In many ways digital commerce saved the day during the pandemic. It allowed many businesses — and their workers — to carry on, and even thrive. The commerce evolution became a revolution last year. A whole new generation across the globe, including many older people, overcame any hesitancy to buy online, driving global digital commerce up 24% last year to about $5 trillion. In the US alone, around 20% of total retail sales now happen online.
For a look down the road at what’s to come, turn your gaze to Asia, and particularly China, which has continued to serve as an incubator for retail innovations, thanks to a more digital and mobile customer base. China is the world leader in digital commerce ($2.8 trillion projected this year, more than 50% of retail sales), and is also an innovator in integrating with physical commerce. Superapp ecosystems such as WeChat have served as a further accelerant to connect online and offline commerce, and companies like Mercado Libre in South America are trying to replicate this approach. In the US, Amazon has set the tone with two-day delivery, including the option of two hours in some cities. But in China, the new standard is 30 minutes, set by Hema, a physical store chain owned by Alibaba.
Many of the digital innovations from China don’t travel easily beyond its borders. An exception is TikTok, where we expect to see more focus on digital commerce in the years ahead. Another exception rapidly gaining traction outside China is “live selling.” In China alone, live selling is expected to account for $300 billion in sales, with projections of growing to 25% of total digital commerce in 2025. One of the companies leading the charge for live selling outside the US is not Amazon, Facebook, or YouTube, but rather a company from Stockholm, Sweden. In this issue, we speak with Bambuser CEO Maryam Gharehmani about the rapid growth of live selling around the world and how she sees its role in shaping the future of commerce.
While live selling integrates digital advertising with commerce, last mile delivery represents the integration between supply chain logistics and commerce. Most of the supply chain innovations in retail in the past have focused on efficiently getting goods from a manufacturer to the retailer points of sale. Now, the name of the game is speedy and efficient delivery options directly to the consumer. This has been the strength behind Instacart in the US, but also Colombian startup unicorn Rappi. At Signal 2017, co-founder Sebastian Mejia shared his vision for Rappi to marry a mobile interface with an army of couriers.
Paying for these purchases used to be a significant barrier for digital commerce growth. Integration with financial systems used to require a lot of technical work and consumer trust. PayPal led the innovation in the fintech space to make it easy for merchants and consumers to make commercial transactions with ease, and led ultimately to today’s boom in fintech innovation. Larger retailers such as Walmart, Mercado Libre, and even Macy’s are leveraging commerce innovations such as buy-now-pay-later and cryptocurrency to develop lasting relationships with their customers.
It’s easy to get caught up in the possibilities, so it’s wise to take a step back and ask whether all of these innovations truly serve consumers. In a Signal exclusive interview, Sucharita Kodali, a seasoned digital commerce analyst at Forrester Research, emphasized that people’s behavior will ultimately decide what the future holds. She anticipates an acceleration of retail innovation that will challenge many long-held beliefs, but it’s a long game that we’ll still be talking about on stage at Signal 2030.
There is no going back. The future of commerce will be a fascinating innovation lab for years to come, bringing together many disciplines and players who will find new ways to make it easier for people around the world to buy anything from anywhere at any time.
Stan Joosten & John Battelle,
Editors-In-Chief, Signal360 / Co-founders, Signal P&G