The Booming E-commerce Sector and Its Forecasted Growth by 2025
In this guest article, Jerico Lugo, Media Relations Manager at SavvySME, takes a closer look at the eCommerce sector and the growth its set to achieve by 2025.
While the world has lived in an ever-traditional way of transacting for centuries, the e-commerce sector is now managing to break through the mainstream sales channel. Hastened by the pandemic, online shopping sites and apps such as Amazon and eBay in the Americas, Taobao and Alibaba in China, and Shopee and Lazada in Southeast Asia have grown exponentially in the past two years since the Covid-19 Pandemic started.
In 2022, where almost all countries are getting more stable and opening up, smaller business owners can’t help but think and ask in the business community platform SavvySME, “Is e-commerce dead. Will it die soon?” The question is with respect to other big companies still not making money or barely breaking even, the world opening up, and going back to how they were pre-pandemic.
Brad Lyons, SavvySME’s Top Influencer in E-commerce said that it is not dying as anyone can set up a store on different platforms for free; the issue is that people try to sell cheap products with very low quality and sell them at a big markup.
On large companies not earning yet from it, he added: “Large companies are very slow to change, mainly due to internal red tape. Smaller companies don’t have that issue so can change/adapt a lot faster. Large companies are looking for large profits with little effort. This means smaller companies willing to actually do some work can succeed. Larger companies have the ability to buy out smaller companies, this is an easy way for them to develop with little effort.”
According to Jef Lippiatt, SavvySME Top Influencer in Email Marketing: “E-commerce is definitely not dying. It is expanding especially in mobile purchases (from phones or tablets). There has been a bit of a resurgence in physical stores, but online shopping is not going anywhere.”
To see where e-commerce really stands, researchers looked into what Statista and Euromonitor International — two of the world’s biggest consumer report databases — have to say regarding the matter.
On one hand, according to Megatrend: Quantifying Digital Living (Euromonitor International, November 2021), e-commerce sites are standing strong by saying that the e-commerce sector has the second strongest CAGR over 2020-2025. He added: “E-commerce sales will account for 51% of absolute growth in retail.”
From the same study, it is said that the US is the biggest spender digitally with over USD600 per capita in 2020, followed by the UK, South Korea, and Australia spending over USD400 per capita, and then by Sweden with over USD300 per capita.
It is also worth noting that while India, Nigeria, Egypt, the Philippines, and Vietnam have some of the most attention in terms of digital spend in smaller markets, they still are far behind the world’s most sophisticated and developed countries.
On the other hand, not even half of the forecasted growth by Euromonitor International, Statista, in its E-commerce Worldwide: Statistics & Facts (February 2022) said that the forecasted growth in retail with respect to e-commerce for 2020-2025 is at 24.5% only.
Statista pointed out that mobile is boosting the e-commerce traffic and said: “One of the most visible trends in the world of e-commerce is the unprecedented usage of mobile devices. In 2021, smartphones accounted for almost 70 percent of all retail website visits worldwide, although desktop and tablet visits generated higher conversion rates in 2020.”
Statista also said that the Covid-19 greatly influenced this growth as millions of people stayed home from early 2020.
Since the world is opening up again, but has already experienced the convenience of online shopping, it is said that it may continue but at a relatively slower pace. Nonetheless, e-commerce is here to stay and is likely to give your business a great point of sale.