The retail e-commerce market involves the buying and selling of goods and services through online platforms. Some key products sold through e-commerce sites include apparel, footwear, cosmetics, electronics, household items and others. The rising availability of affordable smartphones and high-speed internet has enabled customers to shop comfortably for various products online from remote locations.
The Global Retail E-Commerce Market is estimated to be valued at USD 7.29 Tn in 2025 and is expected to exhibit a CAGR of 12.6% over the forecast period 2025 to 2032.
Key Takeaways
Key players operating in the retail e-commerce market are Amazon.com Inc., Alibaba Group Holding Limited, Walmart Inc., eBay Inc., Rakuten Group Inc., JD.com Inc., Shopify Inc., Otto Group, Zalando SE, ASOS plc, Flipkart Pvt. Ltd., MercadoLibre Inc., Target Corporation, The Home Depot Inc., and Best Buy Co. Inc.
Retail E-Commerce Market Growth in sales are expected to witness substantial growth, reaching $6.54 trillion by 2023 due to rising internet penetration and active buyers across developing economies. Technological innovations such as Augmented Reality, Virtual Reality, AI and machine learning are creating new opportunities for companies in the e-commerce industry to enhance customers’ online experience and increase average order values for better margins.
Market trends
Rise of mobile commerce – Increased smartphone usage worldwide, especially in developing nations has boosted mobile commerce. Around 72% of online sales globally are projected to be generated through mobile devices by 2025. Cross-border e-commerce – Consumers are increasingly shopping from retailers across borders, enabled by digital platforms. Cross-border sales are expected to reach 30% of all e-commerce by 2025.
Market Opportunities
Social commerce – Leveraging social networking platforms to promote and transact products as users rely on personal recommendations from friends/family. Live commerce – Live streaming of shopping experiences on social platforms such as Instagram, TikTok along with instant purchases. This innovative format allows for real-time engagement and two-way interaction.
Impact of COVID-19 on Retail E-Commerce Market Growth
The COVID-19 pandemic has dramatically impacted the growth of the retail e-commerce market globally. With lockdowns and movement restrictions imposed by various governments, more and more consumers have shifted towards online platforms for purchasing daily essentials as well as non-essential items. This sudden surge in online shopping led to an exponential rise in the adoption of e-commerce and brought new customers, especially in older demographics, onto digital platforms. Retailers saw a massive spike in their online sales during this period as offline retail operations came to a halt.
While initially there were issues around delivery delays and out of stock messages due to sudden increase in demand amid supply chain disruptions, retailers, logistics players and technology companies came together to scale up their infrastructure and fulfillment capabilities. Investments poured in towards digitization of supply chains, automation of warehouses, and expansion of delivery networks. With work from home becoming a new normal, the categories of electronics, home furnishings, fitness and other work and learn from home essentials witnessed high growth rates online. Even categories like apparel and accessories recorded increased sales as people shopped for casual and loungewear replacing their formal wardrobe temporarily.
As lockdowns ease gradually in various parts of the world, the retail e-commerce market is expected to sustain higher growth levels compared to the pre-COVID times. While people may return to physical stores to some extent, new consumers will likely continue their online shopping habits. Retailers need to strengthen their multichannel capabilities and adopt an omni-channel strategy to engage customers both online and offline. More focus on vernacular and social commerce platforms will also be important to expand reach in new markets. Fulfilling ever rising customer expectations around convenience, value, choice and experience will determine the future competitiveness of retailers.
Geographical Regions with Highest Retail E-Commerce Market Value
In terms of market value, North America dominates the global retail e-commerce market currently owing to high internet and smartphone penetration and widespread adoption of online shopping among consumers in countries like US and Canada. China holds the second largest market share globally, driving the Asia Pacific region’s contribution, led by companies like Alibaba and JD.com catering to the huge Chinese population. Western Europe is another major regional market concentrated in countries such as UK, Germany, France due to growing preference of consumers towards digital shopping over traditional shopping.
Fastest Growing Region in the Retail E-Commerce Market
Latin America is expected to emerge as the fastest growing region in the retail e-commerce market over the forecast period. Countries like Brazil, Mexico, Argentina show promising growth opportunities on the back of rising internet access, increasing smartphone usage, favourable demographics as well as growing penetration of online payment options and logistics infrastructure in the region. International and local retailers are investing heavily in these high potential Latin American markets to expand their digital presence and tap into the region’s strong consumption demand.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)