The last year of the first decade of the 21st century quivered the world with COVID-19 and brought the planet to its knees. A pandemic from nowhere hit us all hard. It redefined how we work, interact with people, and cohabit as a community at large.
Most businesses were seriously hit by the pandemic and are still reeling from its wounds in more ways than one. But there was one particular business that thrived in the murky waters of the Coronavirus pandemic in 2020— the e-commerce industry.
But many industry analysts say that, considering the very model of e-commerce, it was destined to thrive in the closed world ushered in by the pandemic. And, that’s right!
A report from Statista says that e-commerce retail businesses grew from US$ 3.535 trillion in 2019 to US$ 4.206 in 2020, and is poised to grow and cross US$ 5.695 trillion by 2020. No one can doubt that the industry will continue its unrestrained streak in recent years and hit big numbers.
If you are an investor, you will definitely want to develop a custom e-commerce website to leverage the unprecedented growth of the industry. That’s for sure. The number of users of e-commerce is set to hit 3.814 billion in 2021 with an excellent year-on-year growth of 10%.
But isn’t it important for you to keep a tab on the e-commerce trends that will shape 2021 so that you can mold your strategies for better business?
Let’s help you with that. Driving analytical reports and statistics from the industry leader—Statista, we bring you insights that no one else can.
The Top Trends that Ruled the Industry in 2020
Without carving into much of your precious time, let’s get into the trends that defined and transformed the unusual year of 2020.
Voice research has begun to take up a major chunk of search with a growth of 9.5% from the previous year, 2019.
Mobile payment has grown considerably with 50% of online shopping is done on mobile.
AI-powered technologies help businesses learn more about users and make strategic and product decisions.
Data analytics has become a major tool for businesses to create personalized shopping and buying experiences for users.
Chatbots are an integral part of CX management for businesses now, and they are constantly integrated to ecommerce sites.
Augmented Reality is still playing a major role in shopping while creating room for further growth in the industry.
The explosion of mobile payment solutions and service providers has made it easier for reliable, instant payment for users.
Continued innovation in the ecommerce technology was made even more streamlined by API-driven and headless ecommerce.
When customers subscribe to a service, they are more likely to come back for more again and recommend a brand.
The B2B service model has been getting a lot of traction and it has undergone a slew of inventive make-ups in the recent year.
China leads the US, Japan and the UK in generating most revenue from ecommerce businesses in 2020.
Infographic, video, and visual content are found to impress and engage users more than mere text based content.
Mobile shopping has continued to grow and will soon overcome desktop shopping in the recent years by a huge margin.
While these were the trends and general business sentiment in 2020, the industry has become even more optimistic for 2021 as it is projected for a growth of about 11.7% year-on-year. The growth of the e-commerce industry even during the worst challenge of the century has created a sense of unwavering confidence in the minds of businesses as they steadily march to 2021.
Now, let’s get to the most exciting part.
Trends and Forecasts for the Industry in 2021
Fashion and Electronics & Media Lead the Race
Statista says that a major chunk of the global e-commerce industry is contributed by five leading segments:
Electronics & Media
Toys, Hobby, and DIY
Furniture and Appliances
Food and Personal Care
Even then, the first two segments—Fashion and Electronics & Media lead the race in 2020 bringing in most revenue. The revenue volume of the Fashion sector in ecommerce is going to hit a whopping projected market volume of US$759,466 million in 2021.
The Growth of Worldwide Ecommerce Revenue
For the first time in history, global e-commerce revenue is forecast to hit gargantuan numbers in 2021. From US$1.92 trillion in 2019, the industry has grown to US$2.415 trillion in 2020 with a year-on-year growth of nearly US$500 billion.
The trend is ever optimistic for the industry as the growth will go swing the upward trend to greater heights to US$3.45 trillion in 2025 with an average annual growth rate of 6.3% during 2021-2025.
China Leads the Industry Leaving Other Countries Far Behind
China amounts to, according to eMarketer, more than 50% of the global e-commerce activities owing to the country’s extensive population and reliance of technology.
While the highly urbanized, ultra-modern cities such as Beijing, Shanghai, Shenzhen, and Guangzhou, there are numerous semi-urban cities in China that have untapped potential for e-commerce access. Such a unique positioning helps China to keep leading the e-commerce growth in the world in recent years.
The COVID-19 Pandemic Has Helped the Industry Thrive
When the world was hit harder than ever due to the pandemic, the e-commerce industry was seeing its demand on an upward swing. The effects of the same would be seen in 2021 as well.
According to Statista, the COVID-19 has actually resulted in the industry expanding by 10% in 2020.
That’s an interesting factor to consider when most other sectors of business were forced to shut down resulting in negative growth for most businesses.
Online Shopping is Becoming More of Mobile Commerce
Statista estimated that more a third of all e-commerce activities online will take place on mobile platforms. And the trend will continue to hold. As internet usage on mobile has been shot up consecutively for 2020 eclipsing the desktop searches, mobile commerce is only going to get even more exciting for most businesses wanting to get a bite from the e-commerce pie. Further, businesses must keep this in mind if they are on the verge of developing an e-commerce website.
Creating and ensuring a smoother user experience is key in this regard and they must select such e-commerce website maintenance services that can meet these challenges professionally.
Simple Checkouts and Easy Delivery a Priority for Users
It is found that businesses having better and easier checkouts and quicker delivery generate more revenue than other businesses. Payment and delivery are the two most important aspects of any e-commerce transaction and there is nothing surprising about users preferring businesses that offer a better user experience in this regard.
If you are a business that wants to grow in your industry with an e-commerce business model, these are the elements that you must keep in your mind.
Being user-centric is the key to winning the competitive business of e-commerce.
Customer Loyalty Programs are a Huge Part of Customer Retention
Businesses that have tried to integrate loyalty programs for customers with their omnichannel marketing have great success with such strategies. Personalized product offerings, service plans, and service support can impress the users greatly and create an extremely positive image of your business in their minds.
It can also improve your business relationships with them through intelligent cross-platform marketing and remarketing techniques.
In addition, when the customers are treated well and with individualized support, they will spread the good word. And you are destined to be paid back immensely.
Books, Movies, Consumer Electronics, and Music & Games Are Searched and Bought by Majority of Users
It is found that books, movies, games & music and consumer electronics are consistently searched and bought by a majority of users online. If you are a business person who is on the verge of developing a mobile application or an e-commerce application, this is good news for you.
This also emphasizes the need to actively tether your digital marketing efforts and e-commerce seamlessly for better returns and footfalls to your website.
Ecommerce is Not Restricted to a User’s Own Country’s Borders
Cross border sales have been becoming an integral part of e-commerce in recent part and it will continue to follow the upward trend in the near future as well. However, such elements as geographical locations and cultural backgrounds water cross-border e-commerce relations between nations.
This has certainly opened renewed opportunities for businesses in various nations having multiple borders and excellent trade relations across the world.
Indian Ecommerce Industry has Grown Considerably
Statista forecast the Indian e-commerce industry to grow considerably in 2021 when compared to the growth of previous years. The market size of the Indian e-commerce sector has continued to grow from US$39 billion in 2017 to US$ 50 billion in 2018 and US$64 billion in 2020.
It is expected to grow at more than 30% year-on-year in 2021 to US$ 84 billion. The forecast also states that the Indian e-commerce industry is poised for incredible growth in the next five years with the overall market size is going to hit US$ 188 billion in 2025 and US$ 200 billion in 2028.
Ecommerce Platforms Have Greatly Evolved and Improved
The technological evolutions that happened in the web development field have changed the way e-commerce platforms are used and leveraged by businesses in the world. No matter if you are using Shopify, Magento, or WooCommerce, you must ensure that the users are able to meet their expectations.
Serving customers beyond their expectations is key to winning them over and keeping them as users in today’s highly competitive world.
Hence, no matter what you do, having a unique Shopify, WooCommerce of Magento e-commerce development strategy in India is crucial.
This has contributed immensely to the field of e-commerce growth especially in India where internet bandwidth is a serious concern.
Payment Options and E-Wallets Have Supported Ecommerce Growth
One of the most significant reasons that catered to the growth of the e-commerce industry has been the unprecedented changes happening in the online payment segment. E-Wallets have been designed with the e-commerce industry in mind and it has taken the world by storm.
Convenience and ease to use without having to pay for use have made E-Wallets one the most sought-after methods for payments in the world.
It is estimated by Statista that by 2025, E-Wallets will overcome cards as the most used payment method in the US, and the rest of the world is likely to follow.
Contribution of Ecommerce to GDP Has Been on the Rise in India
Although eCommerce does not amount largely to India’s GDP, it has been showing confident signs of growth over the years. In 2016, e-commerce industry amounted to 0.71% of the total GDP of the country and it grew to 0.76% in 2017. The same grew to 0.9% in 2018.
According to India Brand Equity Foundation, IBEF, the Indian e-commerce industry is poised to grow from US$30 billion in 2020 to US$99 billion in 2024.
The Digital Population of the Country Has Grown Immensely
Indian digital population has been growing at a phenomenal growth thanks to various factors such as cheaper internet tariffs and increased focus of the government in investments in technology infrastructure.
Therefore, the digital population in India has had an extensive role in supporting the growth of eCommerce in the country.
As of January 2020, the country has 400 million active social media users while the number of active mobile internet users and active internet users has reached 629.2 and 687.6 million respectively.
Indian Internet Penetration Has Been Growing Steadily
Despite being one of the largest countries, India, with the second-largest population, has continued to expand its internet penetration.
India has achieved 50% of internet penetration in the country by 2020 which is exceptional when compared to 34.4% in 2017.
The country will continue its efforts to bring the internet to its entire population, which will bolster the access of eCommerce businesses to an untapped Indian population. This will surely make India one of the biggest e-commerce markets in the world.
As you can see, the e-commerce industry is here to stay and it will only get better and grander. The growth of the industry will be further accelerated by the advances and transformations that we witness in the various technologies.
The eCommerce business world has already moved to utilize data science and AI-powered systems to ensure peerless user-experience and superior human-technology interactions. This will elevate the user and buyer-experience as the center of every ecommerce activity for the foreseeable future as the industry looks to substitute a major chunk of brick-and-mortar stores.
People who have been reluctant to use e-commerce in their lives for a range of financial and security inhibitions were forced to rely on the same during the pandemic. It has resulted in a paradigm shift that will reverberate across the industry in the recent future. The stakeholders of the industry and business people across the world have been looking at the field with newer hopes due to the resilience that the field has shown even during the worst challenge that the world has faced in recent memory.
And knowing the trends and heartbeats of the industry will empower a range of businesses’ efforts to capitalize on these opportunities wide-opened by the field.