It is predicted that eCommerce will account for half of the absolute value growth in the retail sector over the 2020-2025 period.
It is clear that the pandemic has given rise to eCommerce, and this growth is likely to continue. While people were forced to shop online, in many cases exclusively for everything from food to furniture, many people have found the convenience and options for online shopping far more attractive than shopping in stores. Many people are expected to have long term consequences from the pandemic and lockdowns which could inhibit their desire to be in public spaces, and this will also contribute to online shopping numbers. In fact, 74% of global retail and consumer brand professionals said that they expect the rise in online shopping prompted by the pandemic to become permanent.
Euromonitor International predicts that half of the absolute value growth for the global retail sector over the 2020-2025 period will be in eCommerce, equal to US$1.4 trillion in absolute value growth, which is roughly equated to the total value of products sold across all retail channels in the five years before 2020.
China and the US are predicted to account for 55% of that eCommerce growth, forming the largest eCommerce markets.
Latin America has an emerging eCommerce industry that has seen adoption accelerated due to the pandemic. Latin America’s digital market has lagged behind other regions due to its large unbanked population, unreliable postal and delivery systems and consumer distrust of internet sales. The pandemic changed this as people were forced to shop online, and retailers upgraded websites, improved security and invested in the user experience. Many merchants created seller profiles on social media platforms like Instagram, Facebook and Twitter to facilitate interactions. As of January 2021, approximately 16.5 million people in Brazil were registered Twitter users, the highest number in the region. Latin America posted the strongest growth of any region in 2020, with a 60% increase in goods sold online.
It is predicted that Brazil and Mexico will be the two strongest markets in the region for eCommerce in the coming years as various factors bring about change, such as an increase in the number of banked people, improved digital services and secure online shopping.
Apparel and footwear are expected to see the highest absolute growth over the 2020-2025 period, followed by food and drink, according to Euromonitor.
While retail clothing has slowly been increasing online sales prior to the pandemic, grocery sales have always been slower on the whole. However, the pandemic has propelled both categories into a strong growth position.
Digital sales in the retail fashion industry are expected to continue their growth trajectory post-pandemic, increasing in both percentage share and actual terms, though at a slower pace. While the apparel and footwear industry initially declined by 19% in 2020, growth returned in 2021 and is set to continue. While the growth will again slow as retail stores reopen, it is expected that people will continue to purchase clothing and shoes online after experiencing the convenience and range that eCommerce offers, and as websites and security improve, it is likely to become more commonplace.
The eCommerce industry also offers a wider range of business models that are appealing to customers, such as customer direct sales as well as P2P platforms. These models lower costs and even present opportunities to make money. The eCommerce industry provides multiple opportunities for entrepreneurs to launch a successful business.
Retailers and consumer brands now compete on their digital capabilities. About 68% of retailers and consumer brands said that they expect consumers will judge them on their digital platforms post-pandemic, according to a survey.
Brands or merchants that have not been digitally engaged have already felt the effects. Many businesses that were unable to adapt to the rapid changes that the pandemic required have since failed. Those that were fast to adopt changes to work exclusively online were the most successful. The adaptation of brands to the needs of consumers has been able to survive.
Home delivery of groceries and take away food has also proliferated in the year since the pandemic, and the services and range of products are only improving. It provides jobs, keeps vulnerable people safe and improves the overall quality of eCommerce for all consumers. The predicted US$1 trillion eCommerce market expansion is to be due to the clothing and groceries sectors, which have applied themselves to the advancing of eCommerce services.
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