B2C E-COMMERCE

Business-to-consumer e-commerce

In a large range of countries, B2C e-commerce sales have increased sharply over the last decade, driven by a growing online population and changes in consumer behaviour.

Authored by Heleen Buldeo Rai, last update on October 23rd, 2023 by Camille Horvath

E-commerce is defined by the Organisation for Economic Co-operation and Development (OECD) as “the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. (…) Payment and the ultimate delivery of the goods or services do not have to be conducted online. An e-commerce transaction can be between enterprises, households, individuals, governments and other public or private organisations” (OECD, 2011).

A report published by the United Nations Conference on Trade and Development (UNCTAD) finds that measuring the value of e-commerce remains a challenge. “Although more governments are now collecting information on e-commerce, most countries still do not publish official statistics in this area. Those that publish data on the value of e-commerce sometimes do not follow international guidelines and statistics are often revised.”

Moreover, it is important to consider the distinction between B2C and B2B e-commerce value data. UNCTAD (2021) estimates that the global value of e-commerce sales, including both B2B and B2C transactions, reached almost $26.7 trillion in 2019. This corresponded to about 30% of GDP and represented an increase of 4% from 2018 ($25.6 trillion). The value of global B2B e-commerce was $21.8 trillion, capturing 82% of all e-commerce (UNCTAD, 2021). This difference in value between B2B and B2C e-commerce mainly translates the absolute size of sector, rather than the particular relevance of e-commerce within these sectors (OECD, 2019). Within B2B e-commerce, specifically the manufacturing sector and wholesale trade capture the lion’s share of transactions: these two sectors account for 67% and 85% of turnover in Europe and the United States respectively (OECD, 2019).

The remaining global B2C e-commerce value was $4.9 trillion in 2019, up 11% over 2018 (UNCTAD, 2021). About half of that represents an exchange of goods (as opposed to services). According to CBRE, the global retail market consisted for 91% of offline transactions and 9% of online transactions in 2016. The online retail sector accounted for 20% of the global retail market in 2021. This marks a significant increase from previous years, with e-commerce sales rising by 133% over the past five years alone. The impact of the COVID-19 pandemic has been particularly notable, as there was a 46% increase in global e-commerce sales during the first two years of the outbreak (CBRE, 2022). The current growth in e-commerce sales has been led by B2C transactions for several years now, growing annually by double-digit rates (Ecommerce Foundation, 2019). Despite the challenges posed by the COVID-19 pandemic and some countries reporting lower e-commerce sales, European e-commerce has remained resilient. In fact, in 2021, Europe experienced a notable 16% growth in B2C e-commerce sales (E-commerce Europe, 2022).

A Fevad (2023) report on e-commerce in France reveals that the country's online spending reached (products and services included) 146,9 billion euros in 2022. This marks a 13.8% increase compared to the previous year, but a slight decline from the 15.1% growth seen in 2021. Despite this dip, the e-commerce sector is still experiencing double-digit growth. The number 1 e-commerce company in France, Amazon, reached a total turnover of about 9 billion euros in 2021. It represents a strong increase compared to 2020, which was already an exceptional year for Amazon with 7.3 billion euros in turnover. Amazon's business thrives primarily on its third-party sellers. They account for almost 60% of the site's sales in 2022, compared with 3% at the end of the marketplace's first year of operation in 2003 (Delvallée, 2022). If we consider both categories (products and services) separately, the Fevad (2023) report highlights a 7% decrease in sales of products on the internet since 2021. This decline is attributed to the ongoing impact of the COVID-19 pandemic. However, the drop in product sales has been offset by a significant increase in e-commerce services, with a 36% rise in the past year alone and a 50% increase since 2019. E-commerce sales now account for 12.5% of total product sales, marking a decrease of 1.6% from the previous year (Fevad, 2023).

The 2023 Fevad report also states that approximately 15% of online shoppers are now embracing proximity and short supply chains, making purchases from local retailers and independent producers, driven by motivations such as supporting local businesses (60%), convenience (57%), and a commitment to local consumption (53%). Key online purchases include fashion (56%), travel accommodations (43%), footwear (41%), and transportation tickets (39%). E-commerce serves as a logistics and information facilitator, while also becoming a platform for consumers to enact their commitments, as evidenced by the rise in purchases of reconditioned or second-hand products (52%), particularly among the 15-25 age group. Moreover, over 80% of French consumers now prioritize quality over quantity when shopping online in 2023, with 70% favoring environmentally-conscious websites or those offering made-in-France products.

The table below shows the top ten e-commerce sales countries in the world by 2019, highlighting their B2B and B2C e-commerce sales in billion dollar and the share of B2B e-commerce sales in total e-commerce (UNCTAD, 2021). Although e-commerce data are not always easy to differentiate, this Observatory concentrates on B2C e-commerce of goods (thus excluding services).