Is eCommerce Growth Showing Signs Of A Slowdown?

A recent report by Morgan Stanley looked at the future of eCommerce and what to expect from a growth perspective in the years to come.

Analysts predict robust 19 percent growth in the eCommerce space over the next five years due to a litany of positive factors.

The Coming Inflection Point

In the report, Morgan Stanley analyst Katy Huberty discussed the knee-shaped inflection point in the maturation process of technology.

“There is a frequently-observed network effect in technology trends whereby when critical mass of consumers and/or corporations have adopted a technology. Peers tend to see that progress and want to follow suit," she wrote.

In other words, when a technological innovation comes about, a small percentage of brave consumers will serve as “guinea pigs” for the rest of the population. Once the rest of the population is convinced of the safety, efficacy, and benefits of the innovation, they will follow suit.

Related Link: Morgan Stanley Expects A Big Year For This Big Bank In 2015

Analysts believe the inflection point for eCommerce is about twenty percent penetration based on previous trends in smartphone adoption, notebooks, and digital music.

Other Indicators Of eCommerce Growth

Analysts believe a huge driver for eCommerce in years to come will be further penetration of emerging markets. For example, while less than 20 percent of the Indian population shopped online in 2014, Morgan Stanley predicts that more than 50 percent will by 2018.

The focus of commercial real estate spending has recently shifted from storefront property in shopping malls to warehouse storage for online products. The ease of shopping on mobile devices is another driving factor in the future of eCommerce.

Finally, the range of products that consumers purchase online should continue to expand.

Morgan Stanley lists Amazon.com Inc AMZN as a top pick in the eCommerce space.

Disclosure: Wayne Duggan holds a short position in Amazon.