For e-commerce entrepreneurs, finding a target market to start a new venture is challenging. That’s because most sectors are already saturated with competition, and, in many cases, that competition is fierce. That goes double for any market that’s serviced by e-commerce giants like Amazon, Walmart, and eBay.
There is, however, one market that has stood out – one that has seen explosive growth for some time and that shows no signs of slowing down: the market for CBD products. Already, industry analysts have projected that it’s a market that will be worth $20 billion annually by 2024. Based on the industry’s trajectory, though, that projection may prove to be conservative.
That’s a big reason that the CBD market should be an appealing one for e-commerce entrepreneurs. Another is the fact that there’s already plenty of solid strategies for growing an online CBD brand that have proven successful in the field. And, if those reasons weren’t compelling enough, there’s also a growing body of evidence to suggest that right now may be the perfect time to start an online CBD venture, and it’s an opportunity that may never come again. Here’s why.
The Shape of a Downturn
Right now, the sudden and dramatic shock to the global economy that’s being wrought by the coronavirus (COVID-19) pandemic is decimating retailers of all kinds around the globe. The same has been true for health stores and other retail outlets that carry CBD products and related items. The forced business closures ordered around the world to slow the spread of the virus are the primary culprit, but there’s a deeper issue.
It’s that consumers have been changing their spending habits and pulling back from purchasing discretionary items as they see their incomes dwindle or disappear completely. The available data demonstrates that while consumer spending has shifted away from brick-and-mortar retailers and to e-commerce sites, the overall level of spending has dropped significantly. On top of that, consumers are increasingly opting for cheaper versions of necessary items, reflecting the insecurity that they feel.
CBD E-Commerce Showing Strength
Despite the economic woes, there’s evidence that suggests that the online market for CBD products is not only weathering the coronavirus storm but that it may be continuing to grow. Big CBD firms are reporting higher-than-normal sales as they absorb the consumers resorting to digital purchases who would ordinarily make their purchases in retail outlets. There’s even evidence that it’s a phenomenon that’s defying the broader trend of consumer cutbacks, with high-end CBD firms like OrganicCBDNugs posting strong results despite their focus on the premium end of the market.
A Market With Long-Term Potential
A deeper look at the situation may offer some clues as to what’s happening. A survey by industry research firm Brightfield Group reveals that consumers, despite the economic situation, continue to prioritize CBD purchases. More than that, a significant number of them expect to use even more CBD products as they ride out the pandemic. A full 39% of respondents said as much in early March.
The reasons cited by consumers centered around the need to manage their anxiety, depression, and insomnia – which are effects of the pandemic that can’t yet be quantified. Even now, though, mental health experts are reporting a sharp rise in such problems in the US and elsewhere, and they expect the situation to get far worse. On top of that, there’s even clinical evidence that children might suffer long-term psychological stress as a result of the pandemic, which would point to a shift in consumer priorities that’s going to outlast the coronavirus.
A Unique Confluence of Events
For all of the above reasons, there couldn’t be a better time for an entrepreneur to launch an online CBD brand and start building a business. Those that do so now will be entering a market with very little brick-and-mortar retail competition and will be selling a product that is still posting sales growth despite (or perhaps because of) the current economic conditions created by the coronavirus.
In short, this is a golden opportunity that’s happening only because of a unique confluence of events that’s unlikely to repeat itself in any of our lifetimes. In addition, the current situation seems to be paving the way for even larger long-term growth in the CBD space that will leave plenty of room for new entrants to carve out a niche and make a name for themselves.
The bottom line is that this moment represents the kind of rare opportunity that fortunes have been built upon. For any savvy entrepreneur, that should provide all the impetus that they need to jump in and get to work. Or, they might find themselves looking back on this time and wondering why they didn’t read the hemp leaves sooner – or why the contents of this article didn’t spur them to strike while the iron was hot.
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