E-commerce's share of retail sales will more than double 2017-2027.
A new study reveals some impressive numbers around the global expansion of e-commerce.
E-commerce is forecast to constitute 41% of global retail sales by 2027, a more than 100% increase from its share of just 18% in 2017, according to a survey of retail and CPG companies around the world from Boston Consulting Group (BCG).
The “Winning Formulas for E-commerce Growth" study indicates e-commerce sales increased 3% in Europe and 7% in both the U.S. and Asia in 2022. BCG expects global e-commerce growth to achieve a 9% compound annual growth rate (CAGR) through 2027—not meeting the 12% to 14% CAGR BCG was tracking before the COVID-19 pandemic, but still more than double the projected brick-and-mortar retail growth of 4%.
CPG and retail respondents were also split into groups of "winners" (businesses that reported post-pandemic growth above 30% per annum and are confident of seeing the same or higher growth to 2027) and "laggards" (organizations reporting post-pandemic growth of 10% or less per annum and lacking confidence about their future e-commerce growth). Winners made up 27% of retailers and 20% of CPG companies, with 21% of the retailers and 25% of the CPG businesses surveyed were identified as laggards.
"While e-commerce is gradually reverting to its pre-COVID-19 trajectory, the landscape has undergone a notable and lasting transformation," said Martin Barthel, partner and managing director at BCG and a co-author of the study. "The rivalry between emerging entrants and established incumbents has heightened, driven by the purchasing patterns of baby boomers and Gen-X, who collectively wield substantial influence over today's e-commerce sales."
"In the realms of both retail and consumer packaged goods, the divide between e-commerce frontrunners and those trailing behind is unmistakable, yet it remains a gap that can be bridged," said Robert Derow, BCG leader for digital growth in North America and co-author of the report. "Many markets and categories are actually still years away from full e-commerce maturity, with tailwinds strong enough to justify investing greater capital and resources into winning capabilities and organizations."
The BCG survey, which was conducted in the second quarter of 2023, included respondents from 410 retail and 415 CPG companies around the world with revenues ranging from $50 million to more than $10 billion.