We expect continued share gains in 2016

　　We forecast global ecommerce growth of 22% in 2016 (decelerating 3pptsfrom 2015) followed by 20% in 2017. Growth is being driven by a variety ofglobal factors including improved ecommerce fulfillment across both pureplaysand store-based retailers, the rise of B2C ecommerce in China, rapidgrowth of the ecommerce ecosystem in developing markets, and decline ofthe traditional retail store front, square footage, and inventories in keycategories. There remains continued divergence in performance acrossregions, as less-than-favorable macro backdrops in countries like Brazil andRussia are impacting core retail sales. All in, we continue to believe onlineshare of consumers’ wallets will continue to grow and potentiallyaccelerate, benefitting pure-plays and well-positioned traditional retailers.

　　Regional snapshots and insights

　　In this year’s report, we take a deeper look at the key regions shaping theglobal ecommerce backdrop. China remains the world’s largest ecommercemarket due to its C2C share, though we expect B2C to drive growth.

　　Competition is increasing in Japan as companies weigh the cost-benefit ofpromotional activities and changing monetization models. Resilient growthin Europe remains supportive as mcommerce grows and companies focuson monetization. India appears to be entering a phase of consolidation asthe venture environment rationalizes and larger companies subsumeresources. A tough macro environment in LatAm is weighing on retail as achange in tax regulation impacts smaller online retailers in Brazil.

　　Key global themes to watch

　　While every market has its own characteristics, we discuss some of the keythemes that we see in the majority of markets: retail in retreat; fulfillmentas a key competitive advantage; and declining venture capital investment.

　　GS global ecommerce top picks

　　Across our global coverage, we believe the best opportunities inecommerce are Amazon, Carter’s, Dollar Tree, Nike, PayPal, Ralph Lauren,VF Corp., JUST EAT, Ocado, Schibsted, Zalando, Alibaba, JD.com,Vipshop, Trusco and Yahoo Japan (Exhibit 3). Alternatively, we rateAbercrombie & Fitch, Bed Bath & Beyond, Foot Locker, Genesco, HibbettSports, JCPenney, and Kohl’s at Sell for their ecommerce challenges.