Last year global retail e-commerce sales reached approximately 4.9 trillion USD, and Statista predicts this figure will grow by 50% over the following four years, reaching around 7.4 trillion USD by 2025.
In light of these figures, it’s safe to say that the e-commerce market’s projected growth will create plenty of exciting opportunities for new entrants to the market – but with so much competition, where should investors and entrepreneurs start?
To further understand the state of the rapidly expanding global e-commerce market and the opportunities that are available, Merchant Machine has researched the most and least saturated sectors to identify valuable gaps in the market for entrepreneurs and investors.
New for 2022, this study uses updated data based on our 2019 analysis of the top 10 rising countries for e-commerce.
We also researched the rising e-commerce industries to investigate the sectors with the highest market share in each country. We then compared the number of leading start-ups, the number of lead and total investments, and the total amount funded for each industry to discover where the opportunities lie for both businesses and e-commerce investors in 2022.
Sections
The top 20 countries with the fastest growing e-commerce markets in 2022
To reveal the world’s fastest rising e-commerce countries, we analysed 25 regions by a range of growth metrics to discover where customers are most likely to spend their money in 2022. The five metrics analysed were :
- The total online population of each country
- Yearly change in e-commerce spending as % of GDP from 2021 to 2022
- E-commerce as a % of total retail in 2022
- The predicted % change in e-commerce market size from 2022 to 2023
- The predicted change in e-commerce spending per capita ($US) from 2022 to 2023
Each country was then given a final ‘Rising E-commerce Index’ score out of 10.
| Rank | Country | Online population | Yearly change in E-Commerce spending as % of GDP | E-commerce % of total retail in 2022 | Predicted % change in E-Commerce market size 2022 to 2023 | Predicted change in E-Commerce spending per capita ($US) 2022 to 2023 | Total rising E-commerce score (out of 10) |
|---|---|---|---|---|---|---|---|
| 1 | United Arab Emirates | 1,448,471,400 | 1.10% | 7% | 23.11% | 22.32% | 7.23 |
| 2 | South Korea | 215,353,593 | 1.20% | 25% | 20.38% | 20.29% | 6.36 |
| 3 | Argentina | 46,010,234 | - | 10% | 27.27% | 26.15% | 6.2 |
| 4 | Brazil | 1,406,631,776 | 0.40% | 5% | 18.94% | 18.94% | 5.98 |
| 5 | Thailand | 65,584,518 | 2.10% | 11% | 18.00% | 17.67% | 5.51 |
| 6 | Vietnam | 38,388,419 | 0.60% | 6% | 23.66% | 22.87% | 5.17 |
| 7 | Indonesia | 51,512,762 | 0.30% | 10% | 22.26% | 20.91% | 4.96 |
| 8 | China | 5,554,960 | 0.50% | 33% | 12.06% | 11.87% | 4.67 |
| 9 | Norway | 279,134,505 | 0.40% | 18% | 14.89% | 14.17% | 4.55 |
| 10 | Spain | 125,584,838 | 0.40% | 13% | 15.63% | 15.23% | 4.23 |
| 11 | Italy | 8,922,892 | 0.40% | 8% | 17.68% | 17.82% | 4.2 |
| 12 | Mexico | 60,262,770 | 0.30% | 6% | 18.86% | 17.68% | 4.18 |
| 13 | Finland | 131,562,772 | 0.50% | 18% | 12.57% | 12.12% | 4.05 |
| 14 | Singapore | 33,181,072 | 0.20% | 6% | 17.14% | 16.54% | 3.84 |
| 15 | Canada | 5,511,370 | 0.50% | 8% | 15.88% | 14.65% | 3.83 |
| 16 | Israel | 112,508,994 | 0.20% | 9% | 15.60% | 13.94% | 3.75 |
| 17 | Malaysia | 51,329,899 | 0.30% | 1% | 18.82% | 14.68% | 3.62 |
| 18 | India | 83,883,596 | -0.80% | 6% | 19.28% | 18.18% | 3.61 |
| 19 | Philippines | 5,943,546 | 0.10% | 3% | 18.18% | 15.25% | 3.55 |
| 20 | United States | 68,497,907 | 0.50% | 14% | 11.10% | 10.58% | 3.49 |
United Arab Emirates is the country with the fastest growing e-commerce market in 2022
The United Arab Emirates tops our list as the country with the fastest growing e-commerce market in 2022.
With UAE’s 1,448,471,400-strong online population expected to increase their e-commerce spend by an additional 22.32%, it’s clear why this country ranks number one in our analysis.
Since last year alone, the country’s e-commerce spending as a percentage of GDP increased by 1.10%, and in 2022 e-commerce made up 7% of the total retail spend.
South Korea has the second fastest growing e-commerce market
With a quarter (25%) of its total retail spend in 2022 being e-commerce, South Korea comes in second place on our list of countries with the fastest growing e-commerce markets in 2022.
South Korea’s 215,353,593 online population increased the proportion of GDP spent in the e-commerce market by 1.2% from 2021 to 2022, which is the second largest yearly percentage increase after Thailand.
The e-commerce market in South Korea is predicted to expand by 2.38% in the next year, which means each person is expected to spend an additional 20.29% USD in 2023 compared to 2022.
Argentina ranks as the third fastest growing e-commerce market in 2022
In third place we have Argentina – the country with the highest predicted percentage change in e-commerce market size from 2022 to 2023, with an estimated increase of 27.27%.
Argentina also has the highest predicted change in e-commerce spending per capita from 2022 to 2023, with a 26.15% increase expected from its online population of 46,010,234.
Opportunity M-commerce: The top 10 countries using mobile devices to make e-commerce payments
Our mobile phones play a huge role in our day-to-day lives. For most of us, they’re so much more than just a device to call and text on; we use them for just about everything – and shopping is no exception.
Over the years, mobile devices have become an increasingly popular medium for online shopping, which is where m-commerce comes in.
Whilst e-commerce describes online shopping via a computer, m-commerce involves shopping online via a mobile device specifically, which can be a lot more convenient for customers and offers an improved shopping experience overall.
| Rank | Country | E-commerce completed on a mobile device |
|---|---|---|
| 1 | Philippines | 70% |
| 2 | China | 69% |
| 3 | South Korea | 66% |
| 4 | Indonesia | 63% |
| 5 | Thailand | 62% |
| 6 | Vietnam | 61% |
| 7 | India | 58% |
| 8 | Singapore | 57% |
| 9 | Malaysia | 56% |
| 10 | United Kingdom | 55% |
The Philippines ranks number one on our list of the top 10 countries using mobile devices to shop, with 70% of all e-commerce being completed on a mobile device.
This is followed closely by China in second with 69%, and South Korea ranking third with 66%. Interestingly, South Korea also ranked second in our analysis of the top 20 countries with the fastest growing e-commerce markets in 2022, which makes it a desirable market for investors and entrepreneurs to explore.
Except for the UK, every country in the top 10 is in Asia, which demonstrates the importance of this continent for the growth of m-commerce and e-commerce as a whole.
The best opportunities for e-commerce investors and businesses in 2022
Using data from Crunchbase, we analysed the top startups in the fastest growing e-commerce industries to establish where the opportunities lie for businesses and investors in 2022.
To do this, we looked at the total number of startups across various sectors, the number of investment firms and organisations that invested in the startups, and the total amount of capital raised through all funding rounds.
| Startups | Total number of leading startups | Total number of lead investment firms and individual investors | Total number of investment firms and individual investors | Total number of funding rounds | Total funding amount raised across all funding rounds | Investment Gap (the number of startups vs lead investors) | Lead Investor to startup Ratio |
|---|---|---|---|---|---|---|---|
| Grocery | 252 | 312 | 1,240 | 648 | $15.8B | -60 | 1.24 |
| Furniture | 238 | 263 | 814 | 555 | $3.6B | -25 | 1.11 |
| E-Learning | 1,607 | 1,573 | 5,054 | 3,214 | $23.9B | 34 | 0.98 |
| Food Delivery | 722 | 695 | 2,448 | 1,663 | $16.2B | 27 | 0.96 |
| Automobile | 2,146 | 1,948 | 6,620 | 4,675 | $57.3B | 198 | 0.91 |
| Baby | 150 | 136 | 530 | 349 | $1.8B | 14 | 0.91 |
| Personal Health | 935 | 845 | 3,227 | 2,163 | $10.1B | 90 | 0.9 |
| Electronics | 1,798 | 1,469 | 4,796 | 3,811 | $24.3B | 329 | 0.82 |
| Beauty | 809 | 613 | 2,317 | 1,470 | $5.8B | 196 | 0.76 |
| Pet | 410 | 309 | 1,091 | 845 | $3.2B | 101 | 0.75 |
| Video Games | 889 | 653 | 2,669 | 1664 | $8.3B | 236 | 0.73 |
| Children | 418 | 305 | 1,190 | 809 | $3.8B | 113 | 0.73 |
| Media & Entertainment | 2,227 | 1,547 | 6,166 | 4,078 | $18.2B | 680 | 0.69 |
| Travel | 2079 | 1,434 | 5,208 | 4206 | $26.2B | 645 | 0.69 |
| Fashion | 2,230 | 1,488 | 5,965 | 4,225 | $24.7B | 742 | 0.67 |
| Digital Media | 1,287 | 858 | 3,647 | 2,616 | $10.5B | 429 | 0.67 |
| Toys | 134 | 78 | 366 | 275 | $521.1M | 56 | 0.58 |
Our research found that startups in the automobile industry attract the highest amount of funding, receiving $57.3B in 2021. After this, the industries receiving the second and third highest amount of funding are travel and fashion, receiving $26.2B and $24.7B respectively.
These figures show the high level of confidence that investors have in the automobile, travel, and fashion industries, which is crucial for the success of any new market entrants.
Grocery start-ups are the most in-demand for investors, with an average ratio of 1.24 lead investors to every startup in this sector. This industry also has the highest amount of money invested per investor on average out of all the sectors, at $12,741,936.
With demand so high, startups in this market will find no shortage of investor capital to use for the growth of their businesses.
Conversely, the fashion startup industry is in need of investors, with this sector having the biggest gap between the number of startups (2,230) and the number of lead investors (1,488). This disparity highlights a possible gap in the market for investors to explore.
The automotive industry, on the other hand, is incredibly popular amongst investors, the research reveals that the total number of investors (6,620) surpasses the number of startups (2,146). Investors will find this to be a highly competitive market, so they may want to consider a less saturated market instead.
Sources
Crunchbase: https://www.crunchbase.com/
World Bank: https://www.worldbank.org/
World Population Review: https://worldpopulationreview.com/
PPRO: https://www.ppro.com/
Statista: https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
Methodology
To reveal the world’s fastest-rising e-commerce countries, Merchant Machine analysed 25 emerging countries on a range of growth and purchasing metrics to see where customers are most likely to spend their money in 2022.
The five metrics included:
- The total online population
- Yearly change in e-Commerce spending as % of GDP from 2021 to 2022
- E-commerce as a % of total retail in 2022
- The predicted % change in E-Commerce market size from 2022 to 2023
- The predicted change in E-Commerce spending per capita ($US) from 2022 to 2023
The metrics were all scored and averaged to give each country a final ‘Rising E-commerce Index score out of 10.
To discover where the opportunities lie for both businesses and e-commerce investors, the number of leading start-ups, the number of lead and total investments, and the total amount funded for each of the fastest-growing e-commerce industries were compared to reveal the investment gaps.
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