The e-commerce sales across the Europe 5 economies—France, Germany, Italy, Spain and the UK—are forecast to grow at a compound annual growth rate (CAGR) of 7.8 per cent over the next five years, increasing from €389 billion (~$403.78 billion) in 2024 to €565 billion (~$588.71 billion) in 2029, according to Forrester, a leading global market research company based in the United States.
The online sales will account for nearly 21 per cent of all retail sales across these five markets by 2029, up from 16 per cent in 2024. Factors including a stronger economy, increasing adoption of omnichannel strategies, better price transparency, and cross-border marketplace expansion will drive this growth, Forrester said in its report titled ‘Europe-5 Online Retail Forecast, 2024 To 2029.’
The UK is projected to lead among the five markets, with the country’s e-commerce sector making up 32 per cent of total retail sales in 2029, up from 27 per cent in 2024. Germany will see an increase from 16 per cent of retail sales in 2024 to 21 per cent in 2029, while France is expected to grow from 14 per cent to 17 per cent over the same period.
Online retail will account for 21 per cent of total sales, led by the UK at 32 per cent.
Fashion, consumer electronics, and cross-border platforms will fuel growth.
Offline retail growth will slow to 1.7 per cent CAGR.
The United Kingdom (UK) dominated the online retail sales with projected sales of £176 billion (~$219.5 billion) by 2029. That compares to £130 billion (~$162.14 billion) in 2024. In Germany, online retail sales are predicted to reach €146 billion (~$152.06 billion) by 2029, up from €97 billion (~$100.73 billion) in 2024. In France, online sales are forecast at €106 billion (~$110.81 billion) in 2029, up from €73 billion in 2024.
The growth of offline retail (eg, in stores) is expected to slow significantly, compared to the immediate post-pandemic years when consumers showed a stronger preference for in-store shopping. By 2029, offline retail sales are forecast to grow at a CAGR of just 1.7 per cent, compared to 8.9 per cent in 2022 and 4.1 per cent in 2023.
Germany leads the total retail sales in the Europe-5 region with retail sales forecast to reach €693 billion by 2029. In the UK, retail sales will reach £552 billion in 2029, and in France retail sales will touch €616 billion.
Non-essential retail sales are set to rebound as inflation declines and economic conditions improve, boosting online growth in fashion and consumer electronics. Emerging online shoppers and cross-border e-commerce will drive further digitalisation, with platforms like AliExpress, SHEIN, and Temu expanding their presence, positioning Europe-5 as a key marketplace hub.
“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,” said Jitender Miglani, principal forecast analyst at Forrester. “European retailers should consider investing in advanced digital platforms to adopt omnichannel strategies to meet growing demand online. Getting customer experience right in both online and offline realms will dictate market dominance in the next decade.”
Fibre2Fashion News Desk (SG)