Picture used for illustrative purpose.
The dramatic rise in e-commerce amid movement restrictions induced by COVID 19 increased online retail sales’ share of total retail sales from 16 per cent to 19 per cent in 2020, according to estimates in an UNCTAD report released on Saturday.
UNCTAD released the report, “Estimates of global e-commerce 2019 and preliminary assessment of COVID-19 impact on online retail 2020,” as it hosted a two-day intergovernmental meeting on measuring e commerce and the digital economy.
According to the report, online retail sales grew markedly in several countries, with the Republic of Korea reporting the highest share at 25.9 per cent in 2020, up from 20.8 per cent the year before.
The pandemic has, however, resulted in mixed fortunes for some e commerce companies, reversing the fortunes of firms offering services such as ride-hailing and travel.
Meanwhile, global e-commerce sales jumped to $26.7 trillion globally in 2019, up 4 per cent from 2018, according to the latest available estimates.
This includes business-to-business (B2B) and business-to-consumer (B2C) sales, and is equivalent to 30 per cent of global gross domestic product (GDP) that year.
“These statistics show the growing importance of online activities. They also point to the need for countries, especially developing ones, to have such information as they rebuild their economies in the wake of the COVID-19 pandemic,” said Shamika Sirimanne, UNCTAD’s director of technology and logistics.
The COVID-19 pandemic has also resulted in mixed fortunes for leading B2C e-commerce companies, according to the UNCTAD report.
Data for the top 13 e-commerce firms, 10 of which are from China and the United States, shows a notable reversal of fortunes for platform companies offering services such as ride hailing and travel (Table 2).
All of them experienced sharp declines in gross merchandize volume (GMV) and corresponding drops in ranks.
For instance, Expedia fell from 5th place in 2019 to 11th in 2020, Booking Holdings from 6th to 12th and Airbnb, which launched its initial public offering in 2020, from 11th to 13th.
Despite the reduction in services companies’ GMV, total GMV for the top 13 B2C e-commerce companies rose by 20.5 per cent in 2020, higher than in 2019 (17.9 per cent). There were particularly large gains for Shopify (up 95.6 per cent) and Walmart (72.4 per cent). Overall, B2C GMV for the top 13 companies stood at $2.9 trillion in 2020.
The report estimates the value of global B2B e-commerce in 2019 at $21.8 trillion, representing 82 per cent of all e-commerce, including both sales over online market platforms and electronic data interchange (EDI) transactions.
The United States continued to dominate the overall e-commerce market, ahead of Japan and China.
B2C e-commerce sales were estimated at $4.9 trillion in 2019, up 11 per cent over 2018. The top three countries by B2C e-commerce sales remained China, the United States and the United Kingdom.
Cross-border B2C e-commerce amounted to some $440 billion in 2019, an increase of 9 per cent over 2018. The UNCTAD report also notes that the share of online shoppers making cross-border purchases rose from 20 per cent in 2017 to 25 per cent in 2019.
Despite e-commerce firms’ sizeable fortunes, an index released by the World Benchmarking Alliance in December last year rated them poorly on digital inclusion. The index ranked 100 digital companies, including 14 e-commerce firms, based on how they contribute to access to digital technologies, building digital skills, enhancing trust and fostering innovation.
E-commerce enterprises underperformed compared to companies in other digital industries such as hardware or telecommunication services.
For instance, the highest ranked e-commerce company was eBay at 49th place. Overall, e-commerce companies obtained a score of just 20 out of a possible 100.
According to the UNCTAD report, a main factor for the poor performance is that e-commerce companies are relatively young, typically founded only in the last two decades.
“These firms have been more focused on shareholders rather than engaging with a wide group of stakeholders and compiling metrics on their environmental, social and governance performance,” the report says.
Nonetheless there are some bright spots. For instance, several e-commerce companies provide free training to entrepreneurs on how to sell online including in some cases, specifically targeted at vulnerable groups such as people with disabilities or ethnic minorities.
India will require e-commerce firms to treat sellers equally on their platforms and ensure transparency, according to a draft policy seen by Reuters on Saturday that follows criticism against business practices of big online companies.
Global retail sales were projected to reach $25.04 trillion in 2021 and $26.7 trillion in 2022, up from approximately $23.6 trillion in 2018, according to Statista, an online tracker of global economy and retail sector.
The various e-commerce and virtual retail stores that cater to different product segments, will eventually merge into larger connected virtual hypermarkets or digital marketplace eco-systems, said experts at a virtual retail conference.
Bilateral trade between the United Arab Emirates and the Royal Kingdom of Thailand is set to soar to higher heights with the establishment of the UAE-Thai Business Council
Sharjah Airport experienced a remarkable growth in the previous year achieving the Authority’s primary objectives of revamping the Emirate’s tourism
Mohammed Juma’a Al Musharrakh , Chief Executive Officer of the Sharjah FDI Office (Invest in Sharjah), highlighted the rich investment options and promising opportunities