We know that the e-commerce market all over the globe has increased leaps and bounds and ever since the pandemic arrived, the growth has accelerated at 10x the earlier pace due to obvious reasons. Now, we know that companies like Amazon and Walmart are pushing for the growth of their business even more and smaller companies are coming to the market with bigger investments as well. At the moment, it is known that the global e-commerce market does transactions of $6 trillion in a calendar year. But a new report says that this transaction value will hit $8.5 trillion in the next 3 years that is by 2026. This report was conducted by the FIS for its Global Payments Report 2023 edition.
According to the report, “the pandemic has solidified the shift in consumer behaviour towards digital payments, which has continued to drive e-commerce growth. In addition, technological advancements and improvements in digital infrastructure have made online shopping more accessible and convenient for consumers, contributing to the development of e-commerce” and added that “all regions, except Europe, saw double-digit growth in e-com transactions from 2021-2022, with the highest growth of 21% reported in the Middle East and Africa. Of the 40 markets covered in the report, 37 saw double-digit YoY growth from 2021 to 22. Markets in Latin America, the Middle East, Africa, and Southeast Asia, except for Thailand at 9%, continued to be high-growth markets. The report predicted a mid-teens CAGR in these regions through 2026”.
However, according to the report, some things need to be taken care of “to sustain this growth. For example, the report indicated that the lack of digital infrastructure and financial inclusion in some emerging markets may hinder e-commerce growth. Additionally, regulatory challenges and cross-border trade barriers could create obstacles for businesses looking to expand globally”. Now, we know that global challenges affect the e-commerce business a whole lot which means that the growth rate of 9% year-on-year that we mentioned earlier citing the report can be misleading as well. At the moment, we are already seeing that cross-border tensions between US and China as well as war between Russia and Ukraine has caused a lot of problems in the e-commerce sector more than other sectors.
