III. Industry Analysis
3.1 Market Size
The global drop shipping market size is projected to reach $621.41 billion by 2028, from $162.55 billion in 2021, at a CAGR of 20.7% during 2022-2028. Factors such as growing inclination towards online shopping and the emerging trend of international e-commerce trade are predicted to fuel the market growth over the forecast duration.
The advent of smartphones has created a new trend for online shopping, with several mobile apps offering a better experience to customers. Increased smartphone usage, along with rising per capita income, is accelerating the market growth for drop shipping services. Increasing spending by leading players of e-commerce retail due to growing online shoppers is predicted to bode well for product demand over the estimated period.
3.2 Industry Profile
The dropshipping market is expected to experience substantial growth due to the increasing popularity of online shopping, especially cross-border e-commerce trade. This trend is driving the demand for dropshipping services, which allow online retailers to sell products without keeping any inventory. Instead, retailers pass on customer orders and shipment details to manufacturers or wholesalers, who ship the products directly to customers. The growth of the e-commerce industry, propelled by rising disposable income and widespread internet and smartphone usage, has contributed to the rise of dropshipping. By using dropshipping, e-commerce companies can benefit from the investments made in warehousing and logistics while also minimizing inventory and logistics costs, leading to an increase in demand for dropshipping services among retailers.
