Existing Infrastructure Could Support $77.7 Billion More In E-Commerce
This article originally appeared on Forbes.com
Besides shopping more in already-familiar categories, consumers turned to e-commerce for a range of categories for the first time during the pandemic, permanently increasing the number of e-commerce shoppers. New shoppers, specifically baby boomers, also came online for the first time, driving the boom in researching products and services online, according to consumer survey data from Euromonitor International.
The big unknown in the industry today is what portion of this e-commerce spike will remain post-pandemic. According to Euromonitor International’s Voice of the Industry: COVID-19 Survey, 64% of industry professionals surveyed in July thought COVID-19 would drive a permanent increase in online shopping, up from 54% of those surveyed in April. E-commerce will remain a key growth opportunity for brands and retailers, underscoring the need to identify which countries and categories are best positioned to retain the surge in e-commerce unfolding globally.
Euromonitor International’s E-Commerce Readiness Model* shows that the retail market globally could support more than $77.7 billion in additional e-commerce sales without further infrastructure expansion. Industries currently with relatively low e-commerce sales like fresh and packaged food as well as alcoholic drinks have potential for significant movement toward online sales ($38.5 billion globally), while other more developed e-commerce industries like apparel ($3.4 billion globally) still show prospects for growth.
In a similar capacity, countries at varying stages of e-commerce maturity point to continued prospects for online shifts. From developed online markets like China and the US to emerging markets like India and Brazil, there is room to grow in nearly all geographies.
Euromonitor’s E-Commerce Readiness Model identified Germany as the most under-indexed country for beauty and personal care, both in share of e-commerce sales as well as the sales potential. Based on Euromonitor’s proprietary model, Germany could have achieved around $400 million more sales of beauty and personal care products through e-commerce in 2019. Of the additional $389 million that the beauty market could have supported through e-commerce in 2019, approximately 30% would have come from skin care.
With e-commerce continuing to spike due to the COVID-19 pandemic, companies need to better understand which countries and categories are likely to see sustained e-commerce growth to make investment and resource allocations accordingly. This model helps companies anticipate long-term e-commerce growth, even after the pandemic subsides.
*The E-Commerce Readiness Model uses a Gradient Boosting Machine methodology that leverages more than 280 socioeconomic variables to identify market conditions that are most related to a higher share of e-commerce sales. The model then uses 7,000 data points that measure e-commerce sales by category and country as of 2019, in order to predict which markets will most likely support sustained e-commerce growth.