Voice of the Industry

The changing dynamics of global ecommerce – current developments and future projections

Friday 16 February 2024 09:04 CET | Editor: Alin Popa | Voice of the industry

Bob Hoyler of Euromonitor discusses slowing growth, citing changing consumer behaviour. Despite challenges, cross-border ecommerce thrives, driven by marketplaces. 


In 1982, the world’s first ecommerce retailer, the Boston Computer Exchange, opened for business in the US. That means that online retail will turn 41 in 2023 – and, just as many human beings tend to slow down a bit as they enter their 40s, global retail ecommerce is showing signs of doing the same. 2022 marked the lowest rate of year-on-year retail ecommerce sales growth since the channel’s inception, and the first-time growth has failed to crack double-digits since the economic downturn of 2008-2009. Though the rate of growth is projected to accelerate in 2023 in constant terms – i.e., after removing the effects of inflation – it will remain low compared to the dizzying heights of the pandemic years.

There are two main reasons for the slowdown. The first is the return of pre-pandemic shopping behaviours. With China ending its zero-COVID-19 policy in late 2022, consumers everywhere are putting the pandemic behind them from a psychological perspective. As a result, they are logging off and heading back to brick-and-mortar stores to purchase goods. 

The other major reason for the slowdown is the widespread economic stress. With high inflation continuing to impact many markets, a large share of consumers are rationing their spending to conserve cash, with many especially cutting back on online purchases of big-ticket items and other discretionary goods. Although high inflation has been less of an issue in Asia-Pacific countries, the economic recovery of China – Asia’s retail powerhouse – is sputtering, which is also hurting global ecommerce growth.

This is not to say that ecommerce is in any danger of going into retreat. Quite the contrary, retail ecommerce penetration is still advancing globally. Yet, the double-digit year-on-year growth rates that ecommerce sales regularly recorded even in the years preceding the pandemic look to be a thing of the past. Going forward, global ecommerce sales are expected to grow at a slower, steadier rate – fitting for a channel that is now hitting middle age.

Even as online sales growth is normalising at a more subdued pace, cross-border ecommerce remains a bright spot. In 2022, global cross-border retail ecommerce sales stood at USD 396 billion, accounting for 11% of the total ecommerce sales worldwide. This share has more than doubled since 2014. The main driving force behind the increased importance of cross-border ecommerce is the sustained success of online marketplaces. Third-party sellers are continuing to make inroads on these platforms, and many of them are cross-border specialists, with business strategies based entirely around using the reach that marketplaces offer to sell across national borders to consumers located thousands of miles away. 

As the share of marketplace sales out of the total retail ecommerce sales continues to grow – and as third-party sellers account for an ever-larger value share of marketplace transactions – cross-border ecommerce is making significant gains. As a result, in 2022, the year-on-year growth of global cross-border ecommerce sales was nearly three times higher than that of retail ecommerce sales as a whole.

China remains the key cog in the global cross-border ecommerce sector, acting as both the most important outbound market and the most important inbound market for cross-border sales by a significant margin. Despite the headwinds battering the Chinese economy as a whole in 2023, cross-border sales originating from China are getting a welcome boost thanks to the astounding success of a new online marketplace that has burst onto the scene: Temu.

Since launching in September 2022, Temu – which is owned by PDD Holdings, the same company that operates Chinese ecommerce giant Pinduoduo – has already racked up billions of dollars in sales. Temu offers a vast assortment of products, ranging from consumer electronics to apparel, at incredibly low prices. The common factor is that all these products are sold by third-party sellers operating out of China. Temu initially concentrated on selling exclusively to consumers in the US, where it soon became a sensation. By February 2023, the Temu app became the most downloaded mobile app in the country. In the same month, Temu expanded operations to Canada, followed by Australia and New Zealand in March 2023, and then Western Europe in April 2023. Although the marketplace faces regulatory scrutiny regarding the transparency of its operations and its environmental impact, it has inarguably helped bolster the continued growth of cross-border ecommerce around the world.

Temu is not the only cross-border success story in 2023. After a bit of a down year in 2022, US-based ecommerce leviathan Amazon has righted the ship, with renewed sales growth powered primarily by third-party sellers, many of which are cross-border specialists. Marketplace giant Mercado Libre – which is based in Argentina and has contributed greatly to the development of cross-border ecommerce across Latin America – has also continued to rack up steady sales gains over the course of the year. Meanwhile, in May 2023, digitally native fast fashion juggernaut Shein launched its own third-party marketplace – with a distinct cross-border focus.

Despite these victories, several challenges threaten the sustained success of cross-border ecommerce. In September 2023, the Indonesian government enacted a ban on sales of goods through social media platforms, which was widely viewed in the industry as a move intended to curb the influence of TikTok, the popular social media platform operated by Chinese tech company ByteDance. Its shopping feature, TikTok Shop, had exploded in popularity in Indonesia since its launch there in 2021, acting as a massive conduit for cross-border sales into the booming economy of the populous Southeast Asian nation. Additionally, Brexit continues to wreak havoc on the outlook for cross-border ecommerce sales in the UK, which have barely budged upwards since 2021. Most ominously, mounting difficulties facing the commercial real estate sectors in markets from China to the US make the chances of the global economy sliding into recession at some point over the next two years all too likely.

Despite these concerns, however, the prospects for cross-border ecommerce remain bright, fuelled by the animal spirits of entrepreneurship and innovation that have been unleashed by the power of an increasingly connected global consumer base. As a result, Euromonitor International projects that cross-border retail ecommerce sales will increase at a compound annual growth rate of 9%, at constant prices, from 2022 to 2027. And, regardless of the factors working against it, cross-border retail looks set to continue to be one of the most dynamic aspects of the global ecommerce landscape.

Note: Euromonitor International’s definition of cross-border retail ecommerce encompasses online sales of products between businesses and consumers (B2C) shipped across national borders, but excludes trade between businesses (B2B) or consumers (C2C), as well as all sales of services.

This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2023–2024, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally. 

About Bob Hoyler

Bob Hoyler is a manager at Euromonitor International focused on sharing insights about the evolving retail landscape. Based out of Chicago, he has nearly a decade of experience in the industry. Bob helps to oversee Euromonitor’s global Retail, Digital Consumer, and Ecommerce syndicated research products, with a focus on content and client engagement. 


About Euromonitor International 

Euromonitor International is the world’s leading provider of global business intelligence, market analysis, and consumer insights. From local to global and tactical to strategic, our research solutions support decisions on how, where, and when to grow your business. With offices around the world, analysts in over 100 countries, the latest data science techniques and market research on every key trend and driver, we help you make sense of global markets. 

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Keywords: ecommerce, cross-border payments, behavioural biometrics, marketplace, research
Categories: Payments & Commerce
Companies: Euromonitor International
Countries: World
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