TWN Info Service on WTO and Trade Issues (Apr22/22)
27 April 2022
Third World Network

United Nations: Rise in e-commerce activity sustained in 2021, says UNCTAD
Published in SUNS #9563 dated 27 April 2022

Geneva, 26 Apr (Kanaga Raja) - The significant up-tick in consumer e-commerce activity fueled by the COVID- 19 pandemic was sustained in 2021, according to the UN Conference on Trade and Development (UNCTAD).

According to a news release posted on its website, UNCTAD said that online sales increased markedly in value, despite the easing of restrictions in many countries, with the average share of internet users who made purchases online increasing from 53% before the pandemic (in 2019) to 60% following the onset of the pandemic (2020/21), across 66 countries where statistics are available.

However, UNCTAD said that the situation prior to the pandemic and the extent of the boost to online shopping experienced varied between countries.

"Many developed countries already had relatively high levels of online shopping (above 50% of internet users) before the pandemic while most developing countries had a lower uptake of consumer e-commerce," it said.

According to UNCTAD, the greatest rises occurred in several developing countries. "In the United Arab Emirates, the share of internet users who shopped online more than doubled, from 27% in 2019 to 63% in 2020," it said.

Meanwhile, UNCTAD said in Bahrain, the share tripled, reaching 45% in 2020, and in Uzbekistan it rose from 4% in 2018 to 11% in 2020.

UNCTAD said in Thailand, which already had a relatively high uptake prior to the pandemic, a 16-percentage- point increase meant that for the first time, more than half of internet users (56%) shopped online in 2020.

UNCTAD said the greatest increases among the developed countries occurred in Greece (up 18 percentage points), Ireland, Hungary and Romania (each 15 percentage points).

However, it said that of the 66 countries covered, online shopping remains the lowest in El Salvador (1% of internet users), Azerbaijan (5%), Uzbekistan (11%) and Colombia (17%).

"One reason for such differences is that countries differ greatly in their extent of digitalization and therefore, in their ability to turn swiftly to digital technologies to mitigate economic disruption," said UNCTAD.

It pointed out that least developed countries (LDCs) are especially in need of support to take up e-commerce but are not represented in its analysis due to a lack of data on internet usage.

According to UNCTAD, official statistics, available for seven countries that together comprise around half of global GDP, indicate that online retail sales increased substantially in these countries from around $2 trillion in 2019, immediately prior to the pandemic, to around $2.5 trillion in 2020 and $2.9 trillion in 2021.

These seven countries highlighted by UNCTAD are China, the United States, the United Kingdom, South Korea, Canada, Australia and Singapore.

China accounts for over half of the online retail sales across these countries and the United States for a further 30%, said UNCTAD.

"The pre-existing upward trend accelerated in many of these countries, especially those where a relatively low share of retail sales take place online," it added.

According to UNCTAD, in Singapore, online retail sales in 2021 were approaching triple the 2018 level, while Canada and Australia also experienced especially large increases over the same period.

"Looking across all these countries, although the disruption and economic uncertainty wrought by the pandemic suppressed overall retail sales into 2020 (only Australia and the United States saw retail sales increase from 2019 to 2020), online retail sales grew strongly as people took to shopping online and as offline sales declined," it said.

"This led to a marked increase in the share of online sales in total retail sales - from 16% in 2019 to 19% in 2020," it said, adding that this level was sustained into 2021 despite offline sales picking up strongly.

"Online sales comprise a much greater share of total retail sales in China (around a quarter in 2021) than in the United States (around one eighth)," said UNCTAD.

As a result of the steep increases following the onset of the pandemic, the United Kingdom joined South Korea in having the highest overall online retail share in 2021, at 28%, it added.

According to the UNCTAD news release, the 13 top consumer-focused e-commerce businesses increased their revenues sharply during the pandemic.

The 13 companies highlighted by UNCTAD are Alibaba, Amazon, JD.com, Pinduoduo, Shopify, Meituan, Uber, eBay, Booking Holdings, Walmart, Expedia, AirBnB, and Rakuten.

UNCTAD said in 2019, these companies made sales worth $2.4 trillion, and following the onset of the COVID-19 pandemic in 2020, this rose sharply to $2.9 trillion, and a further one-third increase followed in 2021, taking total sales to $3.9 trillion (in current prices).

"The shift towards online shopping has further entrenched the already strong market concentration of online retail and marketplace businesses," it added.

UNCTAD said that Alibaba, Amazon, JD.com and Pinduoduo increased their revenues by 70% between 2019 and 2021 and their share of total sales through all these 13 platforms rose from around 75% in 2018 and 2019 to over 80% in 2020 and 2021.

"Expedia, Booking Holdings and AirBnB saw gross bookings decline by up to two thirds in 2020 as movement controls reduced demand for travel and accommodation services, though growth returned in 2021 as restrictions were eased," it added.