E-commerce market 2024: Landscape and trends

With remarkable growth, the e-commerce market is becoming a key target in the development strategy of businesses. The following forecasts and notable updates on e-commerce in 2024 will provide companies with a clear understanding of this important market.

1. Overview of the E-commerce Market

According to ECDB*, with a compound annual growth rate (CAGR) of 15%, the global e-commerce market is expected to reach 5.14 trillion USD by 2024, far exceeding the growth rate of the overall economy and the global retail sector. In addition, global e-commerce revenue is estimated to increase by another 490 billion USD in 2024.

This revenue growth is driven by three main factors:

• The growth of the retail market

• Inflation

• The shift to online business models

Forecast of the CAGR of the e-commerce market for the period 2019 - 2024

By Region:

Asia leads in e-commerce growth, with 8 out of the 10 fastest-growing markets located in this region. Indonesia is expected to see a growth rate of over 30% by 2024.

The top 10 countries with the fastest projected growth rates in 2024 include:

- Indonesia: 30.5%
- Mexico: 26.8%
- Thailand: 22.9%
- Iran: 22.1%
- Malaysia: 21.4%
- Philippines: 20.5%
- Peru: 19.9%
- India: 19.9%
- Israel: 17.2%
- Vietnam: 16.5%

China and the United States are currently the two largest e-commerce markets, accounting for more than two-thirds of global revenue. Until 2028, e-commerce in these two countries is forecasted to continue strong growth, far outpacing Europe.

By Industry:

Fashion and electronics are the two largest product categories, accounting for nearly half of the global e-commerce market revenue. According to statistics, the revenue for these e-commerce categories in 2023 (in billion USD) reached:

- Fashion: $1,278 billion
- Electronics: $1,115 billion
- Personal Care: $460 billion
- Toys & Entertainment: $622 billion
- Groceries: $434 billion
- Furniture & Household Items: $417 billion
- DIY: $325 billion

2. E-commerce Market Trends

In the context of the ever-growing e-commerce market, technological, consumer, and societal trends are the strongest influencing factors in this market.

The top 5 e-commerce trends for 2024 are:

2.1. E-commerce is Now Integrated with Artificial Intelligence (AI)

Not only the e-commerce market but the financial sector also felt the powerful impact of AI in 2023. According to PwC, by 2030, the application of AI will help increase global GDP by 14%, equivalent to an additional $15.7 trillion over the next decade.

Much of this growth will come from automation and increased productivity. Seizing this opportunity, many businesses have integrated AI into their e-commerce product experiences. Specifically:

Chatbots & Voice Assistants

Designed to simulate conversation, these virtual assistants interact, resolve issues, and guide customers throughout their shopping journey. Through natural language processing technology, these chatbots help optimize real-time support, contributing to increased sales.

Image Recognition

Analytical algorithms allow for product recognition through images instead of text, making it easier for customers to search for products. As a result, it accelerates customers' decision-making process and satisfaction with their shopping experience.

Personalized Search

Personalized search provides a tailored shopping experience, allowing customers to easily find products that match their preferences and needs. These AI-powered algorithms use user data (preferences, behavior, and shopping history) to enhance brand recognition and drive conversion.

Automated Product Descriptions 

This automation process generates concise, appealing product descriptions, ensuring consistent information and optimizing content creation for retailers. Not only does it save time, but it also ensures that the most useful information is provided to customers.

2.2. Social Media is Becoming the E-commerce Platform of the Future

The social commerce market, including platforms like Instagram, Facebook, and TikTok, is growing rapidly. This market is driven by content creators and the international network effect.

With a projected annual growth rate of 31%, this market is expected to reach $6.2 trillion by 2030.

The rate of shopping on social media is increasing, with 67% of global consumers having made purchases through social platforms, and 53% planning to continue shopping this way in the future.

Social Commerce Shopping Rates by Country (Source: ECDB)

Live commerce is the most profitable trend, contributing to the growth of gross merchandise value (GMV) for major e-commerce platforms, particularly in China. Especially when combined with influencers, this interactive experience can strongly boost revenue, with 46% of global shoppers having made purchases through this method.

2.3. Sustainable Commerce (ReCommerce) Reaches an All-Time High

85% of online shoppers actively buy/sell second-hand products. Sustainability has become an increasingly important topic in society and in the e-commerce market.

Additionally, the price instability caused by rising inflation has driven the demand for sustainable commerce. In 2023, the ReCommerce market generated $189 billion in global revenue, an increase of 8.6% compared to 2022. Platforms like Vinted, Back Market, and Etsy have experienced significant growth thanks to this trend.

However, not all consumers are comfortable with this trend. Fast fashion remains popular with a significant portion of consumers, creating strong competition with other trends in the market.

2.4. Augmented Reality (AR) is Becoming Increasingly Popular with Consumers

88% of consumers believe that augmented reality (AR) will play an important role in the future. Asia leads the global market in AR development.

More than 40% of consumers have already used AR for online shopping. Retail is the fastest-growing market for AR usage, with nearly half of consumers wanting to use it more in their shopping experience.

AR not only captures consumers' attention but also increases trust and transparency regarding products. Integrating AR into marketing can boost conversion rates by up to 94%, thanks to the strong connection it creates between brands and consumers.

2.5. Online Shopping Subscriptions are Becoming the Future of Grocery E-commerce

Customers who use grocery subscription services are the highest-spending and most loyal consumers in the market. With over 40% of consumers paying for subscriptions like Walmart+, Instacart, or Amazon Fresh for grocery shopping, general merchandise is leading the subscription trend.

From subscriptions for tech entertainment to mobile plans, they are now becoming popular for general merchandise and fast-moving consumer goods.

Top Industries for Online Shopping Subscriptions

 

Grocery subscription services are the longest-used and provide the highest order value due to the essential nature of the products.

Pet products and fashion items are also popular in subscription services, followed by personal care and household products, which are also growing in popularity.

3. Cross-border E-commerce Market

The export e-commerce market has become a critical advancement for businesses in the context of globalization, technological boom, and the current information explosion. Platforms like Amazon, Alibaba, eBay, and domestic e-commerce channels are significantly contributing to businesses' "cross-border" expansion.

With advantages in infrastructure, international shipping services, global payment systems, and workforce, the cross-border e-commerce market offers businesses a valuable opportunity to unlock their global business potential.

The 2024 Cross-border E-commerce Event, hosted by Amazon on October 9, 2024, will be an excellent opportunity for Vietnamese businesses to accelerate, expand, and make a global breakthrough. Register for the event now!

For more details, visit here.

 

Limited availability, register today!

4. Conclusion on the E-commerce Market

The e-commerce market will continue to grow strongly in the future, reshaping how society shops. We hope that the information above will help businesses seize opportunities and achieve a breakthrough in their operations in Q4 2024.

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