Is 2021 the Year of even more E-commerce Growth?

No one can deny that e-commerce is now embedded as a part of all our lives. It is something absolutely useful and easy and can be done from anywhere as long as you have a device with an internet connection. Has e-commerce peaked in 2020? Or is it poised to see more growth in 2021? 

E-commerce is more than that just an online mall. Hidden behind each product are a very complex world of marketing, data, transactions with both suppliers and customers, and cybersecurity. 

The sector grew leaps and bounds in 2020 because people needed to stay home. With nowhere to go, they resorted to using e-commerce platforms to purchase everything from food, clothes, shoes, books, gift items, and more. Consider it as a modern genie - your wish is its command. 

Overview of e-commerce


Electronic commerce, or more popularly known as e-commerce, is a type of business model that enables a company or individual to conduct business over an electronic network, typically the internet.

Notice how we defined e-commerce as being over an electronic network and not just on the internet. There is a perception that e-commerce is something relatively new, but the truth is it already has an extensive history.

E-commerce dates back to the beginning of the 20th century with the emergence of catalog sales in the United States. Before that, people could buy products only in physical stores. Businesses handed out photographs and illustrations of their products to consumers. Whenever they found a product that they liked, they could order it from the retailer. This method allowed people living in rural areas to buy different products.  Sears and Victoria’s Secret are a couple of varied and successful examples of catalog businesses. 

Despite this precedent, the first modern e-commerce approach was in 1960. The development of the Electronic Data Interchange system allowed electronic transactions to happen. It also made the exchange of commercial information between companies possible.

The first electronic sale happened in 1981 by a travel agency named Thompson Holidays, which connected its travel agents to a catalog so that they could offer services to customers. 

The reason why e-commerce has become so successful over the past several years is that there is no need for physical relationships between parties. The purchase of products, services, and payments are carried out through an electronic distribution channel.

Characteristics of e-commerce


E-commerce, as mentioned earlier, is more than just an online store. It has several features and characteristics.

  • Global reach. E-commerce has broken national borders and limits. Users can buy products that are otherwise unavailable in their country.
  • Multi-format. It can use text, audio, and video.
  • Available anywhere. Any place any time with a computer or mobile device and an internet connection.
  • Customization. Technology allows delivering personalized messages based on the profile of the user.
  • Social technology. Users can interact through social media platforms.

E-commerce trends


  1. Online competition is at a record high

Because of the lockdown brought about by the coronavirus pandemic, many brick-and-mortar shops have faltered. Those who still survive are struggling to keep themselves afloat.

Fortunately, sales through e-commerce are at an all-time high. The lockdowns fast-tracked growth that was supposed to be years in the making to just a matter of weeks. Contrary to what many people think, the boom in e-commerce sales is not just fueled by millennials and Gen Z. According to Shopify, even older people have moved their purchases online. 

According to Shopify, record competition in this sector has driven customer acquisition costs up. This was caused by the spending of retail giants and legacy wholesalers.

With the recent success of e-commerce, many companies and individuals were convinced that setting up their site is the best way to earn. However, new entrants are finding it hard to compete when it comes to providing a smooth customer experience. More established brands with immersive omnichannel presence have the advantage in this respect.

Still, going digital is inevitable for everyone who wants to grow their business. If you plan to just sit the pandemic out and wait for everything to be back to normal, you will be left behind.

  1. Customers shift to e-commerce to buy products normally bought in stores 

Consumer products that people usually only buy in physical stores are now in demand online. Household essentials, personal care, and even groceries are now being delivered to homes. 

  1. Advertising costs will continue to spike

As retail giants and legacy wholesalers ramp up their e-commerce initiatives, digital advertising costs will likewise continue to increase. Studies have also shown that consumers are now buying from sites outside their home countries.

Because the field is now crowded - with companies shifting from television and radio to digital advertising - digital advertising costs have become more expensive. During the pandemic, customer acquisition costs on Facebook spiked.

  1. Customer experience has become crucial

Consumers will expect e-commerce sites to be easy to use and intuitive across all devices. Businesses that can provide what the customers want will see the highest returns. 

Direct-to-consumer brands that already have a thriving e-commerce site have the advantage because they were able to pivot easily to digital channels. All they need to do is enhance the customer experience. For everyone else, the challenge is in trying to keep up.

  1. Analysis, data, and Big Data

In e-commerce, data about users is important because firms can advertise to users based on their activity. They can offer products that are in line with their exact needs. In this way, the communication between business and consumer is more efficient since they can provide customers what they want when they need it.  Companies utilizing robust customer data are winning in this arena. 


Before 2020, e-commerce was already becoming the future of shopping. The lockdown due to the pandemic only fast-tracked the inevitable.

It has been many years since the beginning of e-commerce when selling on the internet and uploading your personal information to the network seemed preposterous. Since then, advances in technology and security have allowed businesses using e-commerce to increase their figures every year.

Electronics, fashion, travel, and downloads will continue to play a prominent role in e-commerce, even though other segments such as food has also become increasingly important. The future of commerce and business is online and it depends on increasing the budget for e-commerce and online marketing. 

Consumers enjoy the convenience of online shopping, and this demand has been coupled this year with their reluctance to go out. Experts agree that this will be a lasting change.

Right now, retailers who have not used digital shopping will surely be left behind. It is not to say that physical stores will disappear - many people still want to experience going to the malls – but a combination of both online and offline shopping will be the optimal way to run business going forward.