Online retail sales will grow from US$1.5 trillion in 2019 to $2.5 trillion in 2024, with a compound annual growth rate (CAGR) of 11.3%, according to a new forecast by Forrester.
The research firm also estimates that online retail sales in Asia Pacific are 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. With consumers spending less on nonessentials and a GDP decline worse than the 2009 financial crisis, overall retail sales in Asia will see a decline of 4.7%, with a loss of US$762 billion in 2020.
More than three-quarters of online retail sales occur on mobile devices in Asia. In 2020, 75.8% of online retail sales will occur on smartphones, and the firm expects online retail sales by smartphone to grow at a CAGR of 13.6% to reach US$2 trillion by 2024.
In addition, consumer electronics is the largest retail category in Asia and accounted for $260 billion in online retail sales in 2019. Forrester predicts that the percentage of total consumer electronics sales taking place online will jump from 54% in 2019 to 75% by 2024 due to the rise in channel share of consumer electronics devices including smartphones, TV sets, headphones, and smart speakers. Consumer electronics is also the preferred category for online buyers in Southeast Asian countries and will remain the key driver of value of sales on online marketplaces in Asia Pacific.
Grocery is the fastest-growing category in the region thanks to COVID-19, with the adoption of online grocery services getting a boost with an expected CAGR growth of 30% from 2019 to 2024, reaching US$359 billion, with online penetration doubling from 5.1% in 2020 to 10.6% in 2024.
The report also identified social commerce as an emerging key challenger to traditional online retailers, with Forrester forecasting the category to reach US$684 billion by 2023. The firm noted that COVID-19 will also 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.
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 the largest market, reaching US$2 trillion by 2024 and accounting for 50% of global online retail sales in 2020.
Sourced from Forrester