Groceries and electronics to drive online retail sales rebound for Asia Pacific
Dr. Evangelo Damigos; PhD | Head of Digital Futures Research Desk
- Competitive Differentiation
- Digital Transformation
Publication | Update: Oct 2020
Online retail sales will grow from US$ 1.5 trillion in 2019 to .5 trillion in 2024, with a compound annual growth rate (CAGR) of 11.3%, according to a new forecast by Forrester.
In addition, the research firm estimates that online retail sales in APAC are expected to get a boost from new buyers due to COVID-19, but at the same time, consumer spending will take a hit due to the slowdown of economies.
Grocery is the fastest-growing category in the region thanks to COVID-19, with the adoption of online grocery services getting a boost with an expected CAGR growth of 30% from 2019 to 2024, reaching US9 billion, with online penetration doubling from 5.1% in 2020 to 10.6% in 2024.
The forecast comprises of data for eleven countries: Australia, China, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam. In Asia, more than three-quarters of online retail sales occur on mobile devices. In 2020, 75.8% of online retail sales will occur on smartphones, and Forrester expects online retail sales by smartphone to grow at a CAGR of 13.6%, reaching USD 2 trillion by 2024.
Consumer electronics is the largest retail category in Asia, and it accounted for USD 260 billion in online retail sales in 2019. Forrester predicts that the percentage of total consumer electronics sales taking place online will jump from 54% in 2019 to 75% by 2024 due to the rise in channel share of consumer electronics devices including smartphones, TV sets, headphones, and smart speakers. Instead, grocery is the fastest-growing category in the region due to the COVID-19 crisis, and the research firm expects to see a CAGR growth of 30% from 2019 to 2024 when it comes to online grocery services, reaching USD 359 billion.
The forecast also identified social commerce as an emerging key challenger to traditional online retailers, and Forrester expects this category to reach USD 684 billion by 2023, noting that COVID-19 will also fast-track the adoption of social commerce channels outside China, where more existing and new entrants will experiment with content sharing commerce, membership-based team purchases, reselling, and livestreaming ecommerce.
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The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
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