ECommerce has had a major influence on the world economy, but how will it continue to evolve?
Digitization is reshaping the world. ECommerce has been hugely influential as the world reels from the effects of the pandemic. Digital trade has been one of the shining lights in the crisis. It has contributed to international trade with cross-border sales rising from 17{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} in 2016 to 23{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} in 2018. Worldwide, there are 1.45 billion people who shop online.
What might be surprising to learn that much of this innovation is coming out of African nations, with public-private partnerships forming to ensure that essentials can be delivered using digital systems? Digital trade is reshaping trade patterns, with Asian and African nations leading the way as suppliers.
To be successful eCommerce depends on information infrastructures and telecommunications. In nations where there is stable and cost-effective internet access, online shopping tends to have higher success rates as an emerging industry. Another factor in the rapid rise in online shopping is the development of supporting technology. Wearables and smartphones have made it easy for people to make payments, and shop from anywhere.
And while it is the US consumer market that is making the highest purchases, it is China and countries in Africa that are making money. The eCommerce market in China is the largest in the world with a volume of US$1.94 trillion last year. That is plus 27{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} year over year and a quarter of China’s total retail sales volume. China’s eCommerce sector is more than three times the size of the US market, which ranks second.
According to Statista, the total value of eCommerce in Africa reached US$16.5 billion in 2017 and is predicted to reach US$29 billion by 2022, with three countries dominating the industry on the continent; Nigeria, South Africa and Kenya. The three combined account for more than half of the online shoppers in Africa in 2017.
- Revenue in the eCommerce market is projected to reach US$19,857 million in 2020.
- Revenue is expected to show an annual growth rate (CAGR 2020-2025) of 15.5{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06}, resulting in a projected market volume of US$40,758 million by 2025.
- The market’s largest segment is Fashion with a projected market volume of US$6,156 million in 2020.
- User penetration will be 24.0{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} in 2020 and is expected to hit 39.5{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} by 2025.
- The average revenue per user (ARPU) is expected to amount to US$70.66.
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