Simone Lavicka, head of strategy, marketing and sales enablement at Digital Commerce at Worldline, writes in the PYMNTS eBook “Baseline 2022: What the Next Six Months Holds” that the trend toward ever-accelerating digital commerce is here to stay — but that we should expect to see market adjustments as pandemic-induced growth steadies and economies worldwide slow down.
This year has been immensely unique in many ways. The world, still recovering from the pandemic, is facing another major challenge in the form of war in Ukraine, adding to supply chain shortages and disturbances to financial markets. However, we are witnessing impressive growth in the eCommerce sector during 2022, building on the exceptional past years, as consumers purchased more products online, ordered more deliveries and played an increasing number of video games — all from the comfort of home.
This surge in demand for digital commerce-related services, including online payments, has coincided with and accelerated already established trends, increased competition, and promoted consolidation in this space. Further investment and innovation will create interesting opportunities for both incumbents and new players.
Crypto services are also trending as they gain more acceptance, evidenced through an increasing number of countries trying out their own central bank digital currencies (CBDCs). We are seeing both the fragmentation and growth of crypto exchanges.
Omnichannel solutions also remain important for merchants trying to reach more consumers. As the pandemic showed us, businesses need to remain flexible. And despite the reopening of brick-and-mortar stores, there has been no notable reduction in online shopping — rather, this may increase even more as businesses better execute their digital strategies and consumers’ adoption of this trend is there to last as people enjoy the convenience of online shopping.
In the U.S., EU and some markets in APAC, such as South Korea, regulations have been proposed to open more app stores considering the Big Tech companies’ dominating hold over how developers build, distribute and offer transactions in their apps. We already saw the “Telecommunication Business Act” in August 2021 come into effect in South Korea. Choosing a third-party payments system is prohibited if you are selling digital goods and services in apps. These new regulations (the EU Digital Market Acts are expected to come into effect this year) will provide more freedom of choice for developers and consumers and bring some interesting transformations in the digital space.
Increased investment in technology and solutions are also important to help companies drive further growth. Companies tend to focus on fundamentals and evaluate investment decisions carefully, particularly during challenging and unpredictable times. In this sense, businesses should and will increase their investments in technology — a move that will help them improve the fundamentals of their eCommerce performance such as fraud prevention measures. We might also see more innovative solutions that are responding to the needs of this ever-changing environment — for example, solutions that help consumers better manage their spending, payments, and harnessing open banking technology.
The acceleration of digital commerce across industries hit new highs last year and this trend will stay, although in the short term, we expect to see market adjustments for pandemic induced growth. These effects, combined with the overall lower economic growth predictions of major economies, will complicate the outlook of the digital economy. But if we look at it in the longer term, the growth of eCommerce will inevitably continue.
