The slowdown in physical activities, as a result of mobility restrictions due to COVID has surged online retail sales by 3 percentage points (16%-19%) in 2020, according to UNCTAD estimates.
According to the report, this reflects an increase in online retail sales’ share of total retail sales. This also means that overall, e-commerce sales skyrocketed in 2020, according to UNCTAD estimates.
While online retail sales jumped up in several countries, the Republic of Korea recorded the highest share at 25.9 percent in 2020, up from 20.8 percent in 2019. Accordingly, global retail sales have also been seeing an increase since 2019. Based on the estimates global retail sales $26.7 trillion globally in 2019, based on available data.
This rise is attributed to improvements in business-to-Business (B2B) and business-to-consumer (B2C) sales, reflecting 30 percent of global GDP for 2019.
Shamika Sirimanne, UNCTAD’s director of technology and logistics commented as follows:
“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.”Shamika Sirimanne, UNCTAD’s director of technology and logistics
Furthermore, the evidence presented suggest that global B2B e-commerce in 2019 was valued at $21.8 trillion. This reflects 82 percent of all e-commerce, including both sales over online market platforms.
Per the UNCTAD report, the United States e-commerce market still dominated in share of global e-commerce market followed by Japan and China.
Moreover, value of cross-border B2C e-commerce amounted to some $440 billion in 2019, an increase of 9% over 2018. More so, the share of online shoppers making cross-border purchases rose from 20% in 2017 to 25% in 2019, the report notes.
Uneven performance across firms
These notwithstanding, the Covid-19 pandemic caused some uneven performances among B2C commerce companies. Data for 13 e-commerce firms showed that 11 from China and the United States showed marked decline in performance.
These companies were among platform companies offering services such as ride-hauling and travel.
For example, internet media and services such as Expedia, Bookings Holdings, AirBnB, all in the US. Each made gross merchant value (GMV) of $100 billion, $93 billion and $29 billion respectively.
Despite the reduction in services companies’ GMV, total GMV for the top 13 B2C e-commerce companies rose by 20.5% in 2020, higher than in 2019 (17.9%). Particularly, some significant gains were chalked by companies such as Shopify (up 95.6%) and Walmart (72.4%). On the whole, B2C gross merchant value for the top 13 companies stood at $2.9 trillion in 2020. These include Alibaba in China, Amazon in USA, JD.com in China, among others.
E-commerce platforms performed better regarding growth, but poorly in digital inclusion. According to the report, a main factor is that e-commerce companies are relatively young. Most of these firms are only a decade or two in existence.
“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 revealed.
Nevertheless, not entirely on all fronts. Evidently, several e-commerce companies provided free training to entrepreneurs on how to sell online including in some cases. Specifically, these trainings targeted vulnerable groups such as people with disabilities or ethnic minorities.