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The global dropshipping market size is expected to reach USD 557.9 billion by 2025, registering a CAGR of 28.8% over the forecast period, according to a study conducted by Grand View Research, Inc. Rising consumer inclination toward online shopping platforms, coupled with the proliferation of internet users, is anticipated to positively impact market growth. Dropshippers offer services to retailers such as direct transfer of goods to customers and inventory maintenance. Moreover, benefits provided through dropshipping services encourage e-commerce companies to adopt these services, as the shipment of the products/goods is not limited to the internal boundaries of the country and can even offer product deliveries across international borders.

Rising disposable income and increasing internet and smartphone penetration have favored the e-commerce industry, thereby impacting the adoption of dropshipping. Dropshipping enables e-commerce companies to capitalize on warehouse and logistics investments. Moreover, fewer capital investments in inventory and logistics have resulted in an increased demand for dropshipping amongst retailers.

Several e-commerce startup businesses are opting for dropshipping services since fewer investments are required for product warehousing, resulting in reduced shipping and logistics costs. The growing number of online purchases by consumers has enabled the emergence of new e-commerce companies. Inclination of emerging e-commerce companies toward dropshipping business is further generating avenues for market growth.

However, government rules and regulations for product shipment and cybersecurity threats are hindering the market growth. Moreover, the General Agreement on Trade in Services (GATS) comprises rules and regulations governing international trade in services, with significant implications for e-commerce. The Anti-Spam Law is in place to protect consumers from receiving unsolicited marketing material, thereby restraining the growth of the market.

Further Key findings from the study suggest:

  • The electronics and media segment accounted for a market share exceeding 22.0% in 2018 owing to increasing innovations in the electronics industry, coupled with rising demand for electronics
  • The food and personal care segment is expected to register a CAGR exceeding 30.0% from 2019 to 2025, owing to the rising consumer demand for skincare products and cosmetics, among others
  • The fashion segment held the largest market share of over 30.0% in 2018, which can be attributed to the growing disposable income of consumers, coupled with rise in online retail spending among consumers
  • Asia Pacific is expected to witness substantial growth owing to the high percentage of global population and increasing internet penetration, which, in turn, drives the e-commerce industry in the region
  • The dropshipping market is fragmented and characterized by the presence of small- and medium-sized companies. The major global players operating in the market include AliDropship; Doba, Inc.; SaleHoo Group Limited; and Oberlo, Inc.