Online retailing is expected to almost double its share of total retail sales from circa 10% in 2019 to nearly 20% by 2025, a new report from The Economist Intelligence Unit (The EIU) has predicted.
The EIU estimates that global online retail sales experienced growth of 32% in 2020 to US$2.6 billion, despite the overall retail market contracting by more than 2%.
After a record year, The EIU believes the pace of growth will slow from 2021 but the rollout of Covid-19 vaccines and emergence of new strains will keep social distancing measures in place across many countries for the remainder of this year.
Online shopping is largely being driven by developing markets and the growth of online food and grocery delivery with expenditure on food and beverages up 5% in 2020.
The EIU manager of industry briefing, Barsali Bhattacharyya said in a fiercely competitive sector, there will be winners and losers, depending on retailers’ ability to shift online and retain customers.
“While companies race to capitalise on the opportunities thrown up by the shift online, many will struggle to be profitable,” he said.
“Besides using the latest technologies to keep a finger on the consumer’s pulse, companies will need to explore which markets offer most potential, all the while navigating increased regulatory barriers, as well as cybersecurity and labour risks.”