Companies in this industry sell merchandise on retail websites, online auctions, mail-order catalogs, toll-free telephone numbers, television shows, or other business channels. Major companies include US-based Amazon, eBay, HSN, QVC, and Newegg, as well as Alibaba Group (China), Argos (UK), JD.com (China), MercadoLibre (Argentina), and Otto Group (Germany).
Demand is driven by consumers’ personal income. The profitability of individual online retailers depends on effective marketing and competitive pricing to build a customer base. Larger firms enjoy central purchasing efficiencies and economies of scale in inventory management, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products. The industry is concentrated: the top 50 companies account for about 60% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products sold by internet and mail-order retailers include prescription drugs, health and beauty aids, cosmetics, computer hardware and software, clothing, and books. Popular categories listed on consumer-to-consumer (C2C) auction websites include collectibles, antiques, and electronics. High-end merchandise includes real estate, yachts, and cars.