Why the eCommerce Growth Story Isn’t Over Yet

Archive edition · Market data and company circumstances reflect 12 July 2025, when this newsletter was sent.

Why eCommerce Is Still a Portfolio Essential

The global eCommerce industry has matured meaningfully over the past five years. Gone are the pandemic-era days of double-digit annual growth, but this isn’t the end of the story. In fact, as industries stabilize, new patterns often emerge and this sector is no different.

Global eCommerce is expected to grow at a +6% compound annual growth rate (CAGR) between 2025 and 2030, expanding from $4.7 trillion this year to $6.4 trillion by the end of the decade. While slower than its earlier pace, this still represents one of the most durable secular growth stories in global retail.

More importantly, the sources of this growth are shifting — both geographically and by category. And savvy investors should be paying attention to where capital is moving.

Global eCommerce’s New Growth Hotspots

Global eCommerce Sales by Region (2025)

Even in a more mature environment, eCommerce continues to outpace global GDP growth. The sector’s expansion is no longer universal but concentrated in areas with either low existing online penetration or categories that remain early in their digital transition.

High-Growth Markets by Region

India, ASEAN, and Latin America stand out as the fastest-growing eCommerce markets globally, thanks to growing internet access, mobile payment adoption, and rapidly modernizing consumer preferences.

These markets currently see online penetration rates between 9-18% of addressable retail sales, compared to over 30% in China and South Korea, leaving ample headroom for expansion.

Underpenetrated Categories Leading the Way

Food and Beverage eCommerce remains in its infancy in most markets. Despite being a daily essential, less than 10% of global food and beverage sales currently happen online, compared to 23% for total eCommerce.

This category is forecasted to grow at a +10% CAGR over the next five years, as digital grocery services, online specialty food markets, and delivery apps broaden their reach.

What Makes eCommerce an Attractive Bet in 2025

1.2.1 The Growth Is Getting SmarterIn its early days, eCommerce was fueled by everything going online at once. Now, the opportunity lies in select, scalable areas:

1.2.2 Emerging Markets Are Catching UpWith penetration rates still low and consumer demand growing rapidly, markets in India, Southeast Asia, and Latin America offer some of the highest returns on invested capital for digital commerce businesses.

1.2.3 Market Leaders Are ConsolidatingThe industry is increasingly dominated by a handful of large players with scale advantages — vast product catalogs, unbeatable logistics, and data-driven personalization. These platforms are gaining incremental market share each year.

1.2.4 Valuations Have ResetAfter peaking during the pandemic, eCommerce valuations have now corrected to more sustainable levels. Growth-adjusted pricing remains favorable, particularly for market leaders in high-growth regions.

• Essential categories like groceries, pet care, health and beauty are growing faster than discretionary items like apparel and consumer electronics.
• On-demand services such as food delivery, ride-hailing, and travel booking platforms are outpacing traditional goods-based eCommerce in growth.

Where to Invest: Companies to Watch

In the United States, Amazon (AMZN) remains the undisputed eCommerce leader, not just because of its scale, but because its essentials category — food, personal care, and household items — is now growing at twice the pace of its discretionary products. Shopify (SHOP) continues to build on its position as the go-to infrastructure provider for online merchants, expanding beyond small businesses to attract larger, fast-growing brands. In the pet care space, Chewy (CHWY) stands out, riding the wave of rising pet ownership and surging demand for pet essentials online — one of the fastest-growing eCommerce categories in the U.S.

In China, JD.com (JD) holds a key advantage with its integrated first-party and third-party logistics model, particularly strong in electronics and groceries. Pinduoduo (PDD) is expanding rapidly by focusing on value-driven, essentials-heavy categories and pushing aggressively into food delivery and international markets through platforms like Temu. Meanwhile, Alibaba (BABA) continues to maintain leadership across core eCommerce segments while reinvesting heavily into on-demand services and everyday essentials to defend market share.

South Korea’s Coupang (CPNG) has cemented its position as the market’s logistics and delivery specialist, offering one of the fastest same-day and next-day delivery networks globally, with a growing focus on food and daily consumables.

In Latin America, MercadoLibre (MELI) remains the region’s most dominant eCommerce player, with a fast-expanding logistics network and a successful fintech arm that strengthens customer engagement. In Southeast Asia, Sea Ltd. (SE) operates Shopee, the largest eCommerce platform in ASEAN markets, benefitting from young, mobile-first consumers and increasing digital wallet adoption.

Finally, India’s Eternal (ETEA) is quickly scaling in one of the fastest-growing digital commerce markets worldwide, capitalizing on rising internet penetration and expanding online grocery and essentials demand.

These are the platforms consolidating market share, investing in logistics, and focusing on high-frequency, essential categories — precisely where future growth is accelerating.

Risks Investors Should Monitor

As with any investment theme, it’s crucial to stay mindful of the headwinds that could challenge near-term performance and reshape market dynamics. Here are the key risks investors should keep on their radar:

• Macro Uncertainty: Slowing global GDP growth, particularly in the U.S. and Asia, is a concern. Higher tariffs and geopolitical trade tensions can weigh on international sales and margins.
• Consumer Caution in Developed Markets: U.S. consumers are focusing more on essentials (like food, personal care, and pet products) rather than discretionary items, which may slow growth for traditional categories like apparel or electronics.

Archive note

This article preserves the analysis in our weekly newsletter sent 12 July 2025. Market prices, forecasts and company circumstances reflect the time of publication and may have changed.

This material is general information, not personal financial advice or a recommendation to trade. Investing and trading involve risk, including loss of capital.