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According to EIU's latest report, in 2024, the expansion of online retail in affluent markets is expected to slow down due to challenges and regulatory hurdles.
Post-pandemic, online retail growth has surged, but it is expected to slow down in wealthier regions, with online sales growth shifting to single-digit figures in the United States and Western Europe.
However, regions like Asia, the Middle East, Africa, and South America present growth opportunities for online retail. Regulatory challenges, market consolidation, and profitability pressures are significant in affluent markets. High interest rates globally will deter new investments, leading to a more stringent demand for returns from existing investors.
Profitability concerns in price-sensitive developing markets often render online retail initially loss-making. The online grocery delivery sector is expected to face hardships in 2024, with the exit of key players and layoffs due to rising food costs. Regulatory scrutiny, including anti-competitive practices and restrictions on dark stores, adds complexity to the online retail landscape.
On the other hand, offline retail is set to resurgence, driven by affordability, reduced delivery fees, and a focus on essential goods. Retailers are attracting bargain-seeking consumers, prompting them to expand their physical presence, with increased foot traffic expected in 2024.
