As much as 20-30% of the Covid-19-related surge in ecommerce spending is expected to be a permanent feature in the share of overall retail spending.
This is a key finding of a new Mastercard Economics Institute report called Economy 2021. The global outlook report provides a detailed analysis of the economic impact of Covid-19, its outlook includes permanent changes in digital consumer spending habits, growth of online banking, fintech disruption and opportunities to boost financial inclusion.
Among the key trends analysed is the sharp shift to digital platform use, driven by changed consumer behaviour, mobility restrictions and the necessity to generate business revenues beyond brick-and-mortar locations. The Mastercard Economics Institute, which was launched last year to analyse macroeconomic trends through the lens of the consumer, released the report to help governments and businesses of all sizes find a path forward, following a gruelling and transformative 2020.
In terms of the e-commerce spending surge, the Mastercard Economics Institute estimates a permanent stickiness factor of 20-30% in overall retail spending, a key consideration as businesses contemplate scaling up their digital transformation efforts. This shift was also highlighted in a recent Mastercard ecommerce study, which revealed that 68% of South African consumers are shopping more online since the onset of the Covid-19 pandemic. This trend appears to be here to stay as 71% of respondents said they will continue to shop online post-Covid-19.
It should be noted that the survey was conducted among active Internet users.
According to Economy 2021, as e-commerce rapidly becomes a way to pandemic-proof a business, adoption by older generations and added convenience and lower costs for consumers will contribute to the continued growth of digital demand in 2021.
Click below to read on about why digitalisation is the key to financial inclusion.