PURCHASE, NY – (COMMERCIAL THREAD) – As Covid-19 has kept consumers around the world at home, almost everything from groceries to gardening supplies has been purchased online. According to Mastercard’s latest Recovery Insights report, this represented an additional $ 900 billion spent in online retailing globally in 2020. Simply put: in 2020, e-commerce was roughly $ 1 in every $ 5 spent in commerce. retail, up from about $ 1 in $ 7 spent in 2019.1
For retailers, restaurants and other businesses large and small, the ability to sell online was a much needed lifeline as in-person consumer spending was disrupted.
Around 20-30% of the world’s Covid-related digital switchover is expected to be permanent, according to Mastercard’s Recovery Insights: Commerce E-volution. The report draws on the anonymized and aggregated sales activity of the Mastercard network and on proprietary analysis by the Mastercard Economics Institute. The analysis delves 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 a long way through e-commerce,” says Bricklin Dwyer, chief economist at Mastercard and director of the Mastercard Economics Institute. “This has important implications, countries and companies that have prioritized digital continue to reap the benefits. Our analysis shows that even the smallest businesses see gains when they go digital.
While the digital transformation has neither been universal nor consistent – due to geographic, economic and family differences – the report reveals several key global trends:
- The first digital enthusiasts are getting carried away: Economies that were more digital before the crisis, such as the UK and the US, have seen larger gains in the national digital transition that appears to be more permanent than countries that had a smaller share of e-commerce before the crisis, like Argentina and Mexico. Asia-Pacific, North America and Europe were the regions that favored e-commerce adoption the most.
- The digital gains of grocery and discount stores appear to be persistent: Core retail sectors, which had the smallest digital share before the crisis, have seen some of the biggest gains as consumers adapt. With the formation of new spending habits and given the low pre-Covid user base, we predict that 70-80% of the grocery e-commerce push will hold up for good.
- International e-commerce increased 25-30% during the pandemic: International e-commerce has seen an increase in both sales volume and the number of different countries where buyers have placed orders. With infinitely more choices at their fingertips, consumer spending in international e-commerce grew by around 25-30% year-over-year from March 2020 to February 2021.
- Consumers are increasing their e-commerce footprint, buying up to 30% more online retailers: Reflecting the widening of consumer choice, our analysis shows that consumers around the world are shopping at more websites and online marketplaces than ever before. Residents of countries like Italy and Saudi Arabia shop on average at 33% more online stores, followed closely by Russia and the UK.
- The shift to electronic payments has accelerated in the United States: Even in stores, Covid-19 has accelerated the digital transition, with more consumers switching from cash to contactless payments. Based on our analysis of payment forms in retail stores and traditional restaurants, we have seen non-cash payments increase an additional 2.5 percentage points above the current trend. This has led to an acceleration in the shift from cash payments to full year electronic payments.
Recovery Insights: Commerce E-volution can be viewed here.
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 leverages Mastercard’s analytics and experimentation platforms, its long-standing advisory practice, and unique data-driven insights to deliver relevant tools, innovation and research. and timely.
The report draws on the anonymized and aggregated sales activity of the Mastercard network and on proprietary analysis by the Mastercard Economics Institute.
1The Mastercard Economics Institute drew on activity within the Mastercard network and modeled global retail e-commerce for all payment types to determine additional retail e-commerce spending based on the gap by compared to the trend.
About the Mastercard Institute of Economics
Mastercard Economics Institute was launched in 2020 to analyze macroeconomic trends from a consumer perspective. A team of economists, analysts and data scientists rely on information from Mastercard – including Mastercard SpendingPulse ™ – and third-party data to provide regular reports on economic issues to key customers, partners and decision makers.
About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our business. With connections in more than 210 countries and territories, we are building a sustainable world that opens up invaluable possibilities for all.
© 2021 This presentation and its content are intended only as a research tool for informational purposes and not as investment advice or recommendation for any particular stock or investment and should not be relied upon, in all or part of it, as a basis for decision-making or investment purposes. This content is not guaranteed as to its accuracy and is provided “as is” to users, who review and use this information at their own risk. This content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, does not in any way reflect the expectations (or actual) of the operational or financial performance of Mastercard.