent years. It will grow from $257.37 billion in 2023 to $340.57 billion in 2024 at a compound annual growth rate (CAGR) of 32.3%. The growth observed in the historic period can be attributed to factors such as the expansion of e-commerce, the growth of marketplaces, efforts by retailers to reduce costs, the availability of diverse product offerings, and the ease of market entry.

The drop shipping market size is expected to see exponential growth in the next few years. It will grow to $963.66 billion in 2028 at a compound annual growth rate (CAGR) of 29.7%. The anticipated growth in the forecast period can be attributed to the rise of niche markets, increasing consumer demand for fast shipping, global market access, scalability and flexibility in operations, and a focus on sustainability practices. Major trends expected in this period include collaboration with influencers and social commerce, the integration of blockchain for supply chain transparency, the implementation of flexible payment and pricing models, a heightened focus on niche and specialty products, and the popularity of subscription boxes and curated product offerings.

The growth of the e-commerce industry is anticipated to propel the drop shipping market. E-commerce, involving the online purchase and sale of goods and services through devices such as phones, computers, laptops, and tablets, has become a prominent mode of retail. Drop shipping provides several advantages to the e-commerce sector, particularly by eliminating the need for inventory maintenance or physical stock, thereby reducing warehouse and labor costs. The e-commerce industry experienced substantial growth during the COVID-19 pandemic, driven by restrictions on movement and increased reliance on online shopping. According to the US Department of Commerce Retail Indicator Division's Quarterly Retail e-commerce Sales Q4 2021 report, US e-commerce sales reached $870 billion in 2021, marking a 14.2% increase over 2020 and a significant 50.5% increase over 2019. As the e-commerce industry continues to expand, the demand for efficient and flexible supply chain solutions such as drop shipping is expected to rise, contributing to the growth of the drop shipping market.

The increase in online shopping is anticipated to drive the growth of the drop shipping market. Online shopping, a form of electronic commerce, enables consumers to buy goods or services directly from a seller over the internet using a web browser or mobile app. The drop shipping business model relies significantly on online shopping, serving as the primary sales channel where customers discover and make purchases. For example, in November 2023, data from Tidio, a Poland-based customer service software company, indicated that 70% of Americans were expected to engage in online shopping. In 2022, the United States had a total of 268 million digital buyers, and this number was projected to reach 285 million by 2025. The surge in online shopping activities reflects a growing trend, and as more consumers turn to online platforms for their shopping needs, the drop shipping market is expected to experience further growth.

The integration of artificial intelligence (AI) in the drop shipping business is a notable trend in the market. Major companies are actively incorporating AI technology into their existing platforms to enhance various aspects of their operations. AI brings several benefits to the drop shipping industry, including personalization, process automation, data analysis, and the elimination of unwanted data. For instance, in 2021, AliDropship, a US-based subsidiary of AliExpress specializing in drop shipping, introduced Sellika, a new AI product description generator designed to automate the creation of product descriptions. This plugin from AliDropship assists in tasks such as editing product descriptions, modifying colors, updating category descriptions, and providing a stop word list for titles. The integration of AI in drop shipping platforms reflects a commitment to leveraging advanced technologies for efficiency, customization, and improved overall performance.

Major companies in the drop shipping market are introducing service innovations, such as end-to-end supply chain services, to support third-party sellers. End-to-end supply chain services encompass a fully automated suite of services that streamline the entire supply chain process for third-party sellers. For example, in September 2023, Amazon.com, Inc., a prominent US-based e-commerce company, launched an end-to-end supply chain service designed to assist third-party sellers from the manufacturing facility to the customer's doorstep. This service is planned to leverage Amazon's existing fulfillment network in combination with external contractors. The objective is to simplify the supply chain process, enhance reliability, and expedite product delivery, all at a reduced cost for the sellers. The comprehensive service includes features such as cross-border transportation, customs clearance, inventory storage, automated inventory replenishment, and customer delivery. This innovation aims to offer an efficient and cost-effective solution for sellers engaged in drop shipping.

In June 2021, Wix, an Israel-based software company specializing in website building, acquired Modalyst for an undisclosed amount. This strategic acquisition enables Wix store owners to seamlessly connect their online stores to a well-established network comprising thousands of suppliers, manufacturers, and wholesalers. By doing so, Wix store owners gain access to a diverse range of products, spanning from well-known brands to trending items and independent labels. Modalyst Inc., the acquired company, is a US-based software company that provides drop shipping and e-commerce platforms.

Major companies operating in the drop shipping market report are Alibaba Group Holding Limited, AliExpress, Shopify Inc., Buy 2 Bee LLC, Sprocket Express LLC, ASI Partner lnc., Printful Inc., Winx lnc., TeleDynamics Communications Inc., Wholesale Fashion Square LLC, Gooten LLC, Doba Inc., SaleHoo Group Limited, Megagoods lnc., Wholesale2B LLC, Sunshine Ecommerce Technologies LLC, Modalyst lnc., Parkflyers R/C Corporation, Sunrise Wholesale Merchandise LLC, CJDropshipping.com, Avasam Limited, Spocket lnc., Syncee.io Kft., Worldwide Brands lnc., Dropified LLC, National Dropshippers lnc., BrandsGateway Marketplace AB, Inventory Source LLC, Dropwow Inc., Banggood Technology Co. Ltd., SaleSource Limited, HyperSKU Co.Ltd., Yakkyofy Srl, DropCommerce Inc., Printify lnc., Spodify GmbH, The Dropship Factory Pty. Ltd., Print Aura LLC.

North America was the largest region in the drop shipping market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the drop shipping market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the drop shipping market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Drop shipping offers a range of products, with main categories including toys, hobby and DIY, furniture and appliances, electronics and media, food and personal care, and fashion. In the realm of toys, hobby, and DIY, the fulfillment of orders happens without the need to stock the products in a warehouse. Different drop shipping models include business extensions, print on demand, product creation, and product reselling. Organizations engaging in drop shipping vary in size, encompassing both large enterprises and small to medium-sized enterprises (SMEs).

The drop shipping market research report is one of a series of new reports that provides drop shipping market statistics, including drop shipping industry global market size, regional shares, competitors with a drop shipping market share, detailed drop shipping market segments, market trends and opportunities, and any further data you may need to thrive in the drop shipping industry. This drop shipping market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The drop shipping market includes revenues earned by entities by providing services such as product reselling, business extensions, product creation, and print on demand. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.