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Four charts showing why online retail isn’t taking over any time soon

By Adam Pasick
Published Last updated This article is more than 2 years old.

Given the saturation coverage of companies like Amazon and Alibaba, you would be forgiven for thinking that the dinosaurs of brick-and-mortar retail are not long for this world. After all, shopping malls are crumbling and big-box chains are going out of business. How can a mom-and-pop store compete with the algorithmic sophistication of the world’s leading online retailers?

But a new report by eMarketer shows just how far the online upstarts have to go before they can even dream of overtaking offline retail. The research firm projects that ecommerce retail will only account for 5.9% of the total retail market in 2014, for a total of nearly $22.5 trillion. That number is expected to expand to 8.8% by 2018—still ”just a fraction of in-store purchases.”

To be sure, ecommerce retailers are growing much faster than their offline competitors. But online retailers’ scorching annual growth rates are expected to cool significantly over the next five years. Meanwhile, offline retail, with a much larger base, is expected to growth at a roughly steady pace over that period.

Online retail is dominated by the world’s two biggest economies—though China’s vast and increasingly prosperous population has given it a big lead over the United States.

But online sales as a proportion of total sales shows a very different pecking order, which explains why the UK is the world’s third-largest online retail market, despite being only the eighth-largest in total retail sales:



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