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10 Best Countries for Opening an E-Commerce Business

countries for ecommerce business

Contents

10 Best Countries for Opening an E-Commerce Business

1. China

2. Japan

3. Singapore

4. South Korea

5. Hong Kong

6. United States

7. Canada

8. United Kingdom

9. Switzerland

10. Germany

Key Takeaways

The global e-commerce market is rapidly growing, offering significant opportunities for entrepreneurs.

Advanced technology, improved logistics, and streamlined cross-border shipping enhance the e-commerce business potential.

Each of the listed countries provides unique advantages, from high internet penetration to favorable tax systems and strong logistical infrastructure.

The global eCommerce market is experiencing rapid growth as global sales are expected to hit $4.891 trillion, marking a 14.3% increase in the previous year.

Many countries have been significantly contributing towards this market growth. 

The eCommerce explosion is largely attributed to the rising use of mobile devices worldwide.

Without the use of mobile applications, consumers and businesses would not be able to buy and sell over the internet so easily.

Now is the best time ever to take your eCommerce business to the next level as you can now benefit from more advanced technology, streamlined cross-border shipping, and logistics.

A forecast conducted by the International Trade Administration states that Global Business-to-Consumer (B2C) ecommerce revenue is forecasted to reach $5.5 trillion by 2027, with a consistent annual growth rate of 14.4%. The leading segments for B2C ecommerce include consumer electronics, fashion items, furniture, hobbies, bio-health pharmaceuticals, media and entertainment, beverages, and food.

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1. China

China is currently the world's largest eCommerce market, contributing to nearly 52.1% of all eCommerce sales worldwide.

China has the biggest portion of global eCommerce size and sales, but it also has quite a dominant leader as the largest eCommerce market in the world, outranking eCommerce transactions in the United States, Germany, France, Japan the United Kingdom combined. 

One of the main reasons why the eCommerce market is thriving in China is the country's leading manufacturing industry, logistic infrastructure, and government support.

Internet usage has also dramatically increased amongst the Chinese population as the country currently has more than 800 million users.

Moreover, these 800 million internet users prefer online shopping, as more than 70% of China's internet users made online purchases in 2018.

China is also home to the eCommerce giant Alibaba, which has developed efficient digital marketing systems and networks to process online orders and delivery.

Alibaba has a huge network of delivery which allows the company to process up to 30 million items each day.

2. Japan

Japan is one of the largest and fastest-growing eCommerce markets globally, contributing to the global growth rate of the eCommerce market by 29%.

The Japanese eCommerce market generated a total revenue of $114 billion in 2020, putting the country right behind the United States. 

The eCommerce market in Japan has been traditionally dominated by business-to-business (B2B) transactions.

However, there has been increasing growth in online store sales of physical goods within the business to the consumer market.

The consumer-to-consumer (C2C) market is also expected to grow as demand for digitally distributed services, such as travel tickets, continuously increases.

JP Morgan has also estimated that eCommerce sales in Japan will continue to expand at an annual growth rate of 6.2%, and the total market revenue is expected to reach $143.297 billion by 2025.

Japan has constantly been ranked as one of the top 5 largest eCommerce markets in the world due to its rapidly growing developed economy, urbanized population, and high internet penetration rate, which applies to both the younger and older population.

Japan's top three eCommerce platforms include Rakuten, Yahoo! and Amazon.

3. Singapore

Singapore has a high tax rate and a requirement for a resident director for a company that can serve as a disincentive to start an eCommerce business.

However, many other aspects make Singapore a rapidly growing financial hub in South East Asia, where the eCommerce gross merchandise value is expected to double to $254 billion, according to the Sync Southeast Asia Report.

There are many opportunities to gain investment from venture capitals in Singapore, which incentivizes setting up an eCommerce business in the country and has contributed to boosting the eCommerce market value.

Another way old and new business owners are benefiting is through the exemptions that may apply to their company depending on its size and revenue, which can lower the corporate tax rate down to 0%.

4. South Korea

South Korea is among the largest eCommerce markets in the world, powered by a population with a 92% internet usage rate.

During the COVID-19 pandemic, GlobalData's eCommerce Analytics reported that over lockdown, the number of eCommerce transactions increased by 22.2% in 2020 and is expected to grow in the following year by 25.4% in 2021.

The largest eCommerce market segments are fashion, sporting goods, toys, cosmetics, and DIY products.

South Korea is also considered one of the top 10 business-friendly and technologically advanced economics globally, which makes starting an eCommerce business in the country an extremely easy and profitable business venture.

5. Hong Kong

Hong Kong has a thriving online market, and the market volume for an eCommerce business is expected to stand at approximately $11 million by 2025.

You can benefit from many opportunities by opening an eCommerce business in Hong Kong as you also have access to Mainland China.

Hong Kong is one of the world's leading digital cities making it a great place for eCommerce as the population is heavily dependent on technology and online shopping. 

The country also offers a favorable tax system to relieve a huge financial burden in terms of taxes as Hong Kong is a highly popular low-tax jurisdiction

Moreover, the country also has a strong logistic infrastructure to meet the increasing demand for online transactions.

This includes highly developed transportation systems, supply chains, and warehousing, ensuring secure storage and easy order shipments.

Lastly, Hong Kong has an extremely easy company incorporation process which is a huge convenience compared to other jurisdictions.

All you need to do is upload the correct documents and fill in the necessary information on the online application to start your eCommerce business.

ecommerce in hong kong

6. United States

The United States has been a strong contender in the leading countries for eCommerce and currently stands as the second largest eCommerce market in the world powered by online giants like Amazon and eBay.

As the most developed market for online shopping, engaging in online commercial transactions to purchase goods and services is a norm for American consumers. 

The US is known for its business-friendly environment due to lower income and corporate taxes, which act as a huge financial incentive for those looking to start an eCommerce business.

Saving up on taxes allows e-Commerce business owners a bigger budget to invest in new software programs and website development to take their online business to the next level.

Some of the leading American eCommerce platforms by monthly traffic include Amazon, eBay, Walmart, Etsy, Home Depot, Target, Lowe's, and Best Buy.

7. Canada

Canada is considered a great place to start an online business as it offers an efficient tax structure, making it easier for businesses to generate revenue and become more profitable.

Due to Canada's increasingly digital population, the country has become a profitable market for those looking to set up an eCommerce business.

In 2021, there were approximately more than 27 million eCommerce users in Canada, making up almost 72.5% of the Canadian population.

This percentage is expected to grow to 77.6% in 2025. 

These figures highlight the number of profitable opportunities there are within the Canadian e-Commerce market, which is currently dominated by electronic and media products.

The biggest eCommerce platforms in Canada include Amazon CA, Walmart CA, and Costco CA, which generate a combined revenue of $1.6 billion and control 40% of the online market.

8. United Kingdom

The United Kingdom is considered one of the top three eCommerce markets globally.

Its annual sales reach $99 billion, which is nearly 14.5% of the total eCommerce global retail sales.

Popular eCommerce businesses include Argos and Amazon UK, where the leading product categories range from travel, fashion, sporting goods, and household items.

Moreover, the company incorporation process is also extremely affordable, easy, and convenient compared to other countries.

Incorporating an eCommerce business is particularly suitable for non-residents who do not carry out their business activities in the UK as they benefit from the favorable tax system. 

Regardless of the size of your eCommerce business, the UK is still an attractive option.

There are multiple e-Commerce platforms where small online businesses have become extremely popular.

These include Amazon Marketplace, Depop, eBay, and Not On The High Street.

9. Switzerland

The UNCTAD's Business to Consumer (B2C) eCommerce Index 2020 has reported that Switzerland has replaced the Netherlands and has secured the highest place amongst 152 countries in their readiness to engage in online commerce.

This is attributable to 97% of the Swiss population using the Internet in 2019, making Switzerland the only non-European economy amongst the countries with the highest internet usage. 

The eCommerce Report Switzerland 2020 further highlights that the country is experiencing a strong internet shopping trend as nearly 10 billion Swiss francs were spent online in 2019.

The study anticipates further growth in the years to come.

As the 21st largest eCommerce market by size and a country quite well-known for its high internet penetration, the revenue generated from the eCommerce market is projected to reach nearly USS 11.6 million in 2021 and is experiencing an annual growth rate of 6.85%.

10. Germany

Germany is another top contender in the eCommerce market, especially in Europe.

The country offers competitive shipping options that contribute to business growth and development.

Annual online sales in Germany are estimated at $73 billion, making up 8.4% of the global eCommerce retail sales.

The country is also experiencing a 5.4% growth rate which is skyrocketing its projected revenue.

The leading products for online shoppers within the German eCommerce market include fashion, electronics, and media.

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Choosing the Best Country for eCommerce Business

The global eCommerce market is a testament to the increase in business innovation, technological advancement, and increased dependence on technology to carry on our day-to-day activities.

This provides a major opportunity for aspiring entrepreneurs looking to start a new online business as the potential for profit and growth is huge.

Let Air Corporate help you register your company in Hong Kong today — no matter your business industry!

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Vivian Au

For many years, I worked at big accounting and company secretary firms in Hong Kong. I started Air Corporate to make the life of entrepreneurs and SMEs easy.

Vivian Au

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