Forrester predicts that online retail sales will reach $6.8 trillion

A new report from Forrester projects that global online retail sales will grow significantly from $4.4 trillion in 2023 to $6.8 trillion by 2028, at a compound annual growth rate of 8.9%. The report, titled ‘Global e-Retail Forecast 2024-2028’, provides a detailed five-year forecast of online and offline retail sales in 40 countries around the world.

Despite the explosive growth of e-commerce, the report highlights that physical stores will continue to hold a significant share of the retail market. By 2028, 76% ($21.9 trillion) of global retail sales, projected to reach $28.7 trillion, will be offline. This continued prominence of brick-and-mortar outlets indicates that retailers must maintain and refine their omnichannel strategies to ensure a seamless shopping experience regardless of the medium.

Analyzing different regions, the report highlights disparities in e-commerce retail maturity. Advanced economies such as the United States, the United Kingdom and South Korea show higher levels of e-commerce penetration, driven by greater Internet access and digital skills. Emerging markets, particularly in Asia-Pacific, Eastern Europe and Latin America, are rapidly catching up, driven by the growing adoption of smartphones and mobile commerce.

In the Asia-Pacific region, a standout region, online retail sales from key markets including China, South Korea, Japan, India and Australia are expected to grow from $2.2 trillion in 2023 to $3.2 trillion dollars by 2028. China and South Korea lead the global market in online retail penetration, with each expected to reach more than 40% penetration by 2028. In Southeast Asia, the six largest countries – Indonesia, Thailand, Vietnam, Malaysia, the Philippines and Singapore will expand their retail e-commerce sales from $93 billion in 2023 to $193 billion in 2028, accounting for 17.4% of total retail sales in the region. It is worth noting that Indonesia is the leader in penetration growth, followed by Malaysia and Singapore.

The Americas also show promising growth potential. In the US, online retail sales are projected to reach $1.6 trillion by 2028, accounting for 28% of total US retail sales. On the other hand, online retail sales in Canada are projected to reach $83 billion by 2028. Differences in market size, population density and consumer adoption levels contribute to slower penetration rates in Canada compared to the US. In Latin America’s six largest countries – Brazil, Mexico, Argentina, Colombia, Peru and Chile – online retail sales are projected to grow from $109 billion in 2023 to $192 billion by 2028.

Key markets in Western Europe are poised for growth, with online retail sales expected to grow from $508 billion in 2023 to $773 billion by 2028. The UK is leading the region, followed by Germany, France, Italy and Spain. In contrast, Eastern Europe has a lower level of online retail penetration. Nevertheless, Forrester forecasts that the five largest countries in this region – Russia, Poland, Czech Republic, Romania and Hungary – will see online retail sales grow from $72 billion in 2023 to $126 billion by 2028.

Jitender Miglani, principal forecast analyst at Forrester, highlighted the influential factors driving this growth: the proliferation of online marketplaces, social commerce, live streaming and direct commerce. “The maturity and growth opportunities of e-commerce vary significantly by region,” he noted. Retailers and brands need a comprehensive understanding of these key factors to effectively adapt strategies to their specific markets.