As one of a few resilient industries during the global downturn caused by Covid-19, the eCommerce sector has seen substantial growth in past years. The entire industry boomed, with millions of people choosing webshops instead of brick-and-mortar stores and revenues skyrocketing to new highs. However, for the first time in the market’s history, global eCommerce revenues are forecast to shrink in 2022.
According to data presented by the eCommerce industry is expected to generate $3.74trn in revenue this year, $95bn less than in 2021.
Supply Chain Issues and Inflation the Largest Weakening Factors
Not many industries have seen such impressive growth as the eCommerce sector. In just four years, global revenues spiked 70%, jumping to over $3.84trn in 2021, according to Statista Digital Market Outlook. As the two largest eCommerce revenue streams, electronics and fashion sales made nearly half of that value.
Statistics show that between 2017 and 2021, the revenues of the global eCommerce fashion industry soared by 67% to $890bn. Electronics sales, the largest single revenue stream, jumped by 46% to $920bn in this period.
The expected eCommerce revenue drop comes as the market faces global challenges in 2022. During the pandemic, many consumers have changed shopping behavior and switched to new brands in search of brand value, availability, and convenience.
Traditional eCommerce technology has also reached its limitations, and many brands are seeing their eCommerce tech stacks not flexible enough to meet customer expectations. On top of that, digital advertising costs are rising. However, supply chain issues and inflation remain the biggest weakening factors.
The latest forecast from the Statista Digital Market Outlook shows these challenges triggered the first ever YoY revenue drop in the eCommerce industry. The previous forecast projected $481bn more revenue in 2022 than a year ago. However, as of July, the global eCommerce revenue projection slipped from $4.22trn to $3.74trn.
More than 4 billion People Shop Online, Global Ecommerce Penetration rate at 55%
Although there is a headwind at the moment, Statista expects revenue growth to get back on track eventually. One of the significant drivers for recovery will be the swelling eCommerce user base.
Last year, the global eCommerce market had a huge 50.4% penetration rate, with nearly 3.8 billion people who shopped online. Statistics show online shoppers are expected to grow by 315 million YoY to 4.1 billion in 2022. Also, the market`s penetration rate is set to reach 54.1% this year.