The significant uptick in e-commerce activity fuelled by the COVID-19 pandemic has impacted digital
transformations in a big way. Consumer e-commerce and associated digital technologies contributed to the recovery as per the United Nations Conference on Trade and Development (UNCTAD) report. The UNCTAD figures show that the volume of e-commerce transactions during 2020 was sustained in 2021, with online sales increasing markedly in value, despite the easing of restrictions in many countries.
The average share of internet users who made purchases online increased from 53 per cent before the pandemic (2019) to 60 per cent following the onset of the pandemic (2020/21), across 66 countries with statistics available. However, the situation before the pandemic and the extent of the boost to online shopping experienced vary between countries. Many developed countries already had relatively high levels of online shopping (above 50 per cent of internet users) before the pandemic, while most developing countries had a lower uptake of consumer e-commerce.
Developing Countries Show the Way
The most significant rise in e-commerce transactions occurred in several developing countries. In the United Arab Emirates (UAE), the share of internet users who shopped online more than doubled. Thus from 27 per cent in 2019, it increased to 63 per cent in 2020 in UAE. While in Bahrain the share tripled, reaching 45 per cent in 2020, in Uzbekistan it rose from 4 per cent in 2018 to 11 per cent in 2020.
In the case of Thailand, which already had a relatively high uptake before the pandemic, there was a 16-percentage-point increase, which meant that more than half of internet users (56 per cent) shopped online for the first time in 2020. Among developed countries, the greatest increases were seen in Greece (up 18 percentage points), Ireland, Hungary and Romania (15 percentage points). In the list of the 66 countries covered, online shopping remains the lowest in El Salvador (1 per cent of internet users), Azerbaijan (5 per cent), Uzbekistan (11 per cent) and Colombia (17 per cent). One reason for such differences is that countries differ greatly in their extent of digitalization and, therefore, their ability to turn swiftly to digital technologies to mitigate economic disruption. The least developed countries (LDCs) are especially in need of support to take up e-commerce. However, they are not represented in this analysis due to a lack of data on internet usage.
Pandemic Boosted Online Retail Sales
As per the official statistics available for seven countries that together comprise around half of global GDP (including the US and China), online retail sales increased substantially in these countries from around USD 2 trillion in 2019, immediately before the pandemic, to about USD 2.5 trillion in 2020 and USD 2.9 trillion in 2021. At the same time, China accounted for over half of the online retail sales across these countries, and the US contributed 30 per cent.
The upward trend in online sales accelerated in many of these countries, especially those with a relatively low share of retail sales online. Thus, while online retail sales in Singapore during 2021 were approaching triple the 2018 level, Canada and Australia also experienced huge increases over the same period.
Although the disruption and economic uncertainty caused by the pandemic suppressed overall retail sales into 2020 (only Australia and the US saw retail sales increase from 2019 to 2020)across all these countries, online retail sales grew strongly as people took to shopping online and offline sales declined. This has resulted in a marked increase in the share of online sales in total retail sales from 16 per cent in 2019 to 19 per cent in 2020, which was sustained into 2021 despite strong picking up of offline sales. Online sales comprise a much greater share of total retail sales in China (around a quarter in 2021) than in the US (around one eighth). As a result of steep increases following the pandemic, the UK joined Korea in having the highest overall online retail share in 2021, at 28 per cent.
Alibaba, Amazon, JD.com and Pinduoduo Benefitted the Most
Online e-commerce platforms benefitted the most from the pandemic. The 13 top consumer-focused e-commerce businesses increased their revenues sharply during the pandemic. They made sales worth USD 2.4 trillion in 2019, which rose sharply to USD 2.9 trillion following the onset of the COVID-19 pandemic in 2020. A further one-third increase followed in 2021, taking total sales to USD 3.9 trillion at current prices.
The gains entrenched the already intense market concentration of online retail and marketplace businesses.
Alibaba, Amazon, JD.com and Pinduoduo increased their revenues by 70 per cent between 2019 and 2021 and their share of total sales through all their 13 platforms rose from around 75 per cent in 2018 and 2019 to over 80 per cent in 2020 and 2021.
However, the reduced demand for travel and accommodation services impacted Expedia, Booking Holdings and AirBnB in a big way. Their gross bookings declined by two-thirds in 2020 due to COVID-19 induced travel and movement restrictions, reducing demand for travel and accommodation services. Anyway, growth returned in 2021 with the easing of restrictions.
Better Statistics Needed
As these statistics only provide a partial perspective on the evolution of e-commerce during the pandemic, there is a need for better statistics. More inclusive statistics on online retail sales, business-to-consumer and business-to-business e-commerce and cross-border digital trade are required to provide insights covering a more comprehensive range of countries, especially the developing ones.UNCTAD and its partners are collaborating on establishing the foundations for international statistics that can bring about a better understanding of the links between e-commerce, trade and development and compiling the second edition of the Handbook on Measuring Digital Trade, which was initiated in response to the growing demand for coherent and comparable data on digital trade. In 2017 the Inter-Agency Task Force on International Trade Statistics created an Expert Group with members from international organisations, national statistics agencies and central banks. Its objective was to develop a Handbook providing a conceptual framework to define digital trade to target national efforts and provide a mechanism to bring together and share existing national and international efforts on measuring digital trade and/or its dimensions of it. It is expected that the handbook helps identify and develop best practices in the digital economy domain.
