The explosive acceleration of global E-Commerce over 2020 and the beginning of 2021 was difficult to ignore as millions of consumers worldwide shifted from visiting in-store shops to online retail. Global E-Commerce has become a necessity and brands have been forced to adapt to certain changes.
From consumer behaviour to demand prediction, the global pandemic has sped up every aspect of online retail. With consumers increasingly adapting to the new reality and strongly relying on E-Commerce, it is predicted that 95% of purchases will be made via E-Commerce by 2040.
How the pandemic has impacted global E-Commerce
Retail, like many other sectors, was affected strongly by the implemented restrictions across the world. Thus, E-Commerce has positioned itself as an alternative way for consumers to continue their shopping habits. With brick-and-mortar stores being shut, consumers flocked online to continue their purchases – this is one of the main reasons why E-Commerce is growing. In fact, experts say that there has been a radical turn in consumer behaviour, with internalising new ways of shopping from their mobile phones and processing their payments in one click.
According to eMarketer, the global E-Commerce market is expected to total $4.921 trillion in 2021. Moreover, this projection is showing rapid growth over the next few years, showing that international E-Commerce is becoming a profitable option for retail entrepreneurs. Thus, two years ago only 13.8% of retail sales were made through online stores; while this year, the number of online purchases is expected to reach 19.6% and will extend to 24.5% by 2025.
As the world’s largest E-Commerce market, China has witnessed an explosive growth of revenues, with just under the $2.8 trillion mark and continues to lead the global E-Commerce market. It also has the world’s most digital buyers, with representing 33.3% of the global total. Furthermore, China is becoming the first country in the world, which transacts more than half of retail sales online. After China, the second-largest E-Commerce market is the United States, which is forecasted to reach over $843 billion in 2021. Three other countries in the top five E-Commerce markets: the United Kingdom is estimated to bring $169 billion, Japan - $144 billion and South Korea - $120 billion in 2021.
Thus, the well-known marketplace brands have seen strong growth since 2020. According to eMarketer, Amazon unsurprisingly is the leader across other marketplaces, with the reported revenues of $368 billion and with an annual rise of 37.6%; while eBay reported just an 18.9% rise in annual revenue. Other top performers include the US-owned home furnishing marketplace Wayfair, which experienced a 55% year-on-year revenue increase due to high demand amongst consumers for home redecoration during the lockdowns.
E-Commerce Payment Trends
When it comes to online purchases, debit and credit cards (50% of total digital payments) continue being the primary payment methods by consumers. Having the strong brand recognition of major payment cards such as Visa and MasterCard, with their advanced anti-fraud technologies, namely 3D Secure; the cards will remain the predominant payment option for E-Commerce. Nevertheless, more E-Commerce businesses are integrating other popular payment methods to their online stores to eliminate abandoning purchases at the last minute. Thus, digital wallets (32% of total online payments) are emerging as another key payment option for E-Commerce transactions and can help address consumer fears about sharing card details directly with merchants. Having multiple payment options means that an online store can offer products or services to a global audience. The latest data shows that 55% of online shoppers made cross-border purchases in 2020, which were caused by disruptions of items in stock at home. However, it is predicted that consumers will continue making purchases from cross-border E-Commerce stores even after some kind of normality returns to our lives. Furthermore, we might expect that the majority of E-Commerce businesses will integrate a wide range of payment methods, which will differ from country to country and the accepted currency. Thus, Chinese customers would be offered AliPay or WeChatPay, European – Apple Pay, Klarna, GooglePay or American Express.
· The global pandemic and restrictions across the world accelerated E-Commerce growth, reaching 17.8% of total retail sales in 2020. Moreover, the global E-Commerce market is predicted to rise even after some normality returning in our lives; and E-Commerce will reach 24.5% (approximately $7,385 trillion) by 2025.
· China is the leader of the global E-Commerce market, with revenue just under the $2.8 trillion mark as more than half of retail sales transactions are made online. Other countries with leading E-Commerce sales: the United States, which is forecasted to reach over $843 billion in 2021, the United Kingdom is projected to bring $169 billion, Japan - $144 billion and South Korea - $120 billion in 2021.
· Amazon is the leader across other marketplaces, with the reported revenues of $368 billion and with an annual rise of 37.6%.
· 50% of online customers prefer debit and credit card payment methods, while other 32% of online buyers use digital wallets.