E-commerce trends: more people choosing innovative payment solutions

According to forecasts by the German statistics platform Statista, e-commerce will reach a share 20% of global retail sales by the end of this year. Back in 2017, for every 100 euros of purchases in the world, 10 euros was online. This figure almost doubled by the end of 2023. Despite the current powerful expansion of the e-commerce segment, its growth will remain in single digits in the foreseeable future. This is a result of post-pandemic events that make people prefer shopping brick-and-mortar. Nevertheless, one can expect e-commerce to account for about a quarter of global retail sales by 2027.

In Europe, this growth has been more modest in recent years. If in 2017, around 10% of retail sales were online, in 2023, it was 16%, and Europe could cross the magic threshold of 20% by 2028.

Baltics’ e-commerce trends following Europe

In the Baltics, the e-commerce growth curve and trends generally correlate with global developments. According to Euromonitor, some 6% of all retail sales in the Baltic States took place online in 2017. By 2023, boosted by the COVID-19 restrictions, e-commerce more than doubled, rising to 13%. The share of e-commerce in the individual Baltic countries is different, with Estonia leading at 17% of all retail sales in 2023, while Lithuania had 13%, and Latvia, only 9%.

In 2023, the Baltic e-commerce turnover was dominated by electronics and fashion goods, with 34% and 30% of the total sales respectively. The largest increase (more than four times’) was in the sale of foods.

E-commerce platforms: key market players

Speaking of e-commerce trends, it’s hard not to mention such global e-commerce players as Aliexpress, Ebay, Amazon, Temu, which in developed markets, account for 50% of all e-commerce transactions. The companies most influential in the Baltics (including both global and Baltic businesses) account for some 20–30% of the total market. This means that the Baltic market is fragmented, with larger companies finding it easier to expand their influence in the region, and smaller e-commerce businesses being more capable of reaching their clients.

Notably, more and more people around the world also prefer secure digital payment services like Apple Pay and Google Pay. SEB statistics on transactions in 2023 indicate that of all payment solutions, online card payments grew the fastest (+36%). In the Baltics, a significant number of transactions takes place through payment initiation services/online banks, with this type of transactions growing 4% in 2023. These data show that when shopping online, people value convenience and security.

Social media: powerful innovator for e-commerce

According to statistics, just 12 years ago, internet users worldwide spent an average of 1.5 hours a day on social media. By the end of the last year, this number rose to about 2.5 hours. Social media is an effective way for retailers to sell their products and services, and big platforms use it successfully, for example, by offering instant shopping features on the platform itself without taking the user to the retailer’s website. While back in 2020, half a trillion dollars’ worth of goods and services were sold globally through social media, last year marked the first time the important one-trillion notch was crossed. By 2026, total sales are already expected to rise to three trillion dollars.

Gen Z: the future of e-commerce

Experts predict that by the end of 2024, one in five of all retail transactions will be online. Gen Z, or the digital generation, not only exerts significant influence on social developments, but also on marketing processes in the digital environment. It is this social group that shops online the most, and once they enter the job market and their incomes rise, their spending on e-commerce will also increase. Data show that Gen Z currently accounts for 35% of our society, while by 2030, this share will rise to around 50%, so as generations change, the amount of online shopping will grow naturally.

Ineta Bukele
Head of Cash Management and Trade Financing Department, SEB