eCommerce landscape shift
In terms of geography, mature markets such as the USA, UK, Japan, Germany and France will continue to see healthy growth, with Compound Annual Growth Rate (CAGR) expected to increase to 6% in the UK and 14% in the USA. However, the biggest spikes in growth will be seen in emerging markets such as China, India, Russia, Brazil and Mexico: CAGR is predicted to increase to 17% in China and 30% in India. Despite what we see in GDP in these countries, eCommerce is thriving.
Cards have had a continual strong-hold as the major payment method in the global eCommerce market, but alternative payment usage has continued to rise, and the next five years will see this trend continuing – and even overtaking – card usage. Alternative payments are set to claim 55% of eCommerce turnover by 2019. However, this doesn’t mean that cards will become redundant. They are the payment instrument behind some of the more prominent alternative payment methods such as eWallets where customers simply prefer to aggregate choices into a wallet. Alternative payment usage is on the rise in every market. North America, long known for its card preference, is set to have the largest shift towards alternative payment method usage. In 2014, 28% of eCommerce turnover was made up of alternative payment transactions; in 2019 this will be 35%.
Drilling down into specific payment types, eWallets will become the most popular payment method in the future: 27% of global transactions will take place using eWallets, with cards pushed to second place at 24%.
As well as offering consumers’ preferred method of payment, consideration needs to be given to the ease of use and accessibility of using these payment methods on different devices – whether that’s a smartphone, tablet or wearable device. There will be 11.6 billion mobile-connected devices by 20201. And 23% of the $2.4 trillion eCommerce market is expected to come from mobile devices.