It’s no secret that every aspect of our lives has been affected by the COVID-19 pandemic in 2020. Our mobility is limited, masks became an essential item, and believe it or not, even birds changed the way they sing.
Luckily, human beings have an extraordinary ability to adapt— even to the most challenging conditions. So when going out started to become a risk, the world turned to digital as a way to cope with the new normal. And online shopping has got its fair share from it.
That’s why it’s more important now than ever for online businesses to analyze the current situation and plan for the future. Because with the right strategy, it’s possible to come out of this period of uncertainty even stronger.
In this article, we’ll walk you through some of the most important global ecommerce stats from 2020, as well as what to expect for the future.
So if you washed your hands, let’s get started!
The COVID-19 impact
The COVID-19 impact on ecommerce cannot be overstated. Global ecommerce was already growing rapidly before 2020 happened but it’s estimated that the pandemic has accelerated the shift away from physical stores to online shopping by roughly five years.
To give you a better understanding of the exceptional growth of online shopping, let me tell you this: In 2019 there were only two $2B days outside of the holiday season and as of August 2020, there are already 130 days that passed that milestone. In fact, every single day from May to the end of June was over $2B.
Normally, one of the most difficult ecommerce metrics to increase is the conversion rate. However, according to Quantum Metric, online conversion rates increased by nearly 9% in February, which is a level of shopping urgency typically seen during Cyber Mondays.
And of course, amidst all this, Amazon became one of the most talked-about ecommerce names of 2020. According to Business Insider, Amazon’s global ecommerce sales will reach $12 billion more than the pre-pandemic estimates this year as consumers rely more heavily on ecommerce due to COVID-19. Amazon’s international sales have also seen an impressive increase as the pandemic bolstered cross-border ecommerce.
One of the important reasons for this growth is the new people joining the online shopping scene. Your grandmother who probably didn’t know how to use a computer last year might be buying her groceries online now. In the US alone, there has been a 12.2% growth in online shoppers aged 65 and older. According to Accenture, it’s estimated that there will be a huge increase of 169% in ecommerce purchases from new or low-frequency users post-outbreak.
And this exponential growth doesn’t seem to stop any time soon as many consumers say they plan to continue shopping online even when brick-and-mortar stores reopen. With all these new online shoppers, projections show that the growth in global retail ecommerce sales will eventually reach up to $4.8 trillion by 2021.
The biggest ecommerce markets
Despite the global recession, ecommerce is growing in almost every country. Even countries like the Philippines, Malaysia, and Spain are projected to have more than 20% ecommerce growth despite being heavily impacted by the coronavirus. However, China takes the crown as the largest ecommerce market in 2020, with an estimated $672 billion in online sales each year.
According to Business Wire, cross-border ecommerce in particular is gaining prominence in many countries such as France, Mexico, India, Indonesia, Australia, China, Singapore, and the US. China is also expected to drive much of the global growth of cross-border ecommerce as the country’s growing middle class is hungry for authentic foreign products and they expect to increase their spending in 2020.
China’s successful ecommerce websites like Alibaba.com and Banggood are also effective in making international shopping so popular in China. These websites are gaining immense popularity in other countries as well — especially among Indian customers due to the growing accessibility to foreign brands and the rise in per capita income.
Right behind China, the United States is currently the second-largest ecommerce market in the world. According to eMarketer, US consumers will spend $709.78 billion on ecommerce in 2020, representing an increase of 18.0% from last year.
Countries like the United Kingdom, Japan, Germany, and France are some of the other countries that follow the US in the list of the largest ecommerce markets in the world.
The new consumer behavior
When needs and priorities change, consumer behavior changes too. Many people shopped online for the first time in 2020 as physical stores started to close. Just in Latin America and the Caribbean alone, 13 million people made their first-ever ecommerce transaction between January and March 2020.
On the other hand, many people who were already shopping online tried a different brand or a store during the crisis. This started to happen when supply-chain disruptions emerged and consumers had problems with finding their preferred product at their preferred retailer. Therefore, availability and convenience replaced loyalty and became highly influential factors that shape consumers’ purchasing decisions this year. But there are some other important considerations too.
Inevitably, the looming economic recession had a big impact on consumers’ finances. According to the World Bank, the COVID-19 recession is the deepest recession since the Second World War. In many countries, people aren’t feeling very optimistic about their countries’ economic outlook and the future. According to McKinsey, confidence in the economic recovery has dipped since early April. However, China and India remain more optimistic than the rest of Asia, Europe, or the United States.
Due to this, people became more mindful of their spending habits this year. 50% of consumers now rank financial security as one of their top three concerns which is a rise of 36% since March 2020.
This caused a shift in consumer spending to mostly essentials, such as groceries and household supplies. And naturally, there was a decline in luxury goods and non-essential products. Let’s take a look at some of the best performing ecommerce categories of 2020.
The best performing ecommerce categories of 2020
As one can expect, medical products saw a massive surge in online sales in 2020. A recent survey by Adobe revealed that online sales of “virus protection” products such as hand sanitizers, gloves, and masks grew more than 800% over the first ten weeks of the year. In China, 64% of surveyed customers said they had changed offline to online purchases of hygiene products.
The market for handcrafted masks has also seen an incredible increase in 2020 as finding masks became a challenge. According to Etsy’s Q2 report, 4 million people came to Etsy for masks alone, and as a result, sales spiked 146%. 112,000 different sellers that saw the opportunity of selling their handcrafted masks on the platform made $346 million during the pandemic.
Another concept that came into our lives in 2020 is of course #stayathome. We don’t just relax at home now — we work, exercise, and socialize at home too. So it’s understandable that sales of home furnishing products are on the rise as people are trying to improve their living and working spaces.
Therefore, the largest surge in browsing time across all retail sectors was observed in furniture and home furnishings with an increase of 46.8% since the start of the outbreak.
In the US alone, sales for home improvement products have increased by 13% in early March compared to about a year ago.
Fitness equipment is also gaining more and more popularity as outdoor movement is highly limited and our homes became the gym. The demand for fitness equipment has increased by 55% in just the first two weeks of March alone. And it seems like people are liking the idea of exercising at home. According to new research, three in five Americans believe gyms will become a thing of the past due to the COVID-19 pandemic. Well, at least we won’t have to feel guilty about not going to the gym anymore.
However, exercising at home wasn’t the only trend that emerged in 2020. So let’s take a look at some of the top ecommerce trends that gained popularity this year and that will continue to impact the ecommerce world in the future.
Top ecommerce trends of 2020
Having to stay at home and limit social interactions led people to become even more attached to their phones. In fact, the average user spent 27% of daily waking hours on their mobile devices in April 2020 — up 20% from 2019.
This naturally led people to shop more on their mobile devices. Consumer spending on mobile rose to more than $50 billion in the first half of the year, mostly driven by gaming, shopping, and streaming.
According to App Annie, mobile commerce was central to ecommerce growth in 2020 and the biggest mobile shopping season to date is expected to happen in the final quarter of 2020. The share of mcommerce in all ecommerce is eventually expected to rise to 72.9% by 2021.
So it’s evident that mobile represents a significant opportunity for businesses in 2020. But you should keep in mind that customers will always prioritize stores that resonate with their new socially-distant needs.
As online opportunities grow, the competition gets steeper for online stores. Customers now have countless options when it comes to online shopping and you should give them every reason to choose you. And online merchants should know that the way to a customer’s heart is through personalization.
According to a research conducted by Epsilon, 80% of shoppers are more likely to buy from a company that offers personalized experiences. Moreover, the same research suggests that consumers who believe personalized experiences are very appealing are ten times more likely to be a brand’s most valuable customer — those that are expected to make more than 15 transactions in one year.
This is especially important because shopping trends are moving towards higher frequency but lower spending. So merchants should put all their focus on building customer loyalty by providing personalized shopping experiences.
Well, it’s a no brainer: personalization is crucial. But it doesn’t just stop there. With the notable rise of cross-border ecommerce, localization will make all the difference when it comes to driving international sales.
It’s 2020 and international customers no longer waste their time on websites that don’t integrate with their languages, cultures, and regional characteristics. With more businesses joining the ecommerce world than ever before, it’s getting harder to attract international customers. And no online business stands a chance at international success without localization.
It’s so effective that the Localization Industry Standards Association (LISA) found that on average, every €1 spent on localizing your website yields €25 in return. And with the increasing rate of cross-border sales, this amount will only go up.
You might be thinking that localizing a website is a comprehensive job and you’re right. But with automated tools like Weglot that allows you to go global in minutes, you don’t have any excuses! And you know now that it’s worth it.
Hopefully, stay-at-home orders will be lifted and life will go back to normal soon. But the new behaviors and habits that consumers formed during 2020 will last for a long time.
Businesses that previously embraced global ecommerce have already experienced growth in 2020. But it’s never too late to go global and benefit from the increasing opportunities. As long as you keep up with the ever-growing ecommerce world, you will remember 2020 as the year that your online business thrived!
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