Dhaka, Thursday, 21 January 2021

Rising income to fuel global e-com markets, China leads the pack

Rising income to fuel global e-com markets, China leads the pack

Apparel Desk: Accounting for over 82 per cent of total global retail ecommerce sales, the top five retail ecommerce markets will reach roughly $3.563 trillion this year. These markets will represent more than 85 per cent of worldwide retail ecommerce sales by the end of 2022.

Topping this list will be China, whose retail e-commerce sales will grow over 30 per cent to reach nearly $2 trillion in 2019. The second spot will be occupied by the USA, whose retail ecommerce market will reach $600.63 billion in sales. The UK sales will reach $137.08 billion while the retail ecommerce sales growth in Japan and South Korea will increase by 4.0 per cent and 11.1 per cent respectively.

The current share of each of these countries’ is influenced by their growth in exports, as well as heavilyentrenched methods for online payments—Alibaba with Alipay in China, Amazon with high credit card use in the US, and Rakuten with Rakuten Pay in Japan. Additionally, the continued expansion of luxury goods being sold online has played a supporting role.

Factors driving growth in each country

Driven predominantly by increasing use of online shopping in rural areas and rising income, China, with 55.8 per cent, has the highest share of ecommerce retail sales worldwide. This is partly due to its large population (1.4 billion) and the explosive growth of middle class. The country’s ecommerce landscape is dotted with powerful pure-play etailers like Alibaba andJD.com, as well as traditionally offline players such as Suning and Gome.

High-performing retail ecommerce categories like computer and consumer electronics as well as apparel and accessories drives growth in the US e-commerce market. This year, computer and consumer electronics will account for 21.7 per cent of total retail ecommerce sales. Apparel and accessories category will increase 20.4 per cent to $122.76 billion. By the end of the forecast period, computer/consumer electronics and apparel/accessories will reach $190.31 billion and $181.20 billion in sales, respectively.

The UK sales growth will be driven by Amazon’s burgeoning presence in the country’s neighboring markets. The platform’s sales will ultimately benefit overall consumerism in the UK. Prime will be at the core of Amazon’s European expansion. As per Periscope by McKinsey, more than half internet users in Italy, Germany and the UK have a Prime account as of July 2018.

With 4.0 per cent growth, Japan will be the smallest of the top five retail ecommerce markets, largely because of the country’s slower domestic demand from its aging population. However, the country’s increasing exports are likely to push retail e-commerce growth.

With domestic demand-based limitations similar to those in Japan, South Korea can expect continued growth in exports to its Southeast Asian neighbors. This will occur as incomes rise in these countries and buyers become more comfortable with online shopping.

Ecommerce will thus continue to represent higher and higher share of retail spending as rising incomes will to fuel online shoppers’ appetite for more expensive goods.