The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
This article was originally published in Forbes.
The most important retail trend fueled by COVID-19 was the continued rise of e-commerce. This growth is likely to continue even as vaccine distribution provides hope for a return to normalcy. In fact, 74% of global retail and consumer brand professionals said they expect the crisis-led rise in online shopping to become permanent in an October survey fielded by Euromonitor International.
E-commerce has been the fastest-growing channel over the last decade, with the crisis accelerating such shifts. Euromonitor International projects that half of the absolute value growth for the global retail sector over the 2020-2025 period will be digital. That equates to USD1.4 trillion in absolute value growth as more goods are sold online. To put that projected e-commerce growth in context, that would be roughly the size of the total value of products sold across all retail channels just five years ago.
China and the US will account for 55% of that value growth in e-commerce opportunities, which is to be expected from the largest e-commerce markets globally. From a percentage growth perspective, Latin America, an emerging e-commerce region, saw e-commerce adoption accelerated due to the crisis as more consumers shopped online to obtain necessities.
E-commerce in Latin America has long lagged behind other regions due to its large unbanked population, weak postal systems and consumer distrust of the channel, as well as other factors. COVID-19 led companies to make bigger investments in digital, including developing the website experience, adding direct-to-consumer operations and partnering with delivery services. Many turned to social media platforms like Instagram, Facebook and WhatsApp to facilitate interactions. For example, Walmart now allows consumers in Mexico to order products via WhatsApp.
These efforts helped Latin America post the strongest growth of any region with a 60% jump in goods sold online in 2020. MercadoLibre was one of the biggest corporate beneficiaries of the digital shift in Latin America. Euromonitor expects Latin America to continue growing during the forecast period, propelled by Mexico, which is narrowing the gap between itself and the region’s largest e-commerce market, Brazil. Traditionally, spend in the travel sector drove e-commerce in Mexico, but the desire to shop online out of safety concerns led consumers to overlook some of the hurdles like fraud and logistics that had previously dampened online sales.
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