More than $900 billion was spent in online retail in 2020 as Covid-19 kept consumers at home around the world at home bought everything from groceries to gardening supplies through e-commerce platforms.
Mastercard’s Recovery Insights: Commerce E-volution report predicts that between 20-30% of the consumer spending in 2020 which shifted from brick-and-mortar to e-commerce will remain in that category permanently.
It estimates that e-commerce accounted for roughly $1 out of every $5 spent on retail in 2020, up from about $1 out of every $7 spent in 2019.
“While consumers were stuck at home, their dollars travelled far and wide thanks to e-commerce,” said Bricklin Dwyer, the chief economist of Mastercard and head of the Mastercard Economics Institute.
“This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”
What does the report say?
Essential retail sectors like grocery and discount stores boomed during Covid-19 and 70-80% of the grocery e-commerce surge is expected to remain as consumers that formed new habits during the pandemic will keep them.
Consumer spend globally on e-commerce grew around 25-30% year over year from March 2020 through February 2021 as consumers remained in lockdown.
Consumers bought from 30% more online retailers. Residents in countries like Italy and Saudi Arabia are buying from 33% more online stores, on average, followed closely by Russia and the UK.
Covid-19 accelerated the transition to digital payments as non-cash payments jump by an additional 2.5% points when consumers shopped at brick-and-mortar retail stores and restaurants.