The U.S. and Europe are expected to see steady eCommerce growth. A report from Forrester is predicting 56 percent increased sales by 2021 in the U.S. as a direct result of mobile device use. Digital sales are expected to reach $523 billion by 2021; in 2015, sales were $335 billion. The report expects 26 million more eCommerce and digital shoppers by 2021.
In Europe, in 2016, eCommerce sales are expected to be just over $566 billion, and for 2017 and 2018, they are expected to be in the range of $668 billion–$737 billion, respectively.
The Forrester report finds that $1 trillion of the total 2015 online purchases were from mobile devices, and it is expected that India, with its rapid adoption of mobile phones, will show similar growth by 2020.
To dampen the sunny outlook, however, Asad Kahn, CEO of ePlanet Communications, warns the eCommerce community of the potential for chargebacks that could stymie growth. Kahn recommends quick refunds by eRetailers rather than employing protective policies that can cost more than the products in the first place.
If Best Buy Any Indication, U.S. eCommerce Looking Strong
Best Buy is confident going into the holiday period after some encouraging second quarter results. According to CNBC, the retailer saw a 23.7 percent lift in sales and a second consecutive quarter of growth. Eleven percent of revenue is from digital sales. ZDNet reported that this growth shows a 75 percent boost in online revenue over three years.
Hubert Joly, CEO of Best Buy, cited better product delivery, faster checkouts and improved product recommendations for consumers as the reasons for the uptick.
eCommerce Fine In France
France is also seeing an uptick in eCommerce in the second quarter, with an increase in online sales of almost 13 percent year on year.
Online transactions are also up by 18 percent, according to the eCommerce index Journal du Net, with 181 million online credit card transactions from participating platforms between April and June this year, compared to 153 million transactions recorded last year. The average order value is also higher in Q2 compared to Q1, almost €74 in Q2 — €1.32 higher than in Q1 but €3.37 lower year over year.
For three years now, the average transaction value has increased between the first and second quarter.
Moscow Also Sees eCommerce Growth
ECommerce in Moscow showed growth of 13.4 percent during the first half of the year, now valued at 174.8 billion Russian rubles (€2.4 billion euros). At the end of this half-year, Moscow had more than 20,000 online outlets, an increase of 7 percent.
Fifty percent of online shoppers frequented foreign stores in 2016. The greatest competition is among the home and garden, electronics and household appliance retailers. Retailers in health, beauty and clothing were the most frequently introduced categories, and 50 percent of retailers in Moscow allow customers to pick up orders.
ECommerce in Moscow accounts for 8 percent of the total retail market in the Russian capital, and there are around 87,000 eCommerce employees. This number has not changed since 2015 because of outsourcing and efficiency optimization.
Less Rosy Outlook In India
Things are less bright in India, however, where some eCommerce companies are closing or laying off employees. India-based Zomato laid off 300 workers in the U.S., and Foodpanda lost 500 employees in December.
This year has been worse still. Getit lost 4,000 workers when it shut down Askme.com. In July, after a long battle with minority shareholders, Astro Holdings, which owned almost 97 percent of AskMe Group, exited.
Ola bought TaxiForSure a year and a half ago to consolidate its position as the leading cab aggregator in India. Ola’s recent shutdown of the acquisition has led to the layoff of 90 percent of TaxiForSure’s employees.
Flipkart acquired Jabong — and virtually the whole market — and laid off 1,000 workers due to underperformance.
CarDekho, which is owned by Girnar Software, laid off six employees in April, apparently to streamline management and resources, according to Amit Jain, CEO of Girnar Software.
CommonFloor, which was acquired by the real estate website Quikr, laid off 100 employees in March. According to a Quikr spokesperson, this was “part of the overall integration exercise.” “Extrication” may be a more appropriate word as far as staffing is concerned.
Meanwhile, Malaysia’s eCommerce Soars
Malaysia, however, is brimming with confidence for its eCommerce industry, which has seen its highest activity in the last five years, according to Chan Kok Long, executive director of regional payment gateway iPay88.
Chan attributes the lift in eCommerce to new technological innovations that are making funds available, such as lending and overdraft banking services, which increase consumers’ purchasing power. Also, online shopping behaviors are shifting as consumers buy larger items, such as cars, property, professional services and even real estate.
According to data from iPay88, automobile and property-related transactions have increased by 53 percent and 39 percent, respectively, year on year from 2015 to 2016. Also, only 36 percent of online transactions that iPay88 processed were from credit cards, while almost 65 percent were from online banking. Much higher fraud rates were recorded for online banking transactions (87 percent) than for credit card transactions (13 percent), which might have an effect on consumer payment preferences down the line.