E-commerce Growth Could Hit 565 Billion By 2029

American stock exchange Nasdaq predicts that e-commerce sales across Europes five major economies France, Germany, Italy, Spain and the UK will experience a compound annual growth rate CAGR of 7.8 over the next five years.

In monetary terms, this signifies an increase from 389 billion in 2024 to 565bn in 2029.

Online sales are expected to represent nearly 21 of all retail sales in these five markets by 2029, up from 16 in 2024.

This growth will be driven by factors such as a robust economy, greater adoption of omnichannel strategies, improved price transparency, and the expansion of cross-border marketplaces.

European retailers should consider investing in advanced digital platforms to adopt omnichannel strategies to meet growing demand online, said Jitender Miglani, principal forecast analyst at Forrester.

Getting customer experience right in both online and offline realms will dictate market dominance in the next decade.

According to the advisory firms Europe-5 Online Retail Forecast for 2024 to 2029 , which analyses total retail sales across both e-commerce and offline channels, the growth of offline retail eg, in physical stores is anticipated to decelerate significantly compared to the immediate post-pandemic period when consumers exhibited a stronger inclination towards in-store shopping.

Forrester forecasts that by 2029, offline retail sales will grow at a CAGR of only 1.7, a stark contrast to the growth rates of 8.9 in 2022 and 4.1 in 2023.

Highlights from the report indicate that Germany will lead total retail sales in the Europe-5 region, with forecasts suggesting retail sales will reach 693bn by 2029.

In the UK, retail sales are expected to hit 552bn 649bn by 2029, while Frances retail sales are projected at 616bn.

The UK is set to dominate online retail with expected sales of 176bn 207bn by 2029, compared to 130bn 152bn in 2024.

In Germany, online retail sales are predicted to reach 146bn by 2029, an increase from 97bn in 2024. France's online sales are anticipated at 106bn in 2029, up from 73bn billion in 2024.

By 2029, e-commerce is projected to constitute a significant portion of retail sales across the Europe-5 region.

The UK is expected to lead among these markets, with e-commerce comprising 32 of total retail sales by 2029, up from 27 in 2024.

Germany is forecast to rise from 16 of retail sales in 2024 to 21 in 2029, while France is anticipated to grow from 14 to 17 during the same timeframe.

Non-essential retail sales are likely to recover as inflation decreases and economic conditions improve.

Categories such as fashion and consumer electronics are expected to witness renewed online growth as price-sensitive consumers regain their purchasing power.

The emergence of new online shoppers and cross-border e-commerce platforms will further accelerate digitisation.

With platforms like AliExpress, SHEIN, and Temu expanding their presence, the Europe-5 region is becoming a global hub for marketplace-driven growth.

The growth of online sales is reshaping the retail landscape, giving businesses opportunities to expand their customer base by offering more convenience and delivering tailored shopping experiences, Miglani said.