E-Commerce Industry Report 2022: Pandemic Winners Facing Competitive Pressure

The e-commerce sector has experienced unprecedented growth in recent years, primarily driven by the COVID-19 pandemic. The 2022 industry report from CARL vividly highlights how the winners of the crisis are now increasingly facing intensified competitive pressure. In this blog article, we explore the key trends discussed in the report and provide insights into the development of the German and international e-commerce markets. You can download the full report as a PDF here:

E-Commerce as a Pandemic Winner

The e-commerce sector saw significant growth during the pandemic. Store closures and changing consumer behavior led more people to shop online. In Germany, this growth has been remarkable: in 2020 alone, the German e-commerce market recorded 62.4 million users and generated over €77 billion in revenue.

Key Trends in E-Commerce

The report highlights several key trends currently shaping the market:

1. Amazon FBA (Fulfillment by Amazon): More and more merchants are using Amazon as a platform to sell their products. Amazon handles logistics and customer service, making it much easier for smaller sellers to enter the market.

2. The Thrasio Model: Another exciting phenomenon is the so-called Thrasio model. Companies like Thrasio acquire smaller Amazon sellers, optimize their brands, and increase sales through targeted marketing strategies.

3. Social Commerce: Selling products through social networks is gaining traction. Platforms like Facebook, Instagram, and TikTok are increasingly being used to directly market and sell products.

4. Sustainability in E-Commerce: Customers are placing more importance on sustainable products and transparent supply chains. Retailers need to adapt to this trend and align their offerings accordingly.

5. B2B E-Commerce: The market for digital business-to-business (B2B) trade is growing rapidly. Customers in this segment now expect the same personalized shopping experience as in the B2C sector.

Impact on the M&A Market

The strong growth in the e-commerce sector is also impacting the mergers and acquisitions (M&A) market. The Thrasio model, in particular, shows how attractive brand acquisitions in the e-commerce space have become. This trend is especially relevant for smaller sellers who are successful but often lack the resources to further expand their businesses. By selling to larger players, they can benefit from synergy effects and continue to grow.

Challenges and Outlook

Despite the positive development, there are challenges ahead. Competitive pressure in the e-commerce market continues to grow, with new marketplaces and platforms entering the scene and driving up customer acquisition costs. To remain competitive, retailers need to focus on innovative approaches such as utilizing artificial intelligence (AI) and augmented reality (AR).

CARL predicts that the German e-commerce market will continue to grow in the coming years. However, the focus will increasingly shift to B2B commerce and sustainable business models.