An additional $900 billion was spent on online shopping around the world in 2020 as COVID-19 kept shoppers at home and pushed them to purchase everything from groceries to gardening supplies through e-commerce.
About 20 to 30% of the pandemic-induced digital consumption change should be irreversible, according to Mastercard's Recovery Insights: Commerce E-volution, which analyzed anonymized data from the payment network.
"While consumers were stuck at home, their dollars traveled far and wide thanks to e-commerce,” said Bricklin Dwyer, Mastercard chief economist and director of the Mastercard Institute. "Our analysis shows that even the smallest businesses see gains when they shift to digital."
Economies that were more advanced in terms of digital technology before the pandemic saw greater domestic gains that were likely more permanent, compared with countries with less e-commerce share before the crisis, according to the report. The strongest areas in terms of e-commerce adoption have been in the Asia Pacific, North America and Europe.
Essential retail industries, which had the least digital share of market adjustment before the recession, saw some of the largest benefits as consumers adapted to new realities. About 70% to 80% of food e-commerce growth should remain with the new consumer habits, the report said.
COVID-19 also helped accelerate the transition from cash to electronic payments. Noncash payments in brick-and-mortar retail stores rose by an additional 2.5 percentage points on top of the usual shift to electronic payments, the report said. This sped up the shift from cash to electronic payments by a full year.