A.T. Kearney’s 2015 Global Retail E-Commerce Index contains a few surprises

Mexico jumped to 17th place in the consultancy’s ranking this year, indicating that the North American Free Trade Agreement is trending upward.

A.T. Kearney released the 2015 Global Retail E-Commerce Index, a study designed to help retailers devise successful global online retail strategies and identify market investment opportunities while understanding the tradeoffs and barriers to success.

After placing second behind China in 2013, the United States takes over the top spot, due to continued growth, an improving economy, and higher consumer confidence. U.S. e-commerce growth in 2014 rose by 15 percent.
The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported recently that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in December 2014 was up 5.4 percent annually at $95.8 billion. Canada and Mexico in December 2014 was up 5.4 percent annually at $95.8 billion.

The 2015 Global Retail E-Commerce Index highlights the big and the small markets: the countries that are always going to be e-commerce behemoths because of their size, and the smaller yet still-promising markets where potential matters more than size.

The Asia Pacific e-commerce market continues to grow—soon it will be the world’s largest region in terms of online sales—but many Asia countries declined in this year’s Index. China the previous leader, has seen its e-commerce market continue to expand, but it declines one spot to due to slightly weaker e-commerce growth and questions about its longer-term macroeconomic conditions, particularly regarding infrastructure investment and consumer spending.

In Latin America, while Mexico jumps into the rankings at 17th place, Brazil and Argentina fall steeply in the Index, due to their slowing macroeconomics. Fundamental infrastructure challenges—logistics and transportation in Brazil, government regulations in Argentina—may hinder e-commerce growth in the future.

In Europe, the United Kingdom (3rd), Germany (5th), and France (6th) all move up one spot in the Index, while Belgium (a 15-spot rise to 9th place), Denmark (up 12 spots to 15th) and Spain (entering the rankings in 18th) have posted impressive progress.

“The boom in ecommerce has brought challenges—both brick-and-mortar leaders and major pure-play online retailers are learning that the future of the industry is not merely online, but rather in creative omnichannel offerings that link online and physical shopping, ” says Mike Moriarty, A.T. Kearney partner and co-author of the study.

The report identifies four overarching themes that color this year’s Index findings as they relate to business strategy, customers, and channels including: Internationalization; the rise of e-commerce IPOs; the continuously connected consumer; and the need for omnichannel strategies. The report also includes detailed market spotlights on China (2nd), Belgium (9th), Mexico (17th), Spain (18th) and Brazil (21st).

“The Global Retail E-Commerce Index reflects trends that global retailers and brand-builders cannot overlook, says Hana Ben-Shabat, A.T. Kearney partner and study co-author.

“Global retailers and global brands are global for a reason—their brands, systems, scale, or intimacy in regions allow them and compel them to push their boundaries further, but it is never easy, she adds. “Determining where to put the chess pieces is the only way to tap into today’s sales and earnings growth possibilities.”

The Global Retail E-commerce Index is a ranking of the top 30 countries based on nine variables, including select macroeconomic factors as well as those that examine consumer adoption of technology, shopping behaviors, infrastructure, and retail-specific activities. The Index balances current online retail market indicators with those that predict the potential for future growth.