The white paper, E-commerce Megatrends to Watch, examines the drivers behind the current shift in consumer behaviors and attitudes and reveals the trends that businesses should consider while mapping out their long-term e-commerce strategies.
“Our research shows that the Asia-Pacific, Middle East and Africa (AMEA) region will be at the forefront of e-commerce growth for many years to come. With rising disposable incomes, growing internet penetration, and emerging cross-border e-commerce markets, there is a huge amount of growth yet to be realised here,” said Kawal Preet, president of the Asia-Pacific, Middle East and Africa (AMEA) region at FedEx.
“Logistics is the backbone of the e-commerce ecosystem. The simplicity of click to buy must be matched by the speed and convenience of delivery. We continue to build robust networks that offer smart supply chain solutions as well as highly personalised delivery services to help businesses unlock new opportunities as the frontiers of e-commerce advance.”
E-commerce is expected to grow at an average of 47% in the next five years globally. The Asian market leads the field at 51%, followed by Europe (42%) and North America (35%). In the Middle East and Africa, the combined e-commerce market value is expected to reach $73 billion by 2025.
However, growth in China, in particular, has eclipsed the rest of Asia, with e-commerce sales in 2020 that reached $1.3 trillion with a projected increase to nearly $2 trillion by 2025. The promising outlook also creates vast opportunities for logistics companies to grow.
The global e-commerce logistics market is projected to register the highest gains of approximately 6.6% year-on-year during 2021-2028, reaching $118.8 billion by 2028.
Some of the greatest opportunities emerging from the white paper are in the following areas:
1. Customer experience redefined: The white paper reveals several megatrends around the confluence of smart cities and homes, connected consumers, experiential marketing, and reinventing shopping experience, making shopping no longer siloed as the blurring of lines between online and offline continues. In markets like China, North America, and Europe where robust digital infrastructures and technology solutions are in an advanced stage, consumers look for elevated retail experiences through tech-rich offerings like the Cloud Shelf, and augmented reality (AR) mirrors in an offline store, or a virtual reality (VR) hotel tour, or live streaming purchasing experience on mobile. With 5G rapidly becoming a reality, businesses can harness the power of new technologies such as near field communications, artificial intelligence, bots to provide highly digitalised and personalised services, bringing enhanced, connected customer experiences beyond retail.
In line with these evolving trends, the logistic industry is also working to provide customers with advanced analytics.
2. Reaching the unreached: Another megatrend gaining ground is around shifting market frontiers. As some areas of the globe become over-farmed, over-populated, or otherwise reach their maximum potential, opportunities in tier-2 cities and rural areas emerge for brands to explore. Conventional retailers and mom-and-pop stores are now connecting with customers via business-to-business (B2B) e-commerce platforms and selling products online both domestically and internationally. Benefiting from advanced digital and transportation infrastructure, together with the rising middle classes in tier-2 cities, China, APAC and the Middle East are spearheading a revival in conventional retail and mom-and-pop stores through digital commerce. Competition in these untapped landscapes is likely to intensify in the years to come. Cross-border logistics, broader network coverage, and ease of connectivity will support the increasing penetration of e-commerce players, and winners will be those who move first and build a deep-rooted, broad reach across customers.
3. Cashing in on convenience: Sharing economy and buying time are two other megatrends being witnessed, as rising urbanisation, advanced digital infrastructure, and consumers’ changing attitude towards ‘ownership’ continue to drive the growth of shared economy, something that is set to become a $335 billion segment globally by 2025. North America and Europe are currently in the lead. However, in China, more than half of the population is estimated to participate in it.
Convenience is the underlying factor encouraging brands to cross-collaborate and innovate to meet consumers’ needs. From car-sharing and apartment renting to group-buying, consumers’ demand for shared services is fostering groundbreaking innovations. Among these, e-commerce has become a critical time-saver for consumers, providing fulfillment with just a click. At the same time, with consumers’ rising disposable incomes, demand for an on-demand serviced life is set to soar. Globally, 48% of consumers are willing to spend money to save time. Businesses in North America and Europe are at the forefront of redefining the future of this on-demand serviced economy as many see enormous potential to grow revenue through doorstep delivery.