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Here, I will explain how attractive EC in the United States is from an economic point of view, focusing on three points.
Recently, there have been a series of bank failures in the United States, and there are growing concerns about the future.
Point 1. GDP is five times that of Japan! Strongest economic power
The United States is the world's largest economic power. Let's take a look at how big the US economy is compared to the rest of the world, Japan, and what factors contribute to its strength.
Chart 1 shows the GDP share of major countries. America's GDP accounts for 24.2%, which is about a quarter of the world's total, 4.7 times that of Japan and 1.3 times that of China. In recent years, China has been catching up to the top position, but according to a trial calculation conducted by the Japan Center for Economic Research in December 2022, the growth rate of China's GDP has fallen short of that of the only child, which had been implemented until recently. It is predicted that the economy will slow down in the future due to the influence of government policies and will not overtake the United States, and the view that the United States will continue to occupy the top spot is growing. (*1)
Chart 1: Global GDP share (2021)
Source: World Bank
Then, what is the source of the strength of the US economy? There are many factors, but if you compare it with Japan, I think that there is a rich soil for venture investment and innovation that leads from it.
According to a survey by the Nikkei Shimbun, American venture investment accounts for 62% of the world's, and is said to be 100 times that of Japan (*2). In contrast to Japan, which has limited investment due to the corona crisis, the difference between the United States, which has expanded investment with the tailwind of monetary easing policies during that time, is even more pronounced. Venture investment does not necessarily lead to success, but it can be said that start-up companies that incorporate innovative technologies have the potential to quickly gather funds and excellent human resources and dominate the market. Cultivating seeds for building new business models will lead to future economic growth, and it is no exaggeration to say that the willingness to invest is what underpins the strong US economy.
Point 2. US Population Growth by 2100, China and Japan About Half
Population is the basis of economic power. As a country of immigrants, the population of the United States is expected to continue to grow, supporting economic expansion. This is in contrast to Japan and China, whose populations are declining.
Chart 2 is the future population forecast announced by the United Nations. The US population is projected to grow by 15% by 2100 from the recent 340 million. On the other hand, China's population is expected to decrease by 47% from the recent 1.44 billion to 2100, and Japan's population is expected to decrease by 30% from 120 million. In the United States, as in other countries, the birthrate is declining. However, immigration will make up for this decrease, supporting economic activity. The United States has a foundation for accepting diverse cultures, and is home to many first-class universities and companies that attract the world's best talent.
Chart 2: Population projections for the United States, China, and Japan
Source: United Nations
Point 3. Even with the financial crisis, the EC market will expand.
From March to May this year, US banks have failed one after another, and there are concerns that we may face a financial crisis similar to the Lehman Shock. How will this affect the future e-commerce market?
Figure 3 shows changes in EC sales in the United States. Although there was a slowdown in 2008 when the Lehman shock occurred, EC sales increased eightfold after the Lehman shock.
Chart 3: EC sales in the US
Source: US Department of Commerce
In a recession, the EC market, which can be expected to offer low-priced products by suppressing operating costs rather than purchasing at physical stores where labor costs and store operating costs are passed on to the selling price, will become more active. possibility to do so. In fact, in cities with high prices such as New York and San Francisco, it is often cheaper to buy from EC than from retail stores. g
Figure 4 shows changes in US retail sales to date. Although there may be temporary declines due to economic trends, in the long run it is expected that personal consumption in the United States will continue to rise.
Chart 4: US retail sales
Source: US Department of Commerce
Summary
The US economy is the main player in the global economy, and the EC market is expected to continue expanding.
I think the US market in the EC business is an attractive market with great opportunities in the future.
Point 1. GDP is five times that of Japan! Strongest economic power
Point 2. US Population Growth by 2100, China and Japan About Half
Point 3. Even with the financial crisis, the EC market will expand
*1 "China's GDP Difficult to Exceed US", Japan Center for Economic Research, December 14, 2022https://www.jcer.or.jp/jcer_download_log.php?f=eyJwb3N0X2lkIjo5OTQyNCwiZmlsZV9wb3N 0X2lkIjo5OTQyMX0=&post_id=99424&file_post_id=99421
*2 ``Japan's venture investment amount is 1/100th that of the United States'' Nikkei survey, analysis of 70,000 companies Nikkei Electronic Edition May 7, 2022
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