Pattern's Global Ecommerce Predictions for 2021

Misha Pabari

December 15, 2020

Pattern’s senior leadership team have reflected on the past year’s learning to make their global ecommerce predictions for 2021. The rapid acceleration of ecommerce fuelled by COVID-19 has highlighted new standards of excellence for consumer brands and retailers to meet the needs of today’s digital customer.

Below, we outline the trends that brands and retailers can expect to take shape as they finalise their 2021 plans. 

What’s in store for Europe?

Europe’s retail economy has been hit hard, and an over-reliance on bricks-and-mortar stores has become obvious for many consumer brands.

Pattern’s General Manager for Europe Nicola Hollow explains how COVID-19 finally made digital a top priority for many brands, and the impact this will continue to have in 2021.

She says: “The impact of the pandemic has itself become the “Chief Digital Officer” for several businesses in Europe. Brands have been forced to shift their focus to direct-to-consumer and marketplace channels to ensure that sales from stores were not lost; whilst also taking advantage of the rapid growth in online sales in the short-term.”

Europe’s shoppers in more mature markets have bought products online much more than previously, and in the less mature markets it has encouraged shoppers to buy online for the first time. In general, marketplaces, online retailers and omnichannel retailers who have been able to pivot to focus on quickly scaling their online operations have been the winners. I believe a new omnichannel experience will be established over time as the uncertain future of physical retail plays out, and brands seek alternative routes to market.”

Pattern Global Head of Marketing Joanna Perry adds that with Europe facing continued restrictions on its citizens until the COVID-19 vaccine has been widely rolled-out, the bounce back to shopping in store some had predicted for the first half of 2021 is now unlikely to happen.   

The role of D2C

The COVID-19 crisis has enhanced dynamism in the ecommerce landscape globally, and has expanded the scope of ecommerce; with new businesses, consumer segments and product categories. More shoppers are buying everyday necessities online, and so a direct-to-consumer (D2C) online channel is one we would recommend every brand investigates. 

Director of Consulting for Europe Kerry Lee explains how a D2C website can pay dividends for brands who understand how to maximise their value as a channel to market. She says: “Investment in D2C channels for brands and retailers will continue in 2021. There is a nervousness about the power wielded by marketplaces; many brands see a benefit in strengthening their D2C proposition, which can deliver higher margins and provide insightful customer data. A re-evaluation of channel strategy will see many brands adapt their marketplace assortment and pricing to ensure that they can fully optimise their overall D2C activity to reflect how customers will shop now, but also in the near future.”

“In addition to this, brands and retailers will need to work hard to meet increasingly high growth targets, therefore getting the basics right will continue to be key. Since COVID-19 hit, consumers have been more forgiving of longer delivery times and less responsive customer service but, as the impact of the pandemic wanes, the need to meet high customer expectations will return. Meanwhile, investing in recreating offline shopping experiences online will continue to be a focus not only in the short-term, but also as part of every brand’s long-term digital strategy.”

Global marketplace dominance: Amazon, Tmall and Walmart

Online marketplaces have picked up demand that offline channels could not service in every region that we operate in 2020. In 2021, they will be seeking to continue their growth by adding new customers, as well as selling more to those they already have signed up. Improved product selection and improved customer experience are both crucial to this strategy, and underpin several of the global ecommerce predictions made by the team.

Pattern’s Chief International Officer Chris Vincent shares his global ecommerce predictions on what to expect from Amazon in 2021: “The net effect of the pandemic showed that traditional shopping habits have changed. The longer this goes on, the more permanent the new behaviour will become with all online businesses benefitting from it - marketplaces most of all. Amazon is expanding rapidly onshore into new markets across Europe, South America and South East Asia. The failings of traditional retail businesses plays to Amazon’s strengths and I can only see its offer get stronger in the New Year.”

“It is clear that Amazon is targeting South East Asia as its next big push, thanks to its growing middle class and very large population. Having learned some valuable lessons about localisation in harder-selling markets like the Middle East and India, I believe Amazon will thrive in this region by using Singapore as its hub. Their willingness to fail fast in order to learn and grow makes me think Amazon will be successful in the region in the long-term.”

Alibaba will be Amazon's key competitor in the region, and so we expect it to leverage its existing relationships with brands selling on its China marketplace Tmall, to encourage them to also list on Lazada; Alibaba's marketplace which operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Pattern's General Manager for Asia Arthur Cheung predicts that online sales in China will continue to grow overall in 2021, with continued demand for luxury and premium Western brands. The major players Tmall, JD.com and Pinduoduo all continue to innovate their customer experience at a fast rate, and so marketplaces will maintain their dominant position in China.

Much like China, marketplaces make up a majority share of total online sales in the USA, and customer experience is where there competition is at there too.

Our Director of Marketplaces George Hatch, shares his US ecommerce predictions for 2021: “Brick-and-mortar businesses will continue to struggle in the first half of the year as they contend with how to make consumers comfortable returning to shop in person with mask mandates, limiting the number of shoppers in person and increased sanitation and cleaning protocols. I suspect US ecommerce sales will continue to grow in 2021, though at a much slower growth rate when compared to previous years.”

“US online marketplaces including Amazon, Walmart and Target+ will continue their expansion in 2021 with Amazon setting the pace. I believe Walmart and Target+ both have opportunities to grow their market share and expand on the triple digit growth they enjoyed in 2020, via programmes such as Walmart + and Target’s Drive Up, Shipt and same day Order Pickup offerings – in their bid to compete with Amazon’s plethora of services.”

Global Ecommerce Predictions: A new online sales growth trajectory

For the Australian ecommerce market, 2020 saw a rise in online adoption greater than most anticipated. A report by Australia Post identified that its forecast of 12% of consumer spending online by 2021 was hit by March this year, with the pandemic altering the trajectory of the ecommerce industry.

Pattern’s Head of Customer Marketing for ANZ Kathryn Coleman draws on the results from our Australian Ecommerce Benchmark reports to make her predictions for 2021 ecommerce growth trends: “Having monitored a subset of Australian retail websites, we reported a 76% increase in ecommerce revenue vs. last year, driven by 29% more online traffic and a 37% increase in conversion. Melbourne’s 112-day lockdown also drove historic online adoption with Victorian conversion on average 73% higher than the rest of Australia between July and October 2020. Key trading dates such as Amazon Australia’s Prime Day and Cyber Weekend did not disappoint, with a number of our clients enjoying a record sales performance when compared to previous years.”

“Based on these results, I believe 2021 is likely to set new highs, records and benchmarks that did not seem possible until the pandemic forced customers to turn to online. Looking beyond the impact of the pandemic, I expect this shift to online spending to stick throughout the next year. With that in mind, brands must recalibrate and prepare for the possibility of future lockdowns, putting higher pressure on their ecommerce department, logistics and fulfilment.”

Similarly in the Middle East, this past year has seen huge growth and focus applied to ecommerce, with many retailers who may have previously been reluctant to embrace digital change, now broadening their horizons.

Pattern’s General Manager for MENA David Quaife tells us how the shift from offline to online has meant there is no longer a choice to be made between physical and digital retail.

“COVID-19 has done what most didn’t think possible in this region and moved customers away from shopping in malls and got them comfortable shopping online. This trend shows no signs of slowing down and the region’s two largest ecommerce players, Amazon and Noon will be making sure they capitalise on this. For consumer brands, it is more important than ever to ensure their digital distribution strategy is clear moving into 2021 as pricing becomes more visible and competition stronger on these highly viewed marketplaces.”

“Furthermore, 2021 will continue to see Amazon and Noon expand out from their current countries of operation and scale their businesses into the wider GCC and North Africa. We’ve already seen this happen this year when Amazon launched cross-border orders from its UAE site into Kuwait, Oman and Bahrain, effectively doubling its potential customer base. I expect to see more logistics solutions like this in place soon as Amazon plans to launch in Egypt, following in the footsteps of Noon who has already seen success in the market.”

Private equity to continue investing in digital

Pattern Director Jeremy Wilson who leads our Private Equity Practice outlines his global ecommerce predictions for what to expect from private equity in 2021.

He says: “Online brands who have performed well this year, will be looking to “lock-in” a good valuation on their businesses. We are already seeing this trend emerge with the due diligence work that we’re currently carrying out.”

“Aside from being particularly interested in those brands with strong online propositions, and that have shown resilience during lockdown, private equity investors will go further up the chain and invest in the infrastructure supporting the operations. This has already been the case with major investments going into distribution centres and operations around the UK. I see this expanding into 3PL operating companies, carriers, and support technology."

He adds: "Technology is likely to be the most interesting area to follow. I would expect to see investments going into technologies that make it easier for consumer brands to manage and trade on multiple channels, whether owned or via 3rd party.”

For brands and retailers who may have previously viewed digital commerce as a secondary channel, having an online presence has never been more important. For those looking to prepare themselves for the 'new normal', having the right capabilities to adapt and strengthen your existing offerings and drive channel shifts is essential.

If you would like support on how to reassess your ecommerce strategy - or with optimising specific online channels such as your D2C site or marketplaces - please get in touch here.

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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)