In a first, global e-commerce revenues are forecast to shrink this year due to supply chain issues and rising inflation, and industry is expected to generate $3.74 trillion in sales this year, $95 billion less than in 2021, a report showed on Thursday.
According to data presented by AugustaFreePress.com, the expected e-commerce revenue drop comes as the market faces global challenges in 2022.
During the pandemic, many consumers have changed shopping behaviour and switched to new brands in search of brand value, availability and convenience.
"Traditional e-commerce technology has also reached its limitations, and many brands are seeing their e-commerce 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 report mentioned.
In just four years, global revenues spiked 70 per cent, jumping to over $3.84 trillion in 2021, according to 'Statista Digital Market Outlook'. As the two largest e-commerce revenue streams, electronics and fashion sales made nearly half of that value.
Statistics show that between 2017 and 2021, the revenues of the global e-commerce fashion industry soared by 67 per cent to $890 billion.
Electronics sales, the largest single revenue stream, jumped by 46 per cent to $920 billion in this period.
The latest forecast from the Statista Digital Market Outlook shows the global macro-economic factors triggered the first ever YoY revenue drop in the e-commerce industry.
"The previous forecast projected $481 billion more revenue in 2022 than a year ago. However, as of July, the global eCommerce revenue projection slipped from $4.22 trillion to $3.74 trillion," the report showed.
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 e-commerce user base.
Last year, the global e-commerce market had a huge 50.4 per cent 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 per cent this year.