Mumbai: Today, e-commerce, after a surge of investment and adoption during the pandemic, is finding its place in a world where in-person activities are resuming. GroupM has released its e-commerce and retail media forecast that details the socioeconomic factors contributing to the state of this space. According to the study, the e-commerce industry will generate $101 billion in annual revenue this year, a 15 per cent increase over 2021. This, even as pandemic-related lockdowns in China and supply chain bottlenecks there and in war-torn Ukraine have contributed to a drag on growth in the first half of 2022.
The report has been penned down by GroupM’s global director of business intelligence Kate Scott-Dawkins. The study estimates global e-commerce to make up 19 per cent of global retail sales in 2022, growing to 25 per cent by 2027. Global retail media is likely to reach $101 billion in 2022 and will surpass $160 billion in annual revenue in five years’ time. In 2021, retail media ad revenue represented 18 per cent of global digital advertising revenue and 11 per cent of total global ad revenue.
According to the report, 20 of the top global e-commerce companies accounted for 67 per cent of e-commerce sales in 2021. Global e-commerce sales of $5.4 trillion are estimated for this year. Of this figure, China and the US alone is expected to make up 52 per cent. Nearly 61 per cent of the total, $3.3 trillion, can be attributed to only seven markets: the US, China, Japan, Germany, the UK, Canada and Australia.
The top countries’ e-commerce figures are China – with an estimated e-commerce market growth in 2022 of 5.6 per cent, slower than last year’s growth of 10 per cent; and the US, with an estimated e-commerce market growth in 2022 of 25 per cent. Among the major global markets highlighted in this report, only three are forecast to see 10 per cent or lower e-commerce penetration in 2022: Australia, Japan, and Canada.
By 2027, the report estimates e-commerce sales will reach $9.1 trillion. This figure includes sales of autos and auto-parts, as well as gasoline, but excludes food services or catering sales to produce like-for-like comparisons across all tracked markets.
There is no doubt that the pandemic lifted the fortunes of any e-commerce retailer already established or ready to invest in becoming established during the first year of the pandemic. Unsurprisingly, Chinese retailers make up three of the top five retailers by global e-commerce gross merchandise value (GMV), with Amazon and eBay rounding out the other two spots (though Shopify would replace eBay at number five if included). Alibaba is the undisputed leader, with more than double the e-commerce GMV of Amazon. Alibaba has dominated the mobile commerce and payments ecosystem with Alipay (along with Tencent competitor WeChat), and certainly benefited from heavy adoption of mobile shopping during the COVID-19 outbreaks in China in 2020 and the spring of 2022.
Concurrently, global advertising revenue increased by 24 per cent in 2021, which is even more remarkable given that the figure in 2020 was only a two per cent decrease.
Read the full report here.
