Global online real sales will grow by US$1 trillion within the next four years, according to new projections from research house Forrester.
But the news is less encouraging for retailers within Asia Pacific where the sales boost from the advent of the Covid-19 pandemic will be impacted by slowing consumer spending due to slowing economies across the region.
Forrester says global online spending will increase from $1.5 trillion recorded last year to $2.5 trillion in 2025, representing a compound annual growth rate (CAGR) of 11.3 per cent.
The company measured performance in 11 Asia-Pacific markets – Australia, China, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam — and noted that China remains the largest market globally, accounting for 50 per cent of global online retail sales this year.
Overall retail sales – both on and off line – in Asia this year are expected to decline by 4.7 per cent as consumers spend less on nonessential products and GDP around the region falls at a faster rate than during the 200i financial crisis.
Another significant trend reinforced by Forrester’s research is the role of mobile devices in online shopping within Asia – 75.8 per cent of online transactions will be via mobile this year, a stark contrast to Europe and the US where desktop devices are more frequently used.
“We expect online retail sales by smartphone to grow at a CAGR of 13.6 per cent to reach $2 trillion by 2024,” said Forrester in a statement.
Forrester said social commerce is emerging as a key challenger to traditional online retailers, especially in Asia.
“Covid-19 will fast-track the adoption of social-commerce channels outside China, where more existing and new entrants will experiment with content sharing commerce, membership-based team purchases, reselling, and livestreaming e-commerce,” the company said.
Meanwhile, grocery is the fastest-growing e-commerce category. Covid-19 has given online grocery shopping a boost, with an expected CAGR growth of 30 per cent during the forecast period and online penetration doubling from 5.1 per cent this year to 10.6 per cent in 2024.