The COVID-19 pandemic, an ongoing conflict in Ukraine, and inflation have severely disrupted many industries in the US, and e-Commerce is no exception. According to the Influencer Marketing Hub, online sales saw a dramatic surge during the pandemic.
While COVID-19 has finally subsided and recent news suggests inflation could be waning, other essential issues may impact the e-Commerce sector in 2023. For instance, as many as 300,000 American companies have supply chain connections in both Ukraine and Russia—two countries that are now engaged in a critical military conflict. As a result, many organizations have faced costly disruptions and shutdowns in their product supply.
In addition, Russia is a major fuel producer, and its war in Ukraine has played a leading role in increasing fuel costs. In response, online retailers like Amazon introduced fuel and inflation surcharges or implemented various price increases.
This article will explore factors that could help the US e-Commerce industry stabilize in 2023.
e-Commerce Could Deliver Healthy Growth this Year
According to a recent Insider Intelligence report, the overall e-Commerce landscape in 2023 has promising potential—m-Commerce will make up 6.5% of total worldwide retail sales. By 2026, this figure will increase to 8.7%. This report suggests that nearly all retail categories will switch to online sales in the next five years.
E-commerce expansion is also likely to sustain despite traditional sales drivers, such as computer and consumer electronics, decreasing due to inflation. Moreover, key retail product categories, such as cars and parts, food and beverage, and health and personal care, will gain popularity in 2023.
The rise of online shopping in the following years will create demand for
digital wallets such as Google Pay, Apple Pay, and PayPal. In fact, by 2026, more than 60% of the global population will be relying on digital wallets, which will complement (and possibly fuel) e-Commerce growth.
m-Commerce and re-Commerce
While we briefly explored the growth of m-Commerce in 2023, this sector, and re-Commerce will become priorities for consumers. Based on research by Tidio, m-Commerce sales will exceed $510 billion in 2023, and over 40% of online shoppers rely on mobile to complete transactions.
Mobile commerce is gaining significant momentum among consumers because it enables faster, more convenient online shopping. As customers are also more likely to have quick access to their smartphones instead of computers, they can browse products from any location, for example, customers can research businesses while waiting for assistance in the bank or at the dentist.
Re-Commerce will also expand this year to nearly $200 billion in 2023, a $20 billion increase from the previous year. By 2025, this industry will be slightly below $250 billion—93% of shoppers confirm that high inflation has influenced their decisions to purchase and resell second-hand items.
Why Chinese e-Commerce Apps Are Likely to Flourish
Chinese online shopping apps, like Temu, are now playing an increasingly crucial role in US e-Commerce. According to The Wall Street Journal, modest prices and strategic use of social media marketing strategies are the main reasons for the popularity of these apps.
However, organizations must consider political risks as US-China relations could worsen. Yet, Chinese apps have the potential to influence e-Commerce globally, and in turn, the US while giving consumers new ways to shop online.
For instance, as confirmed by Insider Intelligence, Temu has made a significant impact in e-Commerce. In four months, this site’s traffic reached 44.5 million unique visitors. The report further indicates why customers value this app, including:
- Affordable deals that appeal to consumers’ concerns about rising inflation.
- Reasonably priced products
- A sound and expensive TikTok marketing campaign to raise awareness and loyalty.
The Continuous Expansion of e-Commerce
According to Shopify, the global e-Commerce market will exceed $5.9 trillion in 2023, reaching $7.6 trillion by 2026. The massive growth of the e-Commerce industry will incite worldwide competition for shares in digital commerce. China has emerged as a favorite in the global race for e-Commerce supremacy. The Chinese e-Commerce market has surpassed the US and other economic powerhouses. Based on data from eCommerceDB, China’s e-Commerce revenue is worth $1,487,233 million in 2023, boasting a compound annual growth rate (CAGR) of 12.4%.
In addition to the influence China has on US e-Commerce, increased popularity in m-Commerce and re-Commerce will shape how consumers make purchasing decisions. Although these trends are caused by high inflation, organizations must prepare for how the e-Commerce landscape may shift in 2023.
In Closing
The COVID-19 pandemic had several ramifications on the US economy. While inflation rates could wane, consumer e-Commerce habits are drastically evolving. First, customers will be more active in the m-Commerce and re-Commerce sectors due to the financial pressures of inflation.
Fortunately, research suggests that 2023 is a promising landscape for e-Commerce sales, and while traditional products may lose traction, many other categories will gain popularity. The use of Chinese shopping apps will also increase among US shoppers, offering them economical solutions for various products. Overall, China will influence the US e-Commerce industry, and despite inflation, online shopping is on the rise.
