Spending to be hit by economic slowdown, but online retail sales to grow 11.3% annually over the current 5-year period.
In a new forecast by Forrester, online retail sales is expected grow from US$1.5 trillion in 2019 to $2.5 trillion in 2024, with a compound annual growth rate (CAGR) of 11.3%.
Based on information available up to 7 July 2020, Forrester also estimates that online retail sales in Asia Pacific is expected to get a boost from new buyers due to COVID-19, but at the same time, consumer spending will take a hit due to the slowdown of economies.
The forecast comprises of data for 11 Asia Pacific countries — Australia, China, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam — with China remaining as the largest market, reaching $2 trillion by 2024 and accounting for 50% of global online retail sales in 2020.
Other key takeaways from the report include:
- Retail sales will see a decline in 2020. With consumers spending less on nonessentials and a GDP decline worse than the 2009 financial crisis, retail sales in Asia will see a decline of 4.7% in 2020.
- More than 3/4 of online retail sales occur on mobile devices in Asia. In contrast to Europe and the US, the smartphone is the preferred device for online buyers in Asia Pacific countries. In 2020, 75.8% of online retail sales will occur on smartphones, and we expect online retail sales by smartphone to grow at a CAGR of 13.6% to reach $2 trillion by 2024.
- Grocery is fastest-growing category. Due to COVID-19, adoption of online grocery is getting a boost, with an expected CAGR growth of 30% during the forecast period and online penetration doubling from 5.1% in 2020 to 10.6% in 2024.
- Rise of new channels of eCommerce. Social commerce is an emerging key challenger to traditional online retailers. COVID-19 will fast-track the adoption of social commerce channels outside China, where more existing and new entrants will experiment with content sharing commerce, membership-based team purchases, reselling, and livestreaming e-commerce.