The boom in e-commerce sales has been one of retail’s most notable developments since the advent of the Covid-19 pandemic, but one firm now says the online flurry surpassed even its own midyear expectations.
According to eMarketer’s Global Ecommerce Update 2021 report, worldwide e-commerce sales saw a 27.6 percent growth rate, with total online sales surpassing $4 trillion for the first time. Overall, 18 percent of all retail sales took place via e-commerce in 2020.
The total—a whopping $4.28 trillion—comes in ahead of anticipated global e-commerce sales of $3.91 trillion that were projected in June, after the pandemic forced many businesses to close physical stores worldwide. The June eMarketer report indicated that e-commerce would decelerate to a 16.5 percent growth rate in 2020, down from 20.2 percent last year.
The 27.6 percent number is similar to the full-year growth projections of at least 25 percent from FTI Consulting released in October, and likely beat anticipations with the help of a 19.2 percent gain in online sales in December, as calculated by the U.S. Census Bureau.
However, the continued e-commerce push couldn’t prevent total worldwide retail sales from declining throughout the year. Retail sales across channels saw a dip of 3 percent to $23.84 trillion, eMarketer said, as only essential businesses such as mass merchants, grocers and drug stores among others remained open during the period of mass store closures.
The future does look more promising—eMarketer predicts overall worldwide retail will rebound to 5.1 percent growth in 2021.
“We anticipate that consumers will maintain many of their newfound digital behaviors in 2021,” said Ethan Cramer-Flood, eMarketer’s forecasting writer at Insider Intelligence and author of the report. “However, with so much growth shifted forward into 2020—and with a full year of relatively normalized brick-and-mortar commerce—2021’s growth rate will decelerate to some degree, despite the enduring enthusiasm for e-commerce.”
The firm forecasts that worldwide online growth in 2021 will go back down to 14.3 percent to $4.89 trillion amid the renewed emphasis on brick and mortar, a relatively low number compared with the 2019 and 2020 numbers. The growth still represents $611 billion in additional e-commerce sales.
Going ahead, e-commerce is only expected to get bigger, with eMarketer anticipating that total sales in that venue will reach $5 trillion by 2022 and $6 trillion by 2024. By 2024, online’s percentage of total sales will increase from 18 percent to 21.8 percent.
“All 32 national markets we cover ended up with at least double-digit e-commerce growth in 2020. Latin America saw abnormally standout growth (36.7 percent), despite suffering worse-than-average declines in overall retail sales (a 3.4 percent drop),” said Cramer-Flood. “Argentina’s retail e-commerce grew by an astounding 79 percent last year, a figure approached only by Singapore’s 71.1 percent.”
The Latin American increase was a major step up from 2019, when the region’s online sales totals grew 23.2 percent.
Overall, North America saw e-commerce sales grow 31.8 percent in 2020, while Central and Eastern Europe jumped 39.1 percent. The Asia-Pacific region (26.4 percent growth) and Western Europe (26.3 percent growth) had similar improvements in online sales, while the Middle East and Africa are still lagging at a 19.8 percent increase.
Looking ahead to 2021, it appears China will continue to lead the world in digital buyers with 792.5 million, representing 33.3 percent of the global total, eMarketer said. Yet the market will produce more than half (56.8 percent) of total global e-commerce sales at $2.78 trillion, and is primed to become the first country in history to transact more than half of its retail sales digitally, at a projected 52.1 percent of total sales.
Amazon Prime reels in 30 million U.S. users
The e-commerce expansion comes as online shopping’s largest player continues to bring more consumers on its platform. Consumer Intelligence Research Partners (CIRP) data shows that as of Dec. 31, there are 142 million Prime members in the U.S., with 30 million added throughout 2020.
More than half of Amazon Prime members (52 percent) had an annual membership, up from 49 percent just three months earlier, indicating that more consumers are sticking for the long haul.
“Since Amazon introduced a monthly pay option, Amazon has often seen a jump in monthly memberships in the December quarter,” said Mike Levin, co-founder of CIRP, in a statement. “For the first time in four years, the percentage of annual memberships increased in the holiday shopping quarter. In other words, in the December quarter new and renewing members took advantage of the lower annualized cost of a yearly membership, and with that made a longer commitment to Amazon Prime. These new members will be around well into 2021.”