Online retail set for continued growth

As the world increasingly embraces e-commerce, a research and advisory firm is predicting a sharp rise in global online retail sales by 2028, emphasizing the need for retailers to refine their omnichannel strategies.

But Canada may not grow as quickly due to some bigger hurdles than other countries, specifically the U.S.

Forrester predicted that total global online retail sales will grow from USD$4.4 trillion in 2023 to $6.8 trillion by 2028, reflecting an 8.9 per cent compound annual growth rate (CAGR). The report, Global Retail E-Commerce Forecast, 2024 To 2028, provided a five-year forecast for total, online and offline retail sales across 40 countries around the world.

Despite the substantial growth in e-commerce, the report indicates that 76 per cent (or $21.9 trillion) of global retail sales will still occur offline in 2028. Consequently, retailers must continue investing in omnichannel strategies to ensure a seamless shopping experience both online and offline.

The report further highlights the varying maturity levels of retail e-commerce globally. Advanced economies like the U.S., the U.K. and South Korea exhibit more maturity due to higher internet penetration and digital literacy. However, as smartphone adoption and mobile commerce become more widespread, emerging markets in Asia Pacific, Eastern Europe, and Latin America are rapidly catching up.

This swift adaptation is reshaping the global e-commerce landscape, offering new opportunities for businesses and consumers alike.

Looking ahead to 2024 and beyond, Forrester anticipates continued growth momentum for online retail sales worldwide. In the Americas specifically, online retail sales in the U.S. are projected to reach $1.6 trillion by 2028, accounting for 28 per cent of total retail sales in the country.

However, e-commerce is more mature in the U.S. compared to Canada, where online retail sales are expected to reach $83 billion by 2028. Forrester’s announcement noted that Canada lags behind the U.S. in e-commerce penetration due to lower population density, a smaller market size, and slower consumer adoption.

In Latin America, online retail sales in the top six countries — Brazil, Mexico, Argentina, Colombia, Peru and Chile — are expected to grow from $109 billion in 2023 to $192 billion by 2028.

“The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. “However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately to succeed.”