Why eCommerce alone isn’t going to cut it

While the global online retail sales is set grow from US$4.4 trillion in 2023 to US$6.8 trillion by 2028 at an 8.9% compound annual growth rate (CAGR), 76% of global retail sales, amounting to US$21.9 trillion, will continue to occur offline, according to Forrester.

According to its report Global Retail E-Commerce Forecast, 2024 To 2028, which provides a five-year forecast for total, online, and offline retail sales for 40 countries globally, despite the growth in e-commerce retailers must continue to invest in omnichannel strategies that provide a seamless shopping experience, both online and offline.

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In Southeast Asia’s top six countries — Indonesia, Thailand, Vietnam, Malaysia, the Philippines, and Singapore — retail e-commerce sales reached US$93 billion in 2023, and will rise to US$193 billion by 2028 to capture 17.4% of total retail sales.

Indonesia leads the region in online retail penetration, followed by Malaysia and Singapore. The Philippines and Vietnam will see a CAGR of more than 20% over the next five years, outpacing other countries in the region.

Across Asia Pacific, online retail sales for the top five countries — China, South Korea, Japan, India, and Australia — are expected to increase from US$2.2 trillion in 2023 to US$3.2 trillion in 2028, with China leading the region. China and South Korea are the top two countries globally in terms of e-commerce penetration and will each have online retail penetration of more than 40% by 2028.

“The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. He added that e-commerce maturity and growth opportunities vary vastly by region. As such retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately, to succeed.

Miglani added that looking ahead at 2024 and beyond, online sales will regain momentum from shopping offers and generative AI initiatives.
The three areas driving global e-commerce sales will be:

1. New and mature channels
The rise of online marketplaces, social commerce, online grocery buying, click-and-collect services, quick commerce, livestream selling, and direct-to-consumer commerce will significantly boost online retail sales.

2. Shopper e-commerce maturity
Advanced economies will lead the way due to high internet penetration and digital literacy. But, emerging markets will rapidly catch up, driven by widespread smartphone adoption, mobile commerce, and youthful populations.

3. Innovative payment solutions
Digital wallets and account-to-account (A2A) transfers are revolutionising the global e-commerce landscape by enabling seamless, secure, and convenient cashless transactions.

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