Ecommerce Trends in 2021
Shopping behaviours in 2020
In a study carried out by the United Nations Conference on Trade and Development (UNCTAD) and Netcomm Suisse eCommerce Association in October 2020, it was revealed that COVID-19 has accelerated a shift towards a new digital world and triggered changes in online shopping behaviours that could change the ecommerce landscape forever.
The survey covered 3,700 consumers based in nine emerging and developed economies – Brazil, China, Germany, Italy, the Republic of Korea, Russian Federation, South Africa, Switzerland and Turkey.
The study showed that the essential role that ecommerce has played during the pandemic could be long-lasting, therefore transforming domestic retail frameworks and international trade principles, enabling unique growth opportunities nationally and internationally.
The analysis also revealed that online buying behaviour has accelerated fastest in emerging markets. The sectors that experienced the greatest growth were ICT/electronics, gardening/do-it-yourself, pharmaceuticals, education, furniture/household products and cosmetics/personal care categories.
International ecommerce trends 2021 and predictions for the future
International ecommerce represents an important growth opportunity. According to a recent survey carried out by Flow Commerce, it was found that 67% of online apparel shoppers within 11 top global markets made a cross border purchase in the first half of 2020. In fact, cross-border B2C ecommerce amounted to some $440 billion in 2019, an increase of 9% over 2018.
A Global Market Outlook report forecasts that global ecommerce will grow at a Compound Annual Growth Rate (CAGR) of almost 20% to reach $18.89 trillion by 2027.
The factors impacting this growth are the increasing use of search engines which is accelerating the discovery of new brands and online retailers. High mobile penetration (particularly in Asia-Pacific) is also driving cross-border purchases.
Mobile commerce sales were forecast to see a growth of 25% from 2019 – 2020 and this is set to rise further in 2021. There are 3 billion smartphone users worldwide, so m-commerce is likely to show impressive growth.
Due to social distancing rules more consumers have been using social media platforms to communicate with friends and family, therefore social shopping has become more popular, and many retailers are using social platforms as their global customer base.
According to Research and Markets, the majority of online consumers actually preferred international online shopping over local due to the wider variety of products available. The same report describes how despite a decrease in global cross-border sales due to the COVID-19 onset, the B2C ecommerce market is set to surge by 30% from 2019 to 2026. In Europe, the value of cross border B2C ecommerce is predicted to surge as well by 2022.
Overall, shopping trends in 2021 for online goods and services is very much part of the “new normal” which means the ecommerce market is primed for growth.
The Asia-Pacific region is set to be the fastest growing region within this sector with China at the front and sales from the whole region rising from $1.5 trillion in 2019 to $2.5 trillion in 2024. Asia Pacific’s smartphone penetration rate explains this trend, with more than three-quarters of online retail sales being carried out via mobile phone.
B2B and ecommerce: leveraging opportunities
In terms of B2B international sales, despite disruptions in supply chains and surges in orders, many opportunities have arisen within ecommerce. It has been reported that more than three quarters of buyers and sellers actually prefer a digital service as opposed to human engagement for reasons of safety, ease of placing orders and availability of buyer/product information. It would appear that speed and convenience are now key, and an ecommerce platform will be essential to retain and acquire customers in our new digital world.
B2B leaders who were first forced to create a digital platform for their customers are now embracing their “new normal” and enhancing their digital provision, viewing digital as the way to go. In a study carried out by Mckinsey, over 11 countries of which 3 were emerging markets and 8 developed economies, the new digital model has proved to be 15% – 31% more effective at reaching and serving new customers. Emerging markets have seen the biggest impact, for example B2B companies in Brazil were 21 – 35% more effective than models used before the pandemic.
Traditionally, B2B buyers would purchase small items online, not so now with 70% of B2B decision makers saying they are open to making new, fully self-serve or remote purchases over $50,000, and 27% would spend more than $500,000. Remote engagement also proves to be a positive way to sell and prospect.
Ecommerce post COVID and Brexit
We can see that the shift to ecommerce across B2B and B2C markets has transformed the way businesses will trade for a very long time to come and this presents many opportunities.
Since the UK became an independent trading country in January 2021, a growing number of businesses have been looking to appeal to a wider global audience, which means that translation and localisation will be key to engaging with new and existing customers. Translation and localisation of website content, marketing communications, internal and external post-Brexit material, will be key to international success in the ecommerce world we now live in.
Back in 2013, three years before the Brexit vote, The British Council presented forecasts on which languages would be the most important to the UK for the next 20 years. These predictions were based on the country’s business needs, international trade targets, diplomatic and security concerns and finally internet usage. They identified the top five languages to be Spanish, Mandarin, Arabic, German and French.
Fast forward to 2017, post-Brexit vote, and these five languages still remained the priority languages to help the UK to secure its position in the world.
Then in July 2020, the British Academy, the British Council and the Association of School and College leaders revealed that language learning would be vital to pandemic recovery and published a strategy to boost language learning, which has fallen drastically in recent years. They highlight that the economic cost of the UK’s linguistic underperformance, in terms of lost trade and investment has been estimated at 3.5% of GDP.
Moving on to present day 2021, now that we can see how COVID has pushed businesses and consumers online, it is clear that ecommerce localisation in multiple languages has never been more important to effectively reach larger markets. For example, in China, less than 1% of the overall population speak English, in Japan and Russia this figure increases from 10 -15%. Earlier on in this piece, we talked about how the Asia-Pacific region is set to see the largest ecommerce growth rate, so speaking in the native language of countries within this region will be very important.
Before Brexit, the UK benefited from all trade deals the EU had negotiated with another country. When the UK left, the EU had approximately 40 trade deals with more than 70 countries. Since Brexit, the UK has succeeded in negotiating rollover deals with 66 of these countries.
The UK government is still working on securing free trade deals with a number of countries. On 15th June 2020, the UK-Australia trade agreement was announced, we are yet to find out the full details, however, the UK government has stated that it will be cheaper to trade British products such as cars, Scotch whisky, biscuits and ceramics.
The UK also recently signed a deal with Japan in October 2020, which was the first to differ from an existing EU deal. The total worth of imports and exports was £31.6bn in 2019, or 2% of the UK’s total trade.
While the Free Trade Agreement between the UK and EU has disrupted cross-border sales due to tariffs, bureaucracy and taxes imposed on goods traded, the UK is still viewed as an ecommerce powerhouse. By and large this is due to popular brands and a wide variety of products available. UK businesses are changing mindsets, with some setting up in EU countries to avoid trade disruptions.
UK businesses must now embrace the opportunities presented by Brexit and challenges of COVID together to reach out around the world to improve its economic position, build trust and strengthen influence in an international digital world. Communication in multiple languages will play a critical role in solidifying these concepts.
If businesses can demonstrate readiness and openness to change this will enable both domestic and international success in our rapidly evolving ecommerce world.
Here at Ultimate Languages, we believe by mutual collaboration we can help businesses recover and succeed by providing tailored solutions and delivering value.
If your business plan to thrive includes international markets, we can help, contact us today.