Forrester: E-commerce sales forecast to grow 8.9% annually through 2028

Global e-commerce sales are expected to grow 8.9% annually through 2028 to $6.8 trillion. A new report from Forrester also predicts U.S. online retail sales are expected to reach $1.6 trillion by 2028, accounting for 28% of the total retail sales.

The report states that retail e-commerce maturity varies globally. Advanced economies including the U.S., U.K. and South Korea are more mature due to higher internet penetration and digital literacy.

E-commerce is more mature in the U.S. compared to Canada, with Forrester predicting Canadian online retail sales will reach $83 billion by 2028. Forrester says Canada lags the U.S. in e-commerce penetration due to lower population density, a smaller market size, and slower consumer adoption.

While Forrester expects consistent growth of online sales, 76% of global retail sales will still occur offline over the next four years, including $4.2 trillion in U.S. sales. As a result, the report advises retailers to continue investing in omnichannel strategies that provide positive experiences for consumers in stores and online.

While consumers have returned to shopping in stores, Forrester said online sales are expected to regain momentum fueled by new and mature channels like marketplaces, social commerce, click and collect, live stream and direct-to-consumer. Widespread mobile commerce and youthful populations globally are fueling marketplace growth for Flipkart in India, Lazada in Thailand and Malaysia, Shopee in Singapore, and Shein and Temu in the U.S.

“The growth of online marketplaces, social commerce and livestream selling will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. “However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately, to succeed.”

Forrester expects Latin American online retail sales in the top six countries – Brazil, Mexico, Argentina, Colombia, Peru and Chile – will grow from $109 billion in 2023 to $192 billion by 2028. Asia-Pacific online retail sales for the top five countries – China, South Korea, Japan, India and Australia – are expected to increase from $2.2 trillion in 2023 to $3.2 trillion in 2028, with China leading the region. China and South Korea are the top two countries globally in terms of e-commerce penetration and will each have online retail penetration of more than 40% by 2028.

In Southeast Asia’s top six countries – Indonesia, Thailand, Vietnam, Malaysia, the Philippines and Singapore – retail e-commerce sales reached $93 billion in 2023 and will rise to $193 billion by 2028 to capture 17.4% of total retail sales. Indonesia leads the region in online retail penetration, followed by Malaysia and Singapore. The Philippines and Vietnam will see a compound annual growth rate of more than 20% over the next five years, outpacing other countries in the region.

In Western European countries, including Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the U.K., online retail sales are expected to grow from $508 billion in 2023 to $773 billion in 2028, with online retail penetration increasing from 15% to 20%. The U.K. will continue to be the biggest market for retail e-commerce, followed by Germany, France, Italy and Spain.

In Eastern Europe, online retail penetration is half that of Western Europe. Forrester forecasts that online retail sales for the top five Eastern European countries, Russia, Poland, the Czech Republic, Romania and Hungary, will increase from $72 billion in 2023 to $126 billion in 2028, with Russia and Poland leading the region.

Forrester reports the 2028 forecast for online and offline retail sales in U.S. dollars across 40 countries will capture 88% of the global gross domestic product.