Commerce Cloud Market Size, Share & Industry Analysis, By Component (Platform, and Services), By Enterprise Size (SMEs, and Large Enterprises), By Application (Grocery and Pharmaceuticals, Fashion and Apparel, Travel and Hospitality, Electronics, Furniture and Bookstore, and Others), By End-use (B2B, and B2C), and Regional Forecast, 2020-2027

The global commerce cloud market size stood at USD 12.32 billion in 2019 and is projected to reach USD 55.67 billion by 2027, exhibiting a CAGR of 20.8 % during the forecast period. North America dominated the commerce cloud market with a market share of 67.78% in 2019.

Social media and unified commerce are observed to be the most significant market trends. The disruption of fifth-generation wireless technology is expected to primarily drive the market growth for commerce cloud, whereas the outspread of the COVID-19 pandemic is likely to create unprecedented opportunities for this market in the near future. According to OLA Mobility Institute (OMI) report published in April 2020, gig workers are ensuring the safety of the citizens across the affected regions by providing home delivery of essential products and services. The report also states that social partnerships and collaborations between local governments and platform companies are playing a vital role in crisis management. This data illustrates that online delivery is likely to have a considerable impact and online glossaries and would be preferred by the customers which expected to enhance the adoption of this market.

MARKET TRENDS

Social Media Analytics is the Striking Trend in the Market

Social media analytics or social commerce trends are inevitably growing in the market, having an increasing impact on digital commerce. According to Shopping Index, in the year 2019 retail sites observed traffic about 35% from social media, while the orders surged by 52%. As a result, it is becoming essential for e-commerce players to enable customers to discover and engage with products and services on social media platforms.

Brands are already leveraging social media platforms such as Instagram and Facebook to connect with the customers. The integration of social media platforms with the commerce cloud enables merchants to provide an immersive shopping experience by uploading the product information from the cloud directly on the social media app. Retailers have started leveraging social media analytics to analyze the customer segments, mitigate fraud risk, and improve targeted advertisements.

Increasing Adoption of Unified Commerce Platforms to Foster Market Growth

Most of the retailers are familiar with omnichannel commerce, in which the customer information is extracted from several channels such as inventory management software, point-of-sale platforms, customer relationship management platforms, and others. Unified commerce is an upgraded version of omnichannel commerce, which creates a single comprehensive interface of customer profiles in real-time across the web, mobile, and other retailers' operations.

Additionally, unified commerce solutions require an end-to-end integration of software solutions within a centralized e-commerce platform. It provides comprehensive customer profiles to promote more actionable and insightful sales initiatives. It also enables the consolidation of a multitude of servers, operating systems, and other applications in the omnichannel sales solutions. Moreover, it bridges the gap between customers and retailers and creates a connected network of business processes to serve digital commerce services. Such implementation of unified commerce is having a positive impact on the commerce related cloud applications in the market.

MARKET DRIVERS

Fifth-generation Wireless Networks to Drive the Adoption of Cloud Commerce Platforms

As smartphones and other connected devices such as tablets/laptops have emerged as the most efficient channel to run applications such as payments, online retailing, and other e-commerce activities, there is an increasing demand for seamless connectivity. 5G wireless technology will make the internet more accessible to all mobile devices. Real-time information feeds and high-quality video streaming would enrich customer experience by providing instant personalized recommendations.

5G, with its low latency and network virtualization capabilities, is likely to enable safe and automated payment practices, which would positively influence the adoption of cloud commerce platforms in the coming years. Further, Internet of Things (IoT) connected applications such as smart wallets, mobile payments, and other digital banking services are likely to leverage 5G for faster and safe banking experience. Thus, the above factors show that 5G wireless networks would ensure to drive the adoption of cloud commerce platforms.

Application of Advanced Technologies such as Blockchain and Artificial Intelligence (AI) is Driving Force for Cloud Commerce

Disruptive technologies such as Blockchain, Artificial Intelligence (AI), Internet of Things (IoT), and Big Data are transforming the online business ecosystem. These technologies are being implemented to enhance data collection, optimize transaction costs, and improve targeted advertisements, among others. Many online retailing companies are using these technologies in their e-commerce activities. For instance, Rakuten Inc., an online retailing and electronic commerce company based in Japan, integrates Machine Learning (ML) and AI capabilities for image recognition. The company uses image recognition for its customer-to-customer (C2C) platform that recognizes and categorizes objects visually by allowing the retailer to sell products easily.

Similarly, in 2018, the T-mall.com, an online retail business-to-consumer (B2C) website owned by the Chinese player Alibaba Group, collaborated with Cainiao Logistics Information Technology Co., Ltd., a logistics company in China. With this collaboration, Alibaba Group deployed blockchain technology in its supply chain operations for effective product tracking and attain complete transparency with respect to product purchases. As a result, integration of advanced technologies such as blockchain and AI is likely to provide improved data security and effective supply chain management. These factors are likely to fuel the commerce cloud market growth during the forecast period. 

MARKET RESTRAINT

Lack of Cyber Laws and Privacy & Security Concerns to Restrict Market Growth

Cybersecurity is one of the most important aspects of cloud-based commerce solutions. A country is bound to implement standard cybersecurity laws to safeguard individual property rights and other online businesses. However, the lack of cyber laws is likely to restrict market growth. It is essential to securely maintain the information and privacy of customers and traders to improve business relationships. Lack of privacy and security continues to be a growing challenge for businesses. As a result, it posses to be a key market restraint.

MARKET OPPORTUNITY

COVID-19 Pandemic to Create Lucrative Market Opportunities for the Market Players

The outbreak of COVID-19 is expected to boost the online sales of retailers. Customers are likely to prefer online shopping and groceries over physically visiting the stores owing to the mandatory lockdowns announced by governments across the globe. In the long term, online shopping is likely to witness a boost from the lifestyle changes adapted by the consumers due to the coronavirus. In this context, eGrocery is expected to witness rapid growth during the outspread. Many companies are investing in accelerating the digital transformation within the enterprise. For instance, Italy-based manufacturer of luxury bags and shoes, Les Petits Joueurs, intends to launch a virtual showroom incorporated with virtual reality capabilities to drive online sales. Hence, the above factors contribute to the fact that in the long-term COVID-19 pandemic situation is likely to create lucrative market opportunities for the market players.

SEGMENTATION

By Component Analysis

Increasing Adoption of Commerce Cloud Platform to Propel Market Growth

By component, the market has been classified into platform and services. Some of the cloud platforms offered by the market players include Commerce Cloud Salesforce, SAP Commerce Cloud (formerly SAP Hybris), and IBM’s multichannel commerce software-as-a-service. These platforms are used by businesses to offer a complete shopping experience to the customers through various channels such as mobile, web, and social media sites. As a result, there is a growing demand for cloud-based solutions in the market owing to easy and scalable access to information.

The market players also offer services along with solutions. The services offered by companies include consulting services, integration and deployment services, and support & maintenance services. For instance, Salesforce.com Inc. offers integration services that include the integration of commerce cloud solutions with the enterprise’s existing product management system, ERP system, or third-party platforms. The services segment is likely to have significant growth in the coming years as they add value to the interactions with customers as well as optimize costs and enrich loyalty.

By Enterprise Size Analysis

Small and Mid-sized Enterprises to Prioritize Customer Relationship Management in Their Tech Budgets

Based on enterprise size, the market has been divided into small and mid-sized (SMEs) enterprises and large enterprises. As large enterprises continue to invest in sophisticated enterprise IT systems, they are likely to account for a major market share. The small- and mid-sized segment is projected to exhibit the highest CAGR during the forecast period. According to Salesforce’s Small & Medium Business Trends Report 2017, the small- and mid-sized enterprises are likely to increase their technology spending on customer relationship management systems, security systems, and financial software, among others.

By Application Analysis

Fashion and Apparel to Drive the Adoption of Commerce Cloud Solutions to Enhance the Digital Engagement

Based on application, the market has been categorized into grocery and pharmaceuticals, fashion and apparel, travel and hospitality, electronics, furniture and bookstore, and others. The others segment comprises of cosmetics and restaurant services. Among these, the fashion and apparel segment is expected to hold a major market share, whereas the travel and hospitality segment is expected to witness the highest CAGR.

These solutions enable fashion and apparel brands to deliver unique content, targeted advertisements and campaigns, recommendations and offers based on browsing history, buying patterns, and the online channels such as social media or web. These capabilities help the brands to grow their digital engagement and unify the customer experience across all touchpoints. For instance, In March 2018, Salesforce.com Inc. announced that NYDJ, a denim and apparel brand has leveraged the Salesforce commerce and marketing cloud to increase its direct-to-consumer online networks and seamlessly deliver personalized shopping experience to its customers.

Besides, cloud-based solutions empower retailers to address the demands of customers with omnichannel shopping and delivery experience. Cloud commerce in grocery supports the specific needs of consumers such as weight-based prices, local delivery, and route-optimized delivery, among others. It also includes grocery-specific payment processes and customer loyalty processes. For instance, SAP SE offers Grocery Commerce Cloud specifically for the grocers. Similarly, the pharmaceutical industry is also expected to witness significant adoption of cloud-based solutions to enhance the automation processes.

Owing to technological advancements and varying customer demands, the travel and hospitality industry requires dynamic computing solutions and services that can support the varying customer requirements. In recent years, there has been significant adoption of cloud computing solutions in the travel industry such as discounts on online tickets that can be shared with the customer through social media or mobile apps. Implementing advanced commerce solutions empowers the travel and hospitality businesses to gain actionable insights using business Intelligence solutions and improved omnichannel management. These factors are likely to drive the adoption of cloud commerce solutions across the industries.

Furthermore, furniture and bookstore are expected to witness a steady adoption of software-as-a-service platforms. Real-time visibility, increasing demands to eliminate the manual process, and unified platforms are some of the factors that drive the need for cloud-based commerce services within a bookstore. Cosmetics, restaurant services including quick restaurants, café chains, and casual restaurants leverage the cloud commerce platforms to analyze sales and strengthen customer database. Hence these factors are likely to contribute to this market growth.

By End-use Analysis

B2C Segment to Exhibit the Highest CAGR During the Forecast Period

By end-use, the market has been classified into business-to-customer (B2C) and business-to-business (B2B) segments. The B2B segment is expected to account for a major market share, whereas the B2C segment is estimated to experience a flourishing CAGR during the forecast period. B2B e-commerce has been accelerating in recent years. The transformation is occurring as the businesses are replacing inefficient and expensive legacy systems with advanced systems such as electronic data interchange. Also, efficient cloud processing capabilities and cost optimization are influencing businesses to adopt commerce cloud solutions.

B2C firms deploy software and digital technologies that are designed to target and optimize retail customer relationship management services across various online channels. Advanced technologies such as AI, big data, and others enable the B2C enterprises to offer personalized content over mobile, web, or social media sites. For instance, Amazon, a B2C market player, offers exclusive Kindle e-reader and collection of e-books. Through Amazon Prime membership, the company offers instant videos and e-books. As a result, cloud-based commerce solutions enable businesses to sell their products through several touchpoints. This factor would ensure to drive the market growth in the coming years.

REGIONAL ANALYSIS

Asia Pacific to Witness a Higher Growth Trajectory During the Forecast Period

The global commerce cloud market has been categorized into five major regions including North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America. The regions are further divided into countries. North America is anticipated to emerge dominant in this market share, while Asia-Pacific is expected to witness a high growth rate.

North America market growth can be attributed to the availability of digital infrastructure and services, the adoption of digital platforms, robust innovation ecosystem, and advances in the Internet of Things. According to CipherCloud’s Cloud Adoption & Risk Report 2014, North American companies approximately on average used 68 analytics cloud applications. This data illustrates that there are substantial investments and infrastructure available for the adoption of cloud-based commerce applications across North America. These factors would ensure to drive market growth across the region.

Asia-Pacific market is expected to witness a higher growth trajectory during the forecast period, with China contributing a major share in driving the market growth across the region. Japan holds a significant position in cloud adoption owing to the availability of in-country infrastructure provided by established cloud providers such as Amazon Web Services (AWS), IBM Corporation cloud services, and others. Government programs such as the ‘Digital India Initiative’ especially for digitization and cloud infrastructure development are likely to create unprecedented market opportunities across the region.

The e-commerce services in Europe are dependent on four main factors including e-regulations, digital transactions, and Innovations & Ecommerce Trustmark. According to the European E-commerce Report 2019, the online shopping percentage of customers across European countries ranges from 22% to 88%. The report also states that B2C e-commerce growth in the region is forecasted to surge by 13% in 2019. The statistics show that the early adoption of cloud-based solutions has fueled this market growth in the region.

Apart from this, the Middle East and Africa market for this is projected to exhibit moderate growth during the forecast period. According to GSMA Intelligence’s mobile internet connectivity report 2019, there was 44% mobile social media penetration in 2018 across the Middle East and Africa region. This shows that mobile internet adoption and social media usage continues to grow across the region. This is likely to create lucrative market opportunities for the key players. Also, substantial investments by the telecom operators have accelerated the 4G coverage, supporting market growth in the region. Latin America market is expected to have a stagnant growth owing to the administrative and ICT infrastructure inefficiencies.

KEY INDUSTRY PLAYERS

Salesforce.com, Inc. to Extend Services Offering as Part of Its Business Strategy

Salesforce.com Inc.’s comprehensive cloud service offerings include sales and service cloud, marketing and commerce cloud, Salesforce platform, and others. These solutions offered by the company enable the retailers to unify customer experience across all the efficient commerce channels including mobile, web, social, and store. Salesforce Commerce Cloud solutions embedded with AI capabilities deliver an enhanced shopping experience and help companies to drive robust revenues from the customers as well as increased customer engagement and achieve loyal customers. The company intends to extend its existing service offerings. For instance,

• June 2019 – Salesforce.com Inc. introduced the MuleSoft Accelerator platform for Salesforce Commerce Cloud. MuleSoft Accelerator comprises of pre-built integration templates that enable the online retailers to deliver connected customer experience. The platform enables retailers to deploy new commerce experiences with chatbots, product configurators, and social marketplaces.


• January 2019 - Salesforce.com Inc. announced a new range of innovations across its platform that enable the companies to leverage the next generation of commerce experiences including visual search, inventory availability services, artificial intelligence, and others. These advancements in commerce cloud empower the companies to integrate commerce experiences with customer touchpoints through mobile, voice, or social applications.

Key Players Continue to Introduce New Products While the Contenders Enter into Strategic Partnerships

The market key players such as SAP SE, IBM Corporation, and Oracle Corporation are introducing new products because of substantial investments in advanced technologies. On the other hand, the contenders such as Magento Commerce and BigCommerce continue to enter into strategic partnerships with other players to strengthen market position and achieve robust brand publicity. For instance,

• October 2018 – SAP SE released the SAP Upscale Commerce solution. SAP Upscale Commerce solution is a software-as-a-service (SaaS) developed on the cloud platform of SAP and it is specifically designed for consumer-packaged goods (CPG) industry, mid-sized businesses, and direct business to consumers (B2C) businesses. The mid-market solution integrates artificial intelligence and delivers enhanced mobile shopping experience and also provides a seamless online in-store experience.


• June 2019 – IBM Corporation introduced AI Now for connected commerce. AI Now offers enhanced capabilities such as AI-optimized compound order and inventory management, omnichannel commerce supported by intelligent order management, and improved personalization to maximize customer lifetime value.


• April 2018 – Magento Commerce partnered with Deutsche Post DHL Group to drive commerce innovation by providing merchants with enhanced and flexible shipping options to enrich end-to-end customer experience.


• October 2019 – BigCommerce partnered with Deity, a microservice oriented platform.  Deity launched Deity Falcon, its progressive web apps (PWA) for BigCommerce. The PWA will enable the enterprises to deliver seamless selling experiences across a multitude of channels, reducing time-to-market and development costs.

List of Key Companies Profiled:

• Apttus Corporation


• BigCommerce Pty. Ltd. 


• Digital River, Inc. 


• Elastic Path Software, Inc.


• Episerver


• IBM Corporation


• Magento


• Oracle Corporation


• Salesforce.com, Inc.


• SAP SE


• Sitecore


• VTEX

KEY INDUSTRY DEVELOPMENTS:

• December 2019 – SAP SE and Minsait, a digital transformation consultancy, released the integration of the Onesait hospitality solutions by Minsait with the travel accelerator, especially for the SAP Commerce Cloud solution. This integration enables hotel chains to serve new products and services to the travelers available in a single commerce system across several commerce channels such as web, mobile, and social websites. 


• March 2019 – Episerver partnered with Branding Brand, a mobile commerce engagement platform. The partnership intends to expand progressive web apps (PWA), store technology support, and native technology to the retail customers of Episerver.

REPORT COVERAGE

The commerce cloud market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. The report examines various paradigm shifts associated with the transformation of software. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2016 - 2027
Base Year	2019
Forecast Period	2020 - 2027
Historical Period	2016 - 2018
Unit	Value (USD billion)
Segmentation	By Component Platform Services
By Enterprise Size Small and Mid-Sized Enterprises (SMEs) Large Enterprises
By Application Grocery and Pharmaceuticals Fashion and Apparel Travel and Hospitality Electronics, Furniture, and Bookstore Others
By End-use B2B B2C
By Region North America (the U.S. and Canada) Europe (the U.K., Germany, France, Switzerland, and Rest of Europe) Asia-Pacific (Japan, China, India, Southeast Asia, and Rest of Asia-Pacific) Middle East & Africa (South Africa, GCC, and Rest of the Middle East & Africa) Latin America (Brazil, Mexico, and Rest of Latin America)