Global e-commerce sales are expected to grow 8.9% annually through 2028, reaching $6.8 trillion. And a new Forrester report predicts that U.S. online retail sales will reach $1.6 trillion by 2028, accounting for 28% of total retail sales.
The report found that the maturity of retail e-commerce varies globally, with developed countries such as the US, UK and South Korea being more mature due to higher internet penetration and digital literacy.
E-commerce is more mature in the U.S. compared to Canada, with Forrester predicting that Canadian online retail sales will reach $83 billion by 2028. According to Forrester, Canada lags behind the U.S. in e-commerce penetration due to low population density, small market size and slow consumer adoption.
While Forrester predicts continued growth in online sales, 76% of global retail sales will still occur offline over the next four years, including $4.2 trillion in sales in the U.S. As such, the report advises retailers to continue investing in omnichannel strategies that deliver positive experiences for consumers in-store and online.
While consumers return to shopping in stores, Forrester said it expects online sales to regain momentum, driven by new and mature channels such as marketplaces, social commerce, click and collect, livestreaming and direct-to-consumer. The rise of mobile commerce and a younger demographic globally are driving growth for marketplaces like Flipkart in India, Lazada in Thailand and Malaysia, Shopee in Singapore, and Shane and Tem in the US.
“The growth of online marketplaces, social commerce and livestream selling will fuel global online retail sales growth over the next five years,” said Jitender Miglani, principal forecasting analyst at Forrester. “However, e-commerce maturity and growth opportunities vary significantly across regions, so retailers and brands need to thoroughly understand the key drivers of retail and e-commerce growth in their priority markets and align their strategies appropriately to succeed.”
Forrester projects that the top six countries in Latin America for online retail sales (Brazil, Mexico, Argentina, Colombia, Peru and Chile) will grow from $109 billion in 2023 to $192 billion by 2028. The top five countries in Asia Pacific for online retail sales (China, South Korea, Japan, India and Australia) are expected to grow from $2.2 trillion in 2023 to $3.2 trillion in 2028, with China leading the way in the region. China and South Korea are the top two countries in the world for e-commerce penetration, and by 2028, they will each have an online retail penetration rate of over 40%.
Across the top six Southeast Asian countries (Indonesia, Thailand, Vietnam, Malaysia, Philippines and Singapore), retail e-commerce sales are expected to reach $93 billion in 2023, rising to $193 billion by 2028, accounting for 17.4% of total retail sales. Indonesia will lead the region in online retail penetration, followed by Malaysia and Singapore. The Philippines and Vietnam will post compound annual growth rates of more than 20% over the next five years, outpacing other countries in the region.
In Western European countries, including Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK, online retail sales are expected to grow from $508 billion in 2023 to $773 billion in 2028, with online retail penetration increasing from 15% to 20%. The UK will remain the largest market for retail e-commerce, followed by Germany, France, Italy and Spain.
In Eastern Europe, online retail penetration is half that of Western Europe. Forrester predicts that online retail sales in the top five Eastern European countries — Russia, Poland, Czech Republic, Romania and Hungary — will grow from $72 billion in 2023 to $126 billion in 2028, with Russia and Poland leading the region.
Forrester predicts that in 2028, online and offline retail sales (in USD) across 40 countries will account for 88% of global gross domestic product.
