KResearch views that market value of B2C e-commerce in 2022-2023 will grow at a slower pace after reaching double-digit growth during COVID-19. In 2023, the market is expected to expand at around 4-6 percent – the lowest when compared to its average growth of 26 percent per year over the past three years. The number of new e-commerce users is likely to be stable following the sharp increase during the pandemic. Plus, consumer purchasing power is limited and pressured by higher costs of living and product prices.
KResearch holds the view that fresh food, dry groceries, beverages and personal care products are among essential goods which consumers tend to increasingly purchase via this channel, in response to their changing lifestyle in the ‘new normal’ era. Meanwhile, online spending on fashion, health and beauty products may not see rapid growth as they are considered less necessary in the present situation where consumers have limited purchasing power and must spend with caution. KResearch assesses that market share of B2C e-commerce in all product categories may increase from 8.5 percent in 2019 (before the pandemic) to 16.0 percent of the overall retail market in 2023.
In such circumstances where consumer purchasing power remains fragile or limited while businesses are facing intensified competition, KResearch views that effective supply chain management – quality product offerings in response to customer needs, multiple sales channels and consistently good customer service – is the key to generating and maintaining sales volume amid purchasing power that has yet to fully recover and numerous alternatives for consumers to choose from.