Retail E-Commerce Market Size, Share & Trends Analysis Report By Product (Groceries, Apparels & Accessories, Footwear, Personal & Beauty Care), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global retail e-commerce market size was valued at USD 4.25 trillion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2020 to 2027. Increasing usage of smartphones and the convenience of purchasing daily essentials and luxury products from the comfort of home is primarily driving the growth. Moreover, the availability of a plethora of options, lower price compared to physical stores, and technology-enabled online trials of apparel and accessory are some of the other factors contributing to the burgeoning demand for retail e-commerce across the world. Additionally, the internet has revolutionized the retail industry by increasing the reach of retailers from the local area to overseas, allowing the business to reach the expediency of customer and increasing the cross-broader success.

Rising demand for enhanced customer experience with voice recognition is expected to boost market growth over the projected period. Customers are increasingly using smart speakers to place online orders in the U.S. region as orders placed via voice provide more optimized search results. Moreover, augmented reality has gained popularity among retailers and major brands are incorporating these technologies to stand out in the competitive market. E-retailers are also investing in Augmented Reality (AR) to provide an immersive experience to their customers. AR technology helps customers visualize the selected items and is increasingly becoming user-friendly. Hence, enhancement in technology is expected to bolster the market growth.

The evolution of mobiles and the shift from calling to browsing has driven the online retailing along with the rising penetration of internet connections. According to real-time intelligence data, GSMA stated that there are over 9.82 billion mobile connections worldwide, surpassing the world population of 7.77 billion. Rising consumer spending with an increasing number of smartphone users across the world has fueled retail e-commerce demand. As per Newzoo, U.K. has the highest smartphone penetration followed by Netherlands, Sweden, Germany, and U.S. Retailers indulging in online sales of products not only provide a desktop browsing version of the website but are also the mobile view friendly websites to attract more customers and increase the traffic on its website. Further, the penetration of smartphones in small countries and towns is expected to increase the reach of retailers over the e-commerce platform.

The rapid growth of the market for retail e-commerce is also contributed by the advent of technology such as Artificial Intelligence (AI), Chatbot, and Machine Learning. AI and Machine Learning (ML)are helping e-retailers to understand customer demand and thereby, leverage these technologies by making smart product recommendations and personalized guidelines. Chatbots and AI voice assistants are integrated with apps to provide the ease of shopping with real-time interaction. AI technology has further aided in facilitating virtual trials of frames, clothes, and accessories to mimic the look of the product purchased online which has helped the vendor in improving their customer conversation rate.

The concern over the collection and usage of personal data on shopping websites are restraining market growth. While the use of technology is beneficial for the growth of retail e-commerce, the misuse of the same can result in a financial and personal loss for the consumer. Moreover, the ongoing COVID-19 pandemic has led to declining market share for footwear, apparel and accessories, electronic goods, craft supplies, and other product segments owing to lockdown and change in consumer buying behavior across the globe. The temporary shutdown of production and distribution centers is expected to affect market growth. However, the grocery segment has observed an upsurge in demand with the heavy purchase of essential products by the consumers during the pandemic period.

Product Insights

The apparel and accessories segment led the market and accounted for more than 30.3% revenue share in 2019. The demand for apparel and accessories gained maximum traction over the e-commerce platform due to the availability of designer and latest fashion clothes at factory prices. E-commerce retailers increased their customer base by targeting the price-sensitive consumer along with easy return policy for building the trust and cash on delivery facility. Moreover, C2C shopping is further gaining traction with the social media wherein the Facebook “Buy” button, and Instagram checkout allow purchase from other individuals. Also, platforms such as Shopify link their online stores with social media to reach large number of customers.

However, the apparel and accessories market is expected to be impacted during the pandemic over both B2C and C2C platforms as the consumers are currently purchasing only essential products. The impact has been evidently reflected in the U.S. where the apparel industry witnessed declining sales in April 2020 compared to March 2020.

The grocery segment in the market is expected to expand at a rapid CAGR of 13.1% over the forecast period. The demand for online grocery is rising in the current COVID-19 pandemic owing to ease of shopping from home and contactless purchase which is expected to have a lasting effect leading to a permanent behavioral shift towards digital purchases. The market growth is evident from the increase in the sale of grocery which strained the supply and workforce capacity leading to the addition of more workers by vendors such as Walmart, Amazon, Dollar General, and CVS, and Albertsons. The changing mindset during the pandemic is bound to bring structural change in consumer shopping for grocery online which would add into the burgeoning grocery segment growth over the e-commerce platform. Furthermore, the affordable pricing, timesaving, and a plethora of choices in shopping have led to a staggering trajectory across the world and are expected to augment over the forecast period.

Regional Insights

Asia Pacific dominated the market and accounted for over 41.0% revenue share in 2019. The region is expected to witness rapid growth over the forecast period post the pandemic on account of increasing mobile internet usage and changing lifestyles. People are shifting towards urban lifestyles engaging in the more work-oriented culture. Leading to the scarcity of personal time which is further shortened by the need to shop for necessities. Moreover, consumers from Asia are gradually shifting toward purchasing electronic goods over the e-commerce platform. Hence, Asian manufacturers including Lenovo, Motorola, Xiaomi, and OnePlus have been selling their products exclusively over the internet. As China has started to recover from the pandemic, the country will be focusing on reviving its business and overcoming the economic crisis. Additionally, China is also one of the largest markets for C2C vendor-driven by auction and second hand or handmade product selling.

North America is expected to grow significantly over the forecast period. This growth is on account of purchase pattern change, secured internet transactions, and increasing consumer awareness. In 2020, the region has gain prominence owing to the increased online sale between the end of January and the beginning of March 2020. By the end of the first quarter, retailers with an online presence may also benefit from consumer stockpiling. Regional demand was followed by Europe owing to high-speed internet facilities coupled with the well-established supply chain for goods delivery. However, e-commerce is expected to grow with the increased purchase of hand sanitizer, toilet paper, disinfectants, bottled/packaged water, tissue, hand soap, and toilet paper.

Key Companies & Market Share Insights

The prominent vendors competing in the market include Alibaba Group Holding Ltd, Amazon.com Inc.; Inter IKEA Systems B.V.; and Walmart Inc. The companies are offering affordable products to cater to the demand for various goods such as grocery, office supplies, art supplies, footwear, and apparel and accessories among others. Moreover, the vendors have opted for organic and inorganic growth strategies to strengthen their market position. For instance, in May 2019, the e-commerce platform Shopify acquired a New York-based wholesale good selling platform called “Handshake” to expand its service and product portfolio. Furthermore, in March 2020, IKEA partnered with Alibaba to open IKEA’s virtual store on Alibaba e-commerce platform called Tmall, which will help in reaching customers of China.

The companies are engaging in partnerships, mergers, and acquisitions, aiming to strengthen their product portfolio, improve its reach with a better chain across the countries and regions. For instance, In June 2018, IKEA partnered with Adidas, Lego, and Sonos to expand its product portfolio. Also, in May 2018, Walmart acquired Flipkart to expand its reach in the market, while maintaining the Flipkart brand to remain distinct from that of Walmart. Furthermore, in December 2018, Walmart entered into a partnership with Walmart under its revamping strategy to open its first eCommerce store in Japan. The company is strengthening its market position while competing at a global level with giants such as Alibaba and Amazon. Some of the prominent players in the retail e-commerce market include:

• Albertsons Companies, Inc.

• Alibaba Group Holding Ltd

• Amazon.com, Inc.

• Coupang Corp.

• Ebates Inc. dba Rakuten

• eBay Inc.

• Inter IKEA Systems B.V.

• Otto (GmbH & Co KG)

• Taobao

• The Kroger Co.

• Walmart Inc.

Retail E-Commerce Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global retail e-commerce market report on the basis of product and region:

• Product Outlook (Revenue, USD Billion, 2016 - 2027)

  • Groceries

  • Apparels and Accessories

  • Footwear

  • Personal and Beauty Care

  • Furniture and Household Decor

  • Electronic Goods

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

  • Europe

    • Germany

    • The U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)