by Andrew Lipsman
We estimate that the global retail market will reach $25.038 trillion in 2019, an increase of 4.5% and slight acceleration in growth vs. the prior year. At the same time, it represents a marked decline from the five years preceding that, when global retail sales grew between 5.7% and 7.5% each year.
This consumer spending slowdown over the past two years reflects growing economic uncertainty and a dampening economic environment across many corners of the globe. China’s economy, which has been surging over the better part of the past decade, has seen GDP growth level off considerably. GDP growth in Europe has also stalled on several fronts, and even a hot US consumer economy appears to have its best days in the rearview mirror.
Amid this backdrop of declining momentum, we estimate that global ecommerce will rise 20.7% in 2019 to $3.535 trillion. Despite its obviously strong growth rate, 2019 will experience a decline from the previous two years when ecommerce grew 28.0% in 2017 and 22.9% in 2018. By 2021, we expect global ecommerce will approach $5 trillion, though growth rates will fall below the 20% threshold beginning in 2020.
Even with the cooling off of China’s previously hot consumer economy, Asia-Pacific will still lead the global ecommerce growth charge in 2019. We expect the region to see growth of 25.0% to $2.271 trillion, representing 64.3% of global ecommerce spending. Latin America and Middle East/Africa will experience identical year-over-year growth rates of 21.3%, slightly outpacing the global average, while North America (up 14.5%) and Western Europe (up 10.2%) are the laggards.
Six of the top 10 fastest-growing ecommerce countries in 2019 hail from the Asia-Pacific region, led by India and the Philippines at more than 30% growth and rounded out by China, Malaysia, Indonesia and South Korea. Latin America boasts the top-growing overall ecommerce market—Mexico at 35.0%—and No. 8 Argentina. Even more mature regions for ecommerce like North America (Canada, 21.1% growth) and Europe (Russia, 18.7% growth) claimed spots in the top 10.
In 2019, the top global ecommerce market will be China, with $1.935 trillion in ecommerce sales—more than three times greater than the US at No. 2 with $586.92 billion. It’s hard to fathom, but China only recently surpassed the US in ecommerce sales in 2013 for the first time. Since then, it has quickly widened the margin. On its own, China represents 54.7% of the global ecommerce market, a share nearly twice that of the next five countries combined. As China goes, so goes the global ecommerce market.
Western Europe owns three of the top six ecommerce markets, led by the UK ($141.93 billion), Germany ($81.85 billion) and France ($69.43 billion), but as more mature markets, each is growing at year-over-year rates well below the global ecommerce growth rate.
This contrasts with Canada’s relatively advanced internet market, which continues to see strong growth rates. The No. 8 ecommerce market worldwide will grow 21.1% to $49.80 billion in 2019. Despite Canada’s overall digital maturity, ecommerce has traditionally lagged in the market because of logistical inefficiencies. Canada’s geographically dispersed population from its western to eastern borders has made building out ecommerce distribution centers and delivery capabilities more cost-prohibitive. Recent improvements are now helping shift spending online at an accelerated rate.
The fastest-growing ecommerce market within the top 10 is India, which will jump 31.9% to $46.05 billion in sales this year. Although India represents one of the largest economies in the world, its ecommerce market is relatively nascent, due in large part to a lower-income population and still-emerging infrastructure to support payment and delivery.
We include the following consumer categories in our definition of retail ecommerce sales:
Retail ecommerce sales include the sale of products and related services ordered using the internet, regardless of fulfillment method.
Motor vehicle and parts dealer sales; furniture sales; electronics and appliance sales; building material and garden equipment sales; food and beverage sales; health and personal care sales; gasoline sales; clothing and clothing accessories sales; sporting goods, hobby, book and physical music sales; general merchandise sales; miscellaneous sales; nonstore sales (i.e., pure play ecommerce platform sales, mail order sales, etc.); digital download sales (movies, music, content, etc.); consumer-to-consumer (C2C) platform sales (eBay, auction sites, etc.).
We exclude the following consumer categories from our definition of retail ecommerce sales:
Food services and drinking place sales (i.e., restaurant sales, restaurant delivery ordered online); travel sales; event ticket sales; payments, such as bill pay, taxes or money transfers; gambling and other vice good sales.
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