Global e-commerce deal activity is headed for a decline globally in 2016, and dollar funding is on pace for its worst year since 2012.
China and the US market, for example, are on pace for deal declines this year.
However, there are bright spots for deal volume. India is an increasingly important contributor to e-commerce activity, with a large proportion of those deals going to early-stage companies, according to CB Insights. Based on the current run-rate, Indian e-commerce companies — which now account for one-fifth of e-commerce deals globally — may see a record deal high this year.
We define e-commerce as companies using websites or mobile apps to sell physical goods, as well as e-commerce enablement companies that build these sites and apps. We excluded companies focused on services, such as Uber, or those delivering food and groceries (see our food delivery category for trends there).
Deal share by country
US-based companies have dominated e-commerce since 2012 accounting for 47% of global deals. India follows with 12% of deals, while China, Germany, and the UK captured 5% deal share each. Canada saw 2% of deals, and all other countries contributed the remaining 25%. Overall, more than 60 countries have seen e-commerce deals since 2012.
Dollar share by country
The US share of e-commerce dollars (24%) is weaker than its 47% of global deals. China takes over the top spot in funding, taking 30% of global e-commerce dollar share. Driving this trend, Chinese companies have raised 33 mega-rounds since 2012, including a $2.8 billion growth equity round to China Internet Plus Holding, a $700M private equity round to Jingdong, and a $700M Series D to Meituan.
In contrast, the largest US deals topped out at $500M (a $500M Series B to Jet.com and a $500M Series C to Wish). US startups raised 15 mega-rounds since 2012.
India took third place with 17% dollar share. Indian companies raised 16 mega-rounds since 2012, 12 of which went to just two companies — Flipkart and Snapdeal.
Annual deal share by country
The US share of global e-commerce deals declined since 2012. In 2012, US-based companies attracted 54% of 2012 deals, but only 41% in 2015, and 39% in 2016 year-to-date.
Most of the share lost by the US market has gone to India. Indian companies represented 8% of deals in 2012, but 16% in 2015, and 21% in 2016 year-to-date. China’s deal share peaked in 2015, with 8%.
Deal count by top three geographies over time
The chart below illustrates the differential between the US and its nearest competitors in deal count. In 2015, however, both India and China both increased deal count while the US dropped from its 2014 peak.
In fact, in 2015 Indian deals jumped 124% to a new high of 148. This year, India is on track to surpass that record.
Despite last year’s drop, the US has seen over 350 deals every year since 2012. However, it may fall below the 350-mark this year, based on current run rate. To date this year, we have seen 150 US deals, 80 deals in India, and 19 in China.
China sees more later-stage deals
Our data on e-commerce deals within each country shows that Chinese deals tend toward Series A and B companies, while the US and India see a high proportion of deals to seed/angel companies, with India seeing 53% of deals going to companies at that stage (compared to only 7% in China).
China also has the highest share of Series C, D, and E+ deals. The US has the highest share of deals in the “other” category, which includes convertible notes and corporate minority rounds.
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