Companies in this industry sell products directly to consumers via the internet, TV, or mail order. Major companies include US-based Amazon, HSN, J Crew, and Liberty Interactive (parent company of QVC), as well as Shop Direct Home Shopping (based in the UK), Otto Group (Germany), Alibaba Group-owned Taobao (China), Flipkart (India), and Rakuten (Japan).
Demand is driven by consumers’ personal income. Profitability of individual companies depends on effective marketing 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 20 companies account for about half of industry revenue.
Products, Operations & Technology
Although internet and mail-order retailers sell a variety of products and services, some of the largest product categories are women's apparel, books, computer hardware and software, consumer electronics, and toys and video games. Many internet and catalog companies specialize in a single product category, but larger companies are expanding offerings to maintain growth and leverage brand awareness. Amazon has expanded from being an online bookstore to offering millions of products across dozens of categories.