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In 2020, E-Commerce Made Up About $1 of Every $5 Spent on Retail Worldwide

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Here’s another e-commerce statistic that might make your eyes widen: In 2020, e-commerce made up about $1 out of every $5 spent on retail worldwide, up from about $1 out of every $7 spent in 2019, according to Mastercard’s latest Recovery Insights report.

Mastercard launched Recovery Insights last year to help businesses and governments better manage the health, safety and economic risks presented by COVID-19. As consumers hunkered down at home during the pandemic, they purchased everything from groceries to gardening supplies, which amounted to an additional $900 billion being spent in retail online around the world in 2020 when compared to 2019.

About 20-30% of the pandemic-related shift to digital globally is expected to be permanent, according to Mastercard Insights.

“While consumers were stuck at home, their dollars traveled far and wide thanks to e-commerce,” says Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”

Here are some other trends Mastercard Insights uncovered:

• Early digital adopters go into overdrive: Economies that were more digital before the crisis — such as the U.S. and UK — saw larger gains in the domestic shift to digital that look more permanent than the countries that had a smaller share of e-commerce before the crisis, such as Argentina and Mexico. Asia Pacific, North America and Europe were the strongest regions in driving e-commerce adoption.

• Grocery and discount store digital gains look permanent: Essential retail sectors, which had the smallest digital share before the crisis, saw some of the biggest gains as consumers adapted. With new consumer habits forming and given the low pre-pandemic user base, Mastercard said it anticipates 70-80% of the grocery e-commerce surge to stick around for good.

• International e-commerce rose 25-30% during the pandemic: International e-commerce got a boost both in sales volume and the number of different countries where shoppers placed orders. With infinitely more choices at their fingertips, consumer spending on international e-commerce grew around 25-30% year over year from March 2020 through February 2021.

• Consumers increased their e-commerce footprints, buying from up to 30% more online retailers: Reflecting expanded consumer choice, Mastercard’s analysis shows that consumers worldwide are making purchases at a greater number of websites and online marketplaces than before. Residents in countries like Italy and Saudi Arabia are buying from 33% more online stores, on average, followed closely by Russia and the UK.

• Shift to electronic payments accelerated in the U.S.: Even in-store, COVID-19 accelerated the transition to digital — with more consumers moving from plunking down cash to touch-free payments. According to Mastercard’s analysis of payment forms at brick-and-mortar retail stores and restaurants, non-cash payments jumped by an additional 2.5% beyond the ongoing trend. This led to an acceleration of the shift from cash to electronic payments by a full year.

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