The acceleration of ecommerce throughout the globe over the course of 2020 was hard to ignore, as consumers shopped online often out of necessity, and brands were forced to rapidly change their strategies as a result.
From consumer behaviour to demand prediction to retention, the events of the last year have altered or sped up almost every facet of online retail.
We’ve rounded up a selection of stats to try to illustrate how the pandemic has impacted, and continues to impact, the ecommerce industry, dating back to April 2020. We’ll update this post regularly as the world of online shopping continues to evolve throughout 2021.
You can also read Econsultancy’s marketing and advertising stats roundup, again looking at the impact of Covid-19.
Click the contents below to jump between sections…
- Ecommerce penetration
- Amazon and marketplaces
- Black Friday and Singles Day 2020
- Fashion and department stores
- Customer experience
US ecommerce penetration accelerated by 10 years in 90 days in Q1 2020
The rate of ecommerce penetration in the US grew by 10 years in a 90-day period in 2020, reaching around 33%, according to data from McKinsey.
The result of this acceleration, brought about by rapid digital transformation, has caused the gap in corporate profits between the best and worst performing brands to widen further than ever before. In total, McKinsey predicts the top quintile of industries that has fared well over the course of the pandemic could accumulate $335 billion additional profit, while the quintile that has fared the worst could lose $303 billion.
Organisations that have invested in superior customer experiences, following the shock of the coronavirus outbreak, have emerged stronger than they did before it began. It is thought that these brands have seen triple cumulative shareholder returns against other companies, according to analysis.
These figures are despite very volatile retail performance over the past year, with April seeing the largest drop in US retail sales ever recorded. Fifty percent of American households are reported to be actively reducing their household spend, while a further 20% have abandoned past brand loyalty in favour of others that were more convenient, inexpensive or had better stock availability.
See how the U.S. has leapt 10 years forward in 90 days’ time from physical channels to e-commerce. Also, how the acceleration in digital transformation by companies is widening the gap between leaders & laggards and more. https://t.co/hybQkCcBmu pic.twitter.com/mBt7mMc0kI
— McKinsey & Company (@McKinsey) November 9, 2020
Online as a share of total retail in the UK reached 33.8% at its peak in 2020
The ONS has revealed that, during the first peak of the coronavirus outbreak in May, online sales as a share of total retail (excluding fuel) reached 33.8%. Interestingly, online sales percentage dipped only slightly to 27.6% by September when non-essential brick-and-mortar shops had mostly resumed trading, a figure which was still well above pre-Covid levels of 20.1% in February. As a result, this data suggests the acceleration of online shopping in the UK is well and truly here to stay and has fundamentally shifted the state of the retail industry.
Since local and national lockdowns began being reintroduced in the Autumn, online sales have grown once again. In October, 28.5% of all retail sales came through online channels and at the end of November, this had increased rapidly to 31.4%.
Throughout the year, almost every retail subcategory, with the exception of pharma, experienced a significant dip in online sales lasting from March to June as the first lockdown restrictions were enforced. Some made better recoveries than others as they approached the autumn, with electronics, music and video, furniture and toys and sports equipment faring the best out of the bunch.
After December’s Christmas rush – which has been touted by many as record-breaking for the ecommerce sector – and as the UK enters another lockdown in the early months of 2021, it would be unsurprising to see the share of online sales in the UK grow to even loftier heights.
Online shopping has been gaining a greater share of retail sales for a number of years, but the impact of #COVID19 saw it rise sharply as many shops closed.
— Office for National Statistics (ONS) (@ONS) December 9, 2020
Global retail ecommerce predicted to total $3.9 trillion in 2020
Data from GroupM, released in December, predicts global retail ecommerce, including automotive but excluding food and delivery services, will total $3.9 trillion by the end of 2020 – equating to 17% of all retail sales. In China, these online sales will rise to 25% of the entire retail market in the region.
As a rule, analysis found that geographic areas with lower ecommerce penetration, such as Canada and Australia, saw much faster ecommerce growth this year than those where ecommerce was already a big player before the pandemic hit.
The accelerated adoption of retail ecommerce across the world has put some regions ahead of others in terms of expected growth by the end of 2021. China, ever the leader in this area, could see online retail amount to 27.3% of its total retail sales, followed by the UK (19.9%) and the US (16.2%).
Increased normalisation of online shopping, which became more of a habit for many consumers this year, is not the only factor. Brands’ greater focus on omnichannel experiences, including services like click and collect, as well as better demand prediction, will ensure retailers make the most of the recovery from Covid-19. Improvements in product discovery and branding are also expected to be high up on the list of priorities next year.
By 2024, it is estimated that retail-focused ecommerce sales will amount to $7 trillion annually, or one-quarter of all global retail for that year. If this growth trajectory continues, on average, in low double digits, this could reach to $10 trillion in sales by 2027.
Tesco’s online delivery capacity doubles in H1 2020 to meet online demand
Tesco’s 2020/21 interim results reveal online delivery capacity doubled to 1.5 million weekly slots as a result of heightened demand at the peak of the coronavirus outbreak in the UK. It also stated that it had served 674,000 vulnerable or shielding customers in the 26 weeks to 29 August 2020.
The report shows the brand spent £533 million on Covid-19 safety measures for its staff and customers throughout the pandemic thus far.
Tesco’s new Chief Executive, Ken Murphy said in a statement, “The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout.”
Online share of UK grocery sales doubled in December 2020
The Grocer reports Nielsen figures, published in January, which indicate the online share of UK grocery sales doubled in December 2020 to 12.5%, making last December the biggest on record for the sector.
In fact, supermarkets saw record December sales across all channels, with total sales growing 8.4% in the four weeks ending Boxing Day. Overall, customers spent £12 billion during this period, of which some £1.3 billion went through online channels. Further data shows that 8.5 million UK households, equating to a little over 30% of total households, shopped online for groceries over the festive season – 5.7 million more than in the same month of 2019.
Unsurprisingly, instore visits fell 10%, amid concerns for safety during the second wave of the coronavirus, but consumers spent on average £20 more than usual across both online and offline settings.
Lidl experienced the greatest year-on-year growth for the 12 weeks to Boxing Day at a staggering 20.9%. This was followed by Morrisons, which saw 9.2% growth, while Tesco and Sainsbury’s saw increases of 8.6% and 8.1% respectively.
These figures are despite of last-minute restrictions placed on holiday gatherings in large areas of the UK. This appeared to have caused some consumers to hold back on their spending over the last two weeks leading up to Christmas, buying less traditionally festive foods such as steak, which saw sales up 57% during that fortnight, perhaps as a last-ditch alternative to Christmas dinner. Meanwhile, sales of confectionary rose just 2%, reflecting fewer occasions for socialising and gifting this year than in previous years.
Ocado named 2020’s fastest-growing UK brand
BrandZ has named grocery chain Ocado as the UK’s fastest growing brand in its annual Top 75 Most Valuable Brands report.
The company jumped 16 places in the Top 75 list for 2020, following a 63.3% growth in brand value change since 2019, settling at number 18. Its online-only formula, unlike other brands in the sector which also have brick-and-mortar stores, places it in an excellent position for growth through digital innovation. According to the report, demand for its services during the peak of the pandemic was at 10 times it usual level for the time of year.
Others that have seen particularly fast growth this year also fall within the food category – Deliveroo, growing by 40% in brand value change in 2020, made number 29 on the list, while Just Eat grew by 19%, placing it just below Ocado at number 20.
Vodafone came out on top in the top 75 most valuable brands list, followed by HSBC, Shell, BP and BT, despite all of these brands measuring double-digit declines in brand value since 2019. In fact, just 10 brands out of all 75 experienced growth overall, highlighting the massive impact Covid-19 has had on the majority of verticals. The rest saw declines or flat growth or were new to the list in 2020.
Suburban and rural consumers drove the bulk of online grocery shopping growth during the spring 2020 peak of the pandemic
Research from GlobalWebIndex has confirmed that suburban and rural consumers helped drive the bulk of global online grocery shopping growth during the first peak of the pandemic in Q2 2020.
Pre-Covid, most consumers that took advantage of the convenience that online grocery shopping affords were millennials living in urban settings. From Q1 this year, those in the Gen Z and Boomer categories have developed more active shopping behaviours in this sector, particularly those that live outside of major population centres.
Globally, the number of internet users in suburban areas that had purchased a grocery item online in the last month rose from 30% in Q1 to 34% in Q2, and those in rural areas followed a similar trend (26% in Q1 to 30% in Q2). Meanwhile, consumers living in urban regions only drove growth of one percentage point over this period.
Latin America saw the largest shift in online grocery shopping adoption throughout this time. The percentage of those who are mainly responsible for grocery shopping in their households that had ordered groceries in the last month started at just 22% in Q1 and grew to 29% by the end of Q2 – a 31% uplift. This was followed by North America, which saw a 23% positive change.
Growth appeared slow in Europe by comparison, with only a 9% increase, however individual countries in the region varied massively. The UK saw the greatest change, and three in 10 internet users had shopped online for grocery products by the second quarter.
Third party sellers on Amazon saw a 60% growth year-on-year in Black Friday weekend sales
In a blog post on 1st December, Amazon revealed that sales performance on Black Friday weekend, which includes Cyber Monday, helped the 2020 holiday season become the ‘biggest yet’ for the company.
Black Friday promotions saw third-party sellers grow their sales by 60% year-on-year, surpassing $4.8 billion worldwide. Amazon also claimed that more than 71,000 small and medium sized businesses (SMEs) selling through the marketplace had made more than $100,000 during the holiday season at the time of publication.
Meanwhile, SMEs based in the US have seen an average of 9,500 products sold via Amazon every minute since October. Record sales levels have enabled independent businesses using the platform to create an estimated 2.2 million new jobs around the globe.
Best-sellers in the US so far since the 15th October (the beginning of the company’s Holiday Dash deals event) have included several Amazon branded items including the Echo Dot and Amazon Smart Plug. Ancestry and DNA services like 23andMe have also been popular with shoppers, as has Barack Obama’s latest book ‘A Promised Land’.
Self-care, toys and pets were among the biggest trending categories in the region as people began searching for gifts earlier than usual. Skincare, pyjamas and LEGO kits also shared the spotlight with consumers preparing for more time indoors in the lead up to Christmas. The company also reported more customers signing up for its Amazon Pharmacy service as a convenient way of receiving their prescriptions.
UK retailers see a 23% increase in online store sales on Black Friday, YoY
Analysis from Nosto has found UK sales in online stores soared 23% on Black Friday 2020. This was accompanied by a 35% rise in online store visits and a 2% increase in conversion rates compared to numbers from the same event in 2019. However, there was a 4% decline in average order value, likely due to heavier discounting than usual to get consumers to part with their cash amid financial uncertainty.
Globally, pet supplies and home and garden came out on top compared to other verticals, seeing a 60% and 52% increase in online sales respectively. The majority of the remaining categories analysed saw growth compared to last year’s Black Friday results, except for fashion and accessories, which experienced a 4% decline despite a 7% uplift in traffic. This category also saw a 5% decrease in conversion rate and a 3% drop in average order value.
Overall, global online consumer behaviour changed quite significantly over the Black Friday Cyber Monday weekend. In 2020, there was a 24% increase in the number of pages viewed and a 20% increase in the time spent on any one page. Meanwhile, bounce rate dropped by 2%, suggesting that shoppers, more than ever, are making more purposeful and considered purchases during the event.
Interestingly, there was also a 30% uplift in the number of product recommendations shown, indicating that retailers have put in place additional measures to ensure a personalised experience for visitors and a greater chance of conversion and/or upselling.
Alibaba’s Singles Day sales event breaks records
November 11th 2020 saw Alibaba pull in record sales during one of the largest retail events in China – Singles Day. Purchases made in the 11-day campaign period covering the unofficial holiday topped $74 billion, a new high for the company and a 26% increase on 2019’s event.
In its press release, the ecommerce giant said that more than 470 brands using Alibaba made 100 million yuan in gross merchandise value (GMV) as a result of the shopping festival. The platform also claimed it had processed 583,000 purchases per second during the peak of activity across the campaign. Of the quarter of a million brands that participated, 31,000 originated from outside of the Chinese market. 2,600 of these were joining the event for the first time.
Digital tools came into their own during the Singles Day event this year. According to Alibaba’s data, its AI customer chatbot dealt with 2.1 billion questions, and more than 30 livestreaming channels on Taobao Live (Alibaba Group’s livestreaming tool) made over 100 million yuan in GMV.
Rival JD.com made 271 billion yuan (US $40.9 billion) in sales throughout the holiday, while major omnichannel retailer Suning.com exceeded 5 billion yuan (US $756 million) in omnichannel GMV across its ecommerce platform, Tmall shop, and livestreaming outlets 19 minutes after midnight on November 11th, the South China Morning Post reported.
With Black Friday just around the corner, the significant growth in purchase activity during China’s biggest shopping event of the year could indicate what is to come for online retailers this festive season, particularly for those with outstanding digital capability.
35% of all UK online purchases during first UK lockdown were made via Amazon
A report from Wunderman Thompson Commerce has revealed that Amazon’s share of the UK ecommerce market rose to 35% during the first lockdown, up from 30% at the end of 2019, highlighting the retailer as one that has benefitted most from the pandemic.
One fifth of the 2000 UK consumers surveyed claimed that their intention to purchase from Amazon after the coronavirus outbreak ends had increased, even though a similar number (21%) said that they were concerned about the company’s growing dominance in the industry.
Sixty-one percent of respondents cited free delivery as a key purchase driver, followed by availability (57%) and price (53%), while the most sought-after change to consumers’ online shopping experience was free returns.
Amazon marketplace sellers thought to have sold an additional $95 billion worth of products in 2020
Marketplace Pulse has estimated Amazon marketplace sellers sold an additional $95 billion worth of products last year than they did in 2019. That’s around $295 billion in total.
Taking its place amongst the winners of the pandemic – which include brands like Walmart, Etsy and Target – Amazon is also predicted to have sold $180 billion worth of products (worldwide) in first-party sales (Amazon Retail), up from $135 billion in 2019 and $117 billion in 2018.
Amazon’s GMV – Gross Merchandise Volume – is thought to have increased by 42% year-on-year in 2020, with its marketplace arm accounting for 62% of its total global GMV (although this equates to just a 2% increase in total share since last year).
March was a particularly notable month for the marketplace as the coronavirus began to overcome multiple regions of the globe. Products sold via the platform accumulated a 46% share of the top 100 most searched queries related to Covid-19 as consumers rushed to buy essentials and safety equipment like PPE and sanitiser. Meanwhile, more than half of new US Amazon sellers joining the marketplace across the month were located in China, an increase of 39% on the same period in 2019.
Amazon sales up 37% year-on-year in Q3 2020
A press release outlining Amazon’s Q3 financials has confirmed that the company’s net sales grew 37% year-on-year worldwide, totaling $96.1 billion for the period and surpassing estimates of $92.7 billion. North American net sales were up by 39%, while international net sales rose by 37%.
Sales of its subscription services grew 33% year-on-year, and Amazon Web Services (AWS) grew by 29%. Total profits were up by 200% to $6.3 billion compared to the same quarter the year before, beating Amazon’s previous record of $5.2 billion profit back in Q2.
While Prime Day, which took place from October 13-14, wasn’t included in these results, the company hailed it as the “two biggest days ever for small and medium businesses in Amazon’s stores”. $3.5 billion in sales were made during this event alone, equating to a 60% uplift compared to 2019’s event. Prime members also saved $1.4 billion on goods across the two days, according to the statement from Amazon.
Looking ahead to Q4, sales are expected to reach between $112-121 billion, or to grow between 28-38% year-on-year, as customers opt to do much of their holiday shopping online.
Ebay’s Q3 revenue rises 25% year-on-year in 2020
Ebay’s Q3 2020 financial statement has revealed that its revenue rose 25% to $2.61 billion compared to the same period in 2019, beating expert estimates of $2.48 billion. In the quarter ending 30th September, the marketplace also reported that its number of annual active buyers increased by 5% to total 183 million globally.
With Amazon’s sales expected to rise further as the year draws to a close, these strong growth figures are in line with an accelerated trend in one-stop-shop online marketplace shopping amid the coronavirus pandemic.
Ebay expects its Q4 2020 earnings to reach up to $2.71 billion, boosted by holiday purchases and has raised its full-year sales outlook to the region of $10.04 to $10.11 billion. This equates to a 19-20% total revenue growth across 2020, where original forecasts predicted a 14-16% growth.
Up to 70% of John Lewis sales came from its online channels in 2020
Online channels accounted for 60-70% of John Lewis sales over the course of 2020, up from 40% before the pandemic, according to details from the retailer’s report Shop Live Look 2020.
The data reveals mobile and desktop browsing of the brand’s website increased by 55% year-on-year, while tablet traffic declined by a whopping 41%, reflecting wider trends in device popularity across the retail industry.
Evenings remained the most popular time to browse, but online orders were more spread out throughout the day, peaking between 11am and 4pm, whereas they were typically placed between 7pm and 10pm in 2019. Meanwhile, the number of John Lewis purchases destined for home delivery rose a quarter on last year, quadrupling in the case of Waitrose.com orders, and 55% more products were sent to others as gifts.
Some of the most popular items bought by John Lewis customers over the last 12 months included beauty tech (such as electronic facial devices) – up 178% – chess sets (up 121%) and nostalgic toys, like Scalextric kits (up 100%).
However, sales of products such as suitcases, high heels and clutches and ‘party handbags’ all saw dramatic declines of 69%, 62% and 56% respectively thanks to customers’ dramatic lifestyle changes brought on by the pandemic.
Next online sales up 36% year-on-year over Christmas period 2020
Online sales for the UK fashion and department store Next were up by 36% year-on-year over the nine weeks to 26th December 2020, it announced in January. As a result, total full-price sales were just 1.1% down on the same period in 2019, as online sales compensated for profit lost from closed brick-and-mortar stores.
The week commencing 6th December saw the consumers purchase the most via Next’s online channels, reaching nearly £80 million in total value, before dropping off slightly the week after, suggesting that much of the public opted to get their Christmas shopping done earlier than usual (as predicted).
Childrenswear, loungewear, sportswear and home were the top performing online categories over the festive period, while workwear and occasionwear were, naturally, the least popular among Next customers. The company also reported returns rates were much lower than usual at 21% compared to 35% during the same nine weeks of 2019.
Next says it predicts full-price product sales to decline by 14% over January in the midst of another national lockdown. However, it has adjusted its forecast pre-tax profit from £365 million (estimated in October) to £370 million for the full year.
M&S online clothing and homeware sales grew by 47.5% in Golden Quarter
In a trading statement, Marks & Spencer has revealed that, despite like-for-like sales falling 7.6% over the ‘Golden Quarter’, online clothing and homeware sales grew by 47.5% year-on-year to £353 million. This figure rose to 62.2% for the month of November 2020 during the second national lockdown, before dropping off a little in December to 47%.
The press release indicated that these sales were ‘heavily biased’ towards sleepwear and leisurewear thanks to Covid-19 having a continued impact on consumers’ lifestyles. Overall, full-price sales of clothing and homeware for the brand declined by a modest 4.8%, while online sales doubled in comparison to the same period the year before.
Online-only fashion retailer In The Style sees 169% increase in sales in Q4 2020
The Retail Gazette reports a 169% increase in sales for online-only fast fashion retailer In The Style in the 13 weeks to 31st December 2020. Total sales for the quarter were £13.5 million, while sales through its dedicated mobile app rose by more than 500%, according to its data. In fact, in-app sales accounted for more than half of all sales for the brand over this period.
It wasn’t just sales that saw a huge boost for In The Style over the 2020 holiday season. The number of first-time customers increased by 45%, while a 50% improvement in conversion rate was also recorded and order volumes grew by 95%.
The brand has seen a continued healthy performance since the coronavirus crisis began, and its particularly strong Christmas trading could indicate even bigger sales results on the horizon for its more well-known competitors like Boohoo Plc.
61% of fashion retailers say they are planning to reduce the number of SKUs in their inventories
The pandemic’s impact on the fashion industry, particularly in store, has led to significant amount of left over stock and periods of heavy discounting by retailers as they try to shift it, greatly affecting overall revenue. A December 2020 report from Business of Fashion and McKinsey observes the ways fashion retailers are making fundamental changes to their strategies going into 2021 to resolve the issues that have been brought to light more plainly than ever before.
When asked what strategies they would employ to avoid future overstock, 61% of fashion retailers said they were planning to reduce the number of SKUs in their inventories. A further 60% hope to improve analytics for consumer insights so that they can better predict demand, while 55% said they would implement a more agile supply chain.
Combined with other methods such as moving to a seasonless assortment and reducing the number of collections they produce, these retailers hope to make their business operations more cost effective and environmentally friendly moving forward.
ASOS UK sales up 18% year-on-year to August 31st 2020
ASOS UK sales have risen by 18% year-on-year to £1.18bn, according to the brand’s full year financial statement ending August 31st 2020. International retail markets, which include the European, US and ROW regions, performed even higher at +20% during the same period.
The statement also revealed that the company has seen a 3.1 million rise in its active customer base, which now totals 23.4 million across the world, reflecting increased brand engagement spurred on by the pandemic.
This news comes despite issues with the retailer’s supply chain when Covid-19 first hit, as well as huge volatility in sales across the fashion sector throughout the spring when lockdowns were enforced on much of the Western world. The brand also said it continues to remain cautious about the financial impact the crisis is having on its core 20-something customer base, which could affect sales and basket sizes over the festive period and in the longer term.
Nick Beighton, ASOS CEO, added to the statement: “I am pleased by the improvements we have made this year but there is still more for us to do to continue our progress. Whilst life for our 20-something customers is unlikely to return to normal for quite some time, ASOS will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail.”
International online sales of luxury goods increased by 170% year-on-year in August and September 2020
International online sales of luxury goods increased by 170% year-on-year in August and September 2020, according to analysis from eShopWorld.
As retail begins its slow recovery on a global scale, the cross-border luxury market appears to be faring well following sales performance in July 2020 that was 40% above those seen in the lead up to Christmas 2019 (a period which is usually the strongest in the calendar alongside new year discounts).
Luxury has been one of the most hard-hit sectors of the industry as consumers rein in their spending and focus on essential items throughout the pandemic. The closure of physical stores, as well as shoppers’ reluctance to splash out and other unpredictable online behaviours has caused experts to predict drops of 40-60% in experiential luxury and 25%-45% in personal luxury sales year-on-year.
Despite this gloomy outlook, the late summer growth figures indicate that brands are altering their marketing strategies to prioritise digital, thereby bringing luxury online experiences to those outside of their usual domestic markets. CEO of eShopWorld, Tommy Kelly, explained, “In the current climate, there is incredible opportunity for luxury beyond the traditional channels and markets, particularly as older shoppers have become more comfortable with online, while digital natives are, of course, already there.”
47% of British consumers have had issues with parcel delivery since the onset of coronavirus
An October survey of more than 2000 British consumers, commissioned by Citizens Advice, has found that nearly half (47%) of British consumers have had issues with the delivery of parcels since the first lockdown began in March 2020.
With the UK having been in full or partial lockdown for much of this year, 51% say they feel more reliant on having products delivered to their homes. The increased numbers of people now shopping online, whether for necessity or convenience, seems to have thrown retailers’ logistical issues into the spotlight.
Of all respondents, a whopping 96% claimed to have ordered products that require parcel delivery since March. Three in 10 of these have experienced shipping delays, making it the biggest issue cited by consumers. A further 18% said they had lost out financially due to a home delivery gone wrong or missing, with 40% of those losing out by more than £20.
As a result, nearly one in four have lost confidence when ordering goods from online stores – something that could have a larger impact as people begin their Christmas shopping.
Citizens Advice has said views of its webpage providing advice on parcel issues had more than doubled to 208,000 between March and October this year compared to just 94,000 over the same period last year.
US shopping app downloads slow to a 4% year-on-year growth in Q3 2020 after a Q2 spike
US shopping app downloads slowed to a 4% year-on-year growth in Q3 2020, following a spike in Q2, according to Sensor Tower’s Mobile Retail Trends Analysis, published in Q4.
Across the Apple App Store and Google Play, shopping app downloads in the region surpassed 150 million. The ranking of most downloaded apps remained mostly unchanged throughout Q1-Q3 in 2020, with Amazon, Wish and Walmart remaining in the top three, in that order, as they did last year. However, three new retail apps entered among the remaining seven spots, mirroring their successes in the US market this year – Shop (by Shopify) rocketed to fourth place overall, while fashion retailer SHEIN ranked number seven and Nike crept in at number 10.
Sensor Tower data also revealed that US app download growth for top brick-and-mortar retailers between Q1-Q3 this year was almost double that of top online-only retail apps (+27% vs. +14%). Downloads for stores that also have a brick-and-mortar presence also dropped off less sharply over the Q3 period compared to those of online-only retailers.
This suggests US consumers found a new way to shop with their favourite high street stores this year under unprecedented circumstances. Customers who favour flexible shipping policies and contact-free pickup particularly reaped the benefits of apps from these kinds of retailers.
Pinduoduo’s MAUs increase by 74.6 million quarter-on-quarter in Q3 2020
Chinese ecommerce platform Pinduoduo increased its monthly active users (MAUs) by 74.6 million in Q3 2020 compared to the previous quarter, to a total of 643.4 million. Its number of annual active buyers also rose by 36% to 731.3 million compared to the same period in 2019. At just five years old, this makes Pinduoduo the fastest ecommerce company to have surpassed 700 million active buyers.
Gross merchandise value (GMV) reached a whopping 1.5 trillion yuan (+73%), while its revenue climbed 89% year-on-year to 14.2 billion yuan ($2.1 billion US) as Chinese consumers continued to favour online shopping after its peak of the outbreak in the region. A twenty percentage point decrease in sales and marketing expenses helped to boost this figure further.
This success follows innovative action taken by the company to extend its offering to consumers. In August, Pinduoduo launched its grocery delivery service Duo Duo Maicai to meet growing demand amidst the fallout from the pandemic.
China’s annual luxury online penetration increased from 13% in 2019 to 23% in 2020
A post-Covid boom in China’s luxury market could result in 48% growth by the end of 2020, according to a report from Bain. If the results reflect this, total luxury sales for the year could reach 346 billion RMB, and as growth continues, mainland China is likely to have the largest share in the luxury market sales by 2025.
Much of this growth has been spurred on by younger consumers in the Millennial and Gen Z cohorts, who are much more likely to use the internet to research and purchase luxury goods than their more mature counterparts. Gen Z is the only generation to cite online sources for all three of their top three favourite places to research luxury fashion. China’s annual luxury online penetration increased by a total 10 percentage points between 2019 and 2020 alone to 23%, driven by these changes in shopping habits.
As of October 2020, luxury beauty ecommerce sales had grown by 60% alone since the same month the year before, making a particularly popular luxury vertical amongst Chinese consumers. More impressively, luxury fashion and lifestyle ecommerce sales in China saw an equivalent increase of 100%, although this started at a relatively small base in 2019 due to overseas purchases having been preferred up until this point.
Ecommerce penetration is still quite low for luxury fashion and lifestyle in China– it’s predicted to grow from 5% in 2019 to 7% in 2020 – whereas penetration in luxury beauty far outstrips any other category (expected growth 28% in 2019 to 38% in 2020).
Bain believes online luxury retail has changed permanently since the onset of the coronavirus pandemic, with most brands predicting online penetration of the sector in China to reach anywhere between 20%-25% within the next three years.