Consumers spent $900bn more at online retailers globally in 2020

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Covid-19 accelerated e-commerce around the globe and forced retailers to shift to digital. As the pandemic kept consumers around the world at home, nearly everything from groceries to gardening supplies was purchased online.

According to Mastercard’s latest Recovery Insights report, this amounted to an additional $900bn being spent in retail online around the world in 2020. Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019.*

For retailers, restaurants and other businesses large and small, being able to sell online provided a much-needed lifeline as in-person consumer spending was disrupted.

Roughly 20-30% of the Covid-related shift to digital globally is expected to be permanent, according to Mastercard’s Recovery Insights: Commerce E-volution. The report draws on anonymised and aggregated sales activity in the Mastercard network and proprietary analysis by the Mastercard Economics Institute. The analysis dives into what this means by country and by sector, for goods and services, and within countries and across borders.

“While consumers were stuck at home, their dollars traveled far and wide thanks to e-commerce,” says Bricklin Dwyer, Mastercard chief economist 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.”

Key trends

While the digital transformation has been neither universal nor consistent – due to geographical, economic, and household differences – the report uncovers several key overarching trends:

• Early digital adopters go into overdrive: Economies that were more digital before the crisis – such as the UK and US – saw larger gains in the domestic shift to digital that look more permanent than the countries that had a smaller share of e-commerce before the crisis. In MEA, the e-commerce share of retail sales pre-crisis was 2.2%, rising to 4.6% at the peak of the crisis. The current level stands at 2.4%.

• Grocery and discount store digital gains look sticky: Essential retail sectors, which had the smallest digital share before the crisis, saw some of the biggest gains as consumers adapted. With new consumer habits forming and given the low pre-Covid user base, we anticipate 70-80% of the grocery e-commerce surge to stick around for good.

The Mastercard study on consumer spending asserts this, as it revealed that 68% of South African consumers are shopping more online, with 54% buying groceries online since the onset of the Covid-19 pandemic.

• International e-commerce rose 25-30% during the pandemic: International e-commerce got a boost both in sales volume and the number of different countries where shoppers placed orders. With infinitely more choices at their fingertips, consumer spending on international e-commerce grew around 25-30% year over year from March 2020 through February 2021.

In countries that face isolation challenges when it comes to international shipping logistics for direct-to-consumer sales, like South Africa, Australia, and Brazil, there has been less international e-commerce.

• Consumers increase their e-commerce footprints, buying from up to 30% more online retailers: Reflecting expanded consumer choice, our analysis shows that consumers worldwide are making purchases at a greater number of websites and online marketplaces than before. South African consumers are supporting their favourite local small businesses, with 63% saying that they are making a conscious effort to shop online at these stores.

• Shift to electronic payments accelerated: Even in store, Covid-19 accelerated the transition to digital – with more consumers moving from plunking down cash to touch-free payments. The Mastercard contactless study last year revealed 75% of South African respondents use contactless payments with 71% preferring to shop at merchants where contactless is accepted.

Mastercard launched Recovery Insights last year to help businesses and governments better manage the health, safety and economic risks presented by Covid-19. The initiative draws on Mastercard’s analytics and experimentation platforms, its longstanding consulting practice and data-driven insights to deliver relevant and timely tools, innovation and research.

* The Mastercard Economics Institute drew on activity within the Mastercard network and modeled global retail e-commerce across all payment types to determine the additional retail e-commerce spending based on the deviation from the trend.

Takealot competitor Everyshop officially launches

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After a month of public testing in March, the new South African online marketplace Everyshop has officially launched, offering delivery across South Africa.

Everyshop is part of Pepkor’s JD Group, the operator of local retail chains like Russels, Bradlows, HiFi Corporation and Incredible Connection. The marketplace has been described as a likely Takealot competitor, with an extensive product range spanning electronics and appliances, furniture, fashion, beauty, fitness, DIY and more.

“At Everyshop, we love brands and we know our shoppers do too, that’s why we’ve created a platform that houses the world’s leading brands such as Nike, Apple, Revlon, Samsung and many more. Everyshop also supports new South African entrepreneurs and already includes a wide range of local brands such as Me&B, The T-shirt Bed Co. and Move Pretty, to name a few,” Everyshop said in a statement.

According to JD Group, the new marketplace was designed to be mobile-first and easy to navigate, with a tailored departmental shopping experience that addresses very specific consumer needs, such as ‘Work from home’, ‘Enjoy the ultimate entertainment experience’ and ‘Achieve the latest on-trend fashion and beauty look’.

Nationwide logistics infrastructure

The marketplace boasts a nationwide distribution network that includes two dedicated fulfilment centres and 15 large-scale distribution centres, and promises customers fast and affordable fulfilment across categories – from small high-value goods to large items like appliances and furniture.

One of the next steps for Everyshop includes the onboarding of approved retailers as marketplace partners to further enhance its merchandise offering.

Peter Griffiths, chief executive officer at the JD Group, commented, “JD Group, a division of Pepkor Holdings, already offers extensive online shopping to South African consumers through its retail brands that include Incredible Connection, HiFi Corp, Bradlows, Rochester and Sleepmasters. Immense know-how, e-commerce and logistics capabilities and infrastructure have been built up to provide world-class online shopping experiences with swift and efficient delivery options.

“With the support of our existing retail businesses we have partnered with some of South Africa’s most well-known and loved brands across a number of industries including specialist electronics and appliances, furniture, fashion, footwear and DIY to deliver true value to the South African shopper.”

Griffiths added, “We are proud to be part of Pepkor Holdings with its many trusted brands and combined we are a diversified retailer of clothing, footwear, furniture, household appliances and consumer electronic goods. Now even more is offered with Everyshop – our brand new online platform.”

As part of the official launch, Everyshop is offering customers who register a R100 discount code towards their first purchase of R500 or more.