E-commerce Advertising Market Hits $83 Billion

Shop and AI. e-commerce concept.
SHARE
THIS



Advertising spend on e-commerce platforms is set to rise sharply this year despite the global recession, reaching a total of $US58.5bn ($83bn).

Advertising investment across e-commerce sites such as Amazon, Tmall and Rakuten, omnichannel retailers such as Walmart and Carrefour, and social commerce on platforms such as Pinduoduo and TikTok is set to increase 18.3 per cent worldwide, growing 30 times faster than the wider online ad market and in stark contrast to a forecast fall of -8.1 per cent for the total advertising industry this year.

The uptick in e-commerce advertising spend mirrors a rapid increase in online purchasing; consumers will spend an additional $183bn online this year as a direct result of COVID-19 with total e-commerce sales set to rise by 30.4 per cent – $677bn – to $2.9trn worldwide. Brands are flocking to leverage targeted advertising across e-commerce platforms as a means of getting closer to the consumer at the point of purchase.

Alibaba controls the world’s third-largest ad business, Amazon is growing well ahead of Google and Facebook

Alibaba is set to make $23.5bn from selling ad inventory across its e-commerce properties this year, giving it control of the third-largest ad business by revenue, behind only Alphabet and Facebook. Alibaba’s advertising income – across e-commerce sites like Taobao, Tmall and Lazada – is set to rise 6.6 per cent this year, though this a far slower rate of growth than its competitors.

Amazon, the fourth-largest ad seller by revenue, is among the fastest-risers this year – company filings show its ad business grew 4.5 times faster than Facebook and 63 times faster than Alphabet in the first half of 2020. Consequently, Amazon is on course to make $18.1bn from advertising this year, up by 35.6 per cent at a time when the wider internet ad market is flat (+0.6 per cent).

Elsewhere, Chinese social commerce platform Pinduoduo is set to see its ad income leap 33.8 per cent to over $5bn, ahead of local rival JD.com on $3.6bn. None of the e-commerce platforms monitored by WARC is expected to witness a fall in advertising revenue this year.

Consumers will spend an additional $183bn online this year due to COVID-19 

Online sales are set to rise 30.4 per cent to $2.9trn worldwide this year, according to data from Edge by Ascential. This represents a forecast upgrade of 8.2 percentage points – $183bn – since the COVID-19 outbreak began. Domestic growth rates range from +19.0 per cent in the UK, to +22.1 per cent in the US and +37.6 per cent in China.

Taken together, e-commerce sales will account for 88 per cent of global retail growth in 2020. The top five platforms will tighten their grip on the market this year, turning over an additional $529bn combined as a result of the outbreak. E-commerce platforms Alibaba (+$221bn), Pinduoduo (+$122bn) and Amazon (+$92bn) have seen the sharpest forecast upgrades since the outbreak.

Advertising spend – particularly within the FMCG sector – is moving online as a result of the shifting complexion of sales since the COVID-19 outbreak. Over 8 per cent of Unilever’s business is now done online – the company made 71 per cent (€2.2bn) of its total 2019 e-commerce sales in just the first six months of 2020.

Livestreams are growing to account for a fifth of Chinese e-commerce while the West has been slow to capitalise on social selling

Livestreamed commerce is booming in China – it is set to more than double to a sales value of $171bn this year. This represents 10.2 per cent of all e-commerce sales today, a share which is set to rise to a fifth (20.3 per cent, $421bn) in just the next two years.

Data from Yimian, a sister company of WARC, show that the top three platforms – Taobao, TikTok and Kwai – will see over two-thirds (69.1 per cent) of all livestreamed sales this year.

COVID-19 has pushed new consumers to the format; three in ten (30 per cent) have spent more than they used to on products sold via livestreams and intend to keep doing so. In total, livestreamed commerce has an estimated audience of 525m, equivalent to 62.8 per cent of China’s online population.

Summing up, WARC Data head of data content and author of the research James McDonald said: “With ad investment flat or falling across most media in the wake of COVID-19, e-commerce platforms – which have seen penetration balloon – are in a strong position to capture reallocated budgets by using sales data to demonstrate ad performance during a volatile economic climate.”

 

Please login with linkedin to comment

ecommerce Warc

Latest News

The Misfits Partners With Business Leadership & Culture Experts To Expand Agency Offering
  • Advertising
  • Marketing
  • Media

The Misfits Partners With Business Leadership & Culture Experts To Expand Agency Offering

Independent experience agency The Misfits has recently announced a strategic partnership with cultural change and leadership experts Nancy Hromin and Kate Chaffer. While the company has for a long time operated in the space of creative services, digital and content marketing, film production and events, The Misfits is now broadening this offering to include business […]

by B&T Magazine

B&T Magazine
TripleLift Expands Into APAC, Naming The Trade Desk’s Henry Shelley As Managing Director
  • Technology

TripleLift Expands Into APAC, Naming The Trade Desk’s Henry Shelley As Managing Director

TripleLift has today announced an expansion in their Asia Pacific (APAC) operations, with Henry Shelley [featured image] appointed as Managing Director, based in Singapore. Fueling TripleLift‘s expansion in APAC is its success in Australia, where the company works with 70 per cent of the top 50 comScore publishers. “As the home to several of the worlds’ […]

Rob Highett-Smith Joins Fiftyfive5 In Newly Created Role
  • Media

Rob Highett-Smith Joins Fiftyfive5 In Newly Created Role

Rob Highett-Smith joins Fiftyfive5 in the newly created role of head of performance measurement. Performance measurement represents one of the three core offer areas at Fiftyfive5 with tracking programs running across 40 countries; representing our fastest growing capability pillar.  Rob joins to lead this capability, which encompasses brand and comms tracking, multi market monitoring, CX and customer satisfaction, as well as other longitudinal programmatic work.   

Customer Messaging Platform Podium Launches In Australia
  • Technology

Customer Messaging Platform Podium Launches In Australia

Podium has continued its international expansion today announcing its launch in Australia. Podium serves more than 90,000 local businesses in the United States, Canada and Australia, and has seen its customer base in Australia almost quadruple to over 3,000 local businesses since the start of the pandemic. Through its SMS-based platform, Podium helps local businesses receive […]

THE EDGE Welcomes New General Manager Emily Copeland
  • Media

THE EDGE Welcomes New General Manager Emily Copeland

Commercial DAB+ hip hop and RnB station, THE EDGE has appointed Emily Copeland, to the newly created role of General Manager. Copeland brings an awesome mix of skills and experience to THE EDGE, including cross-platform media content experience, partnerships and events (including music festivals – remember those?). Copeland also has a stack of achievements to […]

Sustainability 101 With Brianne West, CEO Of Plastic-Free, Eco-Focused Beauty Brand Ethique
  • Marketing

Sustainability 101 With Brianne West, CEO Of Plastic-Free, Eco-Focused Beauty Brand Ethique

Brianne West is the founder and CEO of Ethique, a New Zealand-based sustainable, plastic free and cruelty free skin and hair care range. West sat down with B&T to explore what genuine environmental sustainability looks like, and how brands can better respond to eco-conscious consumers. B&T: Why are we seeing a rise in eco-conscious consumption?    BW: […]

by B&T Magazine

B&T Magazine
Cities connected with lines on a blue globe.
  • Technology

Blis Unveils New Interactive Dashboard That Tracks Consumer Movement In Australia

Blis has today revealed its new Consumer Confidence Pulse — the most comprehensive tracker of its kind — this interactive dashboard builds on its existing trend data around consumer mood to analyse behaviour during the COVID pandemic. The dashboard also now tracks consumer movement over a rolling 13-month period, across 18 retail and lifestyle sectors […]

Australian Seniors Releases ‘Dare To Date’, Second Series Of ‘Life’s Booming’ Podcast
  • Media

Australian Seniors Releases ‘Dare To Date’, Second Series Of ‘Life’s Booming’ Podcast

Following the success of Series One: Grey Nomads, Australian Seniors has launched the second series of the Life’s Booming podcast – Dare to Date.  Hosted by James Valentine (pictured with guests Liz and Barry), Life’s Booming explores the incredible stories and addresses topics important to Australians over 50. Series two titled Dare to Date is a six-part series that covers real-life love, […]

VERSA Announces Two Senior Appointments As Demand For Conversational AI Gains Further Traction
  • Marketing

VERSA Announces Two Senior Appointments As Demand For Conversational AI Gains Further Traction

World-leading conversational agency VERSA has bolstered its team with two senior appointments in response to growing uptake in conversational AI technology across various sectors. Vanessa Tout has been appointed global head of client partnerships and growth, while Michael Oso-Hughes comes on board as design director. Tout joins VERSA CEO Kath Blackham and managing director Michael […]

Patrick Rutkowski Joins Banter
  • Marketing

Patrick Rutkowski Joins Banter

Engagement marketing agency, Banter, has hired Patrick Rutkowski as Creative Technologist, to further bolster the digital and innovation side of the business. Rutkowski joins Banter after having spent the last five and a half years at independent creative agency, The Hallway where he was most recently creative technologist working with the likes of Rheem, Tourism […]

person using mobile application on smartphone, abstract close up of hands
  • Technology

Mobile Advertising Company Kargo Announces New Hires Following H1 Growth In APAC

Kargo has today announced several major growth milestones across the APAC region for the first half of 2021, more than doubling H1 revenue year-over-year with 115 per cent growth. Kargo also ran 41 per cent more campaigns in the region than in H1 2020 and the average campaign size increased by 32 per cent over […]