Will the ecommerce industry continue to ride the wave left by COVID-19? And how about the impact of Brexit on ecommerce, now the UK is officially no longer part of Europe?
With large ecom giants snapping up high-street brands and the exponential growth of online shopping in China alone, the future – or 2021 at least – is looking positive for ecommerce.
As Amazon closes down its Amazon Pantry offering in favour of something more flexible and curated for grocery ecom shopping, we look at how one online food delivery company is preparing for its first IPO.
- China has the largest online ecommerce population, with 710m people shopping digitally. Consumers in China will spend $1.1tn online this year, up from $826.6bn in 2019.
- Deliveroo secures $180m in investment as it prepares for IPO. London company valued at more than $7bn after COVID-19 accelerates food delivery.
- Amazon Pantry is being discontinued as Amazon consolidates its grocery delivery services.
- Ecommerce giant Boohoo Group has bought Debenhams’ brand and website for £55m. The deal excludes its 124 stores and stock.
- Retailers are facing “perfect storm” complications, including delivery suspensions and unexpected Brexit duties, amid ongoing COVID-19 freight delays.
China has the largest online ecom population, with 710m people shopping digitally
With a population of 1.4 billion and 710 million people shopping digitally, China is accountable for 83.6% of the retail ecommerce market in 2020 and is set to become the world’s largest ecom market, spending $1.1tn online this year, up from $826.6bn in 2019, driven by Amazon competitor, the Alibaba Group, JD.com and Pinduoduo.
In 2020, 50% of Chinese online shoppers increased the frequency and amount of their ecommerce shopping and despite the pandemic, the Chinese luxury market saw an increase of 48% to roughly $52bn, making China a dominating ecom force set to become the largest luxury apparel market worldwide by 2025.
Deliveroo has secured another £132m of funding from shareholders including Amazon
Now valued at over $7bn, the London-based company is set to use the new investment on “new tech tools to support restaurants and extend choice for customers” said Will Shu, Deliveroo’s founder and chief executive, as they prepare for an IPO later this year.
In April 2020 the Competition and Markets Authority provisionally cleared Amazon’s purchase of a 16% stake in Deliveroo after the first lockdown threatened a collapse due to restaurant closures.
However, in 2021 Deliveroo is set for a bounce-back as consumers shift their spending during national lockdowns. Deliveroo competitor Just Eat said UK ecommerce orders had jumped 400% in the final three months of 2020 as lockdown restrictions kept people at home.
Amazon Pantry is being discontinued as Amazon consolidates its grocery delivery services
Originally known as Prime Pantry and launched in 2014, Amazon has announced it will be discontinuing Amazon Pantry, instead of retailing household goods and pantry items alongside other Amazon products on the main ecommerce website.
The original idea for Amazon Pantry was to make it easier to stock up on everyday products that would otherwise be bulky or expensive to ship via ecommerce. Amazon Pantry charged customers a flat $5.99 shipping fee per box of groceries, which could be filled with up to 20 kilos of products.
Despite the removal of Amazon Pantry, the ecommerce giant’s grocery delivery ambitions are stronger than ever, with Amazon now owning Whole Foods and new Amazon Fresh branded stores being rolled out.
Boohoo Group has bought Debenhams’ brand and ecommerce website for £55m
The deal, which only cements retail’s shift from bricks to clicks, was financed through the ecommerce giant Boohoo Group’s existing cash balance, and includes the department stores’ own brands but excludes its 124 stores and stock, which will be sold through clearance sales.
The Debenhams website will relaunch on the Boohoo Group’s ecommerce platform in early spring 2021 and Debenhams stores will continue to operate to clear stock, once retail is allowed to reopen.
Boohoo Group said it intends to relaunch the Debenhams ecom website to create the UK’s largest marketplace across fashion, beauty, sport, and homeware.
Retailers are facing delivery suspensions and unexpected duties, amid Brexit and ongoing COVID-19 freight delays
Slightly overshadowed by national lockdowns, Brexit officially started on January 1st, meaning all exports from the UK to the EU are now subject to customer border checks, increased documentation, and import VAT meaning increased costs for ecommerce retailers.
The global pandemic has only added to the perfect storm with delays of stock delivery thanks to disrupted shipping schedules and a displacement of containers around the world.
A growing number of ecom retailers, including John Lewis, have now suspended customer deliveries into the EU as couriers such as DPD suspend services and brands work to establish new complex processes to counterbalance huge delays and backlogs in the shipping and imports.