Pattern’s 2022 Ecommerce Predictions From Around the World

Akta Bavalia

February 3, 2022

Businesses who sell online have faced two years of uncertainty, so will our 2022 ecommerce predictions offer them clarity on where online retail markets are headed this year?

Many brands are comparing their 2021 online sales results with 2019, rather than 2020, as it was considered such an exceptional year. 2022 will likely see the growth curve return to what most would have predicted at the end of 2019, while retaining much of the increase in share that online sales have taken from offline channels.

In this blog, Pattern’s marketplace experts share their 2022 ecommerce predictions for the year ahead with insights on trading patterns, which online players are winning, and challenges that we are yet to overcome.

ONLINE SALES CONTINUE TO GROW

The year-on-year comparisons for the first quarter may not look promising – particularly in Europe which was in a strict lockdown during the same period in 2021 – but overall, there is still some growth potential for online sales. Our leadership team across China, UAE, USA, Australia and Europe predict that there will be growth in 2022, but not at the rates seen during 2020 and 2021.

Pattern’s German Country Manager Torsten Schaefer believes it will be tough for businesses to achieve year-on-year sales growth in Q1 and Q2 of 2022 due to the lockdown during the first half of 2021, but overall, throughout 2022 he expects to see a growth rate of 10%.

The growth rates are expected to be stronger in both the China and USA, which will suffer less from exceptional comparative figures from 2021, as neither market had substantial lockdowns last year. Both Pattern’s General Manager for Asia Arthur Cheung and US-based Director of Marketplaces George Hatch predict we could see a growth rates of near 20% in their respective markets.

Merline McGregor, Pattern’s General Manager for Australia, shares similar predictions for her market. She explains that it will be important for businesses to “align investment with long-term growth, the opposite to the last two years which has been about reacting to the market.”

The Middle East has also seen less restrictions in comparison to most other regions. MENA General Manager, David Quaife, who is based in the UAE, expects to see growth continue in a similar fashion to 2021. However, any introduction of new lockdown measures could catapult online sales figures, as occurred in 2020.

MARKETPLACES WIN IN 2022

Marketplaces have fueled ecommerce growth rates for years and will continue to do so in some markets in 2022.

Pattern’s Arthur Cheung points out that cross-border marketplaces – such as Tmall Global – have become Chinese consumers’ primary source of foreign goods, as it is hard for them to travel overseas to shop at the moment. Prior to the pandemic, Chinese tourist spend was materially important to premium and luxury retailers in many major cities such as Hong Kong, Sydney, Paris, Milan and London. Now Chinese shoppers are flocking to marketplaces to buy these products, Alibaba says its Tmall Global cross-border shopping platform has 100 million annual users.

Tmall is also not the only marketplace to consider in China, and brands should think about whether they need a presence on others, such as JD.com, Koala, Pindoudou and Suning, to maximise their sales opportunities. Arthur tells us, “In China it is increasingly important that brands have multiple touchpoints with end customers, and have products available on more than one marketplace, as we will not see any one platform capture all the revenue growth.”

Similarly in the Middle East, David Quaife predicts that there will be more than one marketplace winner. He says: “Amazon will be the dominant player in the Middle East but Noon and other retailers with their omnichannel propositions have doubled down on investment throughout 2020 and 2021.” In his markets, customer experience drives customer retention, and that will be key to who can take market share in markets that will continue to quickly grow.

In other markets Amazon has less competition and will defend the dominant position it has risen to.

Amazon.com already accounted for 41% of USA ecommerce sales in 2021 and whilst we continue to see this grow, George Hatch believes it will be at a slower pace in 2022. He also predicts that Walmart - currently the number two marketplace in the USA - will gain share as it scales and matures, and invests in new digital infrastructure.

In Australia, Merline McGregor fully expects Amazon to continue its phenomenal growth, gaining ground from other traditional brand aggregators in 2022. She says: “The brands that Pattern sells on marketplaces in Australia have grown in excess of 200% year-on-year in January 2022. Our research shows us that with the sharp uptick in Prime subscriptions in the Australian market combined with Amazon’s reliability, and fulfilment centres located close to most of Australia’s population, the marketplace has set itself up for success in 2022 and beyond.”

COMMON CONSTRAINTS

Another theme in the Pattern team’s 2022 ecommerce predictions was the constraint on ecommerce logistics and supply chains. The past two years have posed challenges in most regions, but improvements are finally feeding through. In Europe, Torsten Schaefer says that ecommerce players, and particularly Amazon, have increased their warehouse capacity through 2021, but a lack of capacity will remain a challenge in 2022.

In the UAE, David Quaife states: “There has been a huge focus and investment in this area over the last two years, so I would not foresee any major issues with last mile delivery. However, the supply chain, largely due to manufacturing issues, will continue to have a negative impact into 2022; hopefully this will reduce in the second half of the year.”

Merline McGregor and George Hatch predict there are still lots of challenges to overcome in both the USA and Australia. George believes capacity and inflation will drive US logistics costs to new highs, Just In Time inventory will need to change to allow for more of a buffer, and manufacturers will need to build in longer shipping times to ensure product is available when in demand.

Merline adds: “The scarcity of natural products such as wood to produce pallets, and Urea (a fuel additive used in diesel trucks) could see our supply chain environment continue to be disrupted until 2023 and beyond.”

SOCIAL COMMERCES GOES GLOBAL

Social commerce is one trend that will unite Eastern and Western markets in 2022. TikTok, also known as Douyin in China, has grown in popularity across the globe. As the platform evolves its capabilities to become ecommerce friendly outside of China, both Merline McGregor and Arthur Cheung predict it will be an important channel globally.

Last year, Pattern released a report outlining how social channels are becoming significantly important in creating demand generation amongst consumers, as well as brand awareness.

“Social channels are a great way of capturing new audiences and encourage impulse spending. It has been around for years in China but in 2022, we expect to see even more livestream shopping events, brands commercialising their content and other markets outside of Asia following suit," concludes Arthur Cheung.

For regular free ecommerce insights and research, see our Ecommerce Research page at https://pattern.com/uk/resources/ecommerce-research/.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 26, 2022

Top 5 Ways to Prepare for Peak with Google Ads

Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.

1. Go Early

In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.

From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.

2. Get Ready for Privacy Changes

 According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.

From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.

It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.

3. Ensure Consumers Can Discover your Brand

A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.

Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.

The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)

4. Get Moving with Performance Max

Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.

Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.

5. Flight Budgets Accordingly

Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.

Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.

Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)