Forrester has released a new forecast indicating that global online retail sales are set to rise dramatically, from $4.4 trillion in 2023 to $6.8 trillion by 2028, growing at a compound annual growth rate (CAGR) of 8.9%. As e-commerce continues its rapid expansion, retailers are increasingly investing in generative AI ( GenAI ) technologies to enhance sales and streamline operations, according to the report titled “Global Retail E-Commerce Forecast, 2024 To 2028.”

Despite the anticipated growth in online sales, the report notes that a significant majority of global retail sales—76%, or $21.9 trillion—will still occur offline in 2028. This underscores the necessity for retailers to maintain robust omnichannel strategies, ensuring seamless integration between online and offline shopping experiences.

Retail e-commerce maturity varies significantly across different regions. Advanced economies like the US, the UK, and South Korea lead due to higher internet penetration and digital literacy. However, emerging markets in Asia Pacific, Eastern Europe, and Latin America are rapidly catching up, driven by increasing smartphone adoption and mobile commerce.

In the Americas, the US is projected to see online retail sales reach $1.6 trillion by 2028, representing 28% of total US retail sales. Canada, while growing, is expected to reach $83 billion in online retail sales by the same year, lagging behind the US due to its lower population density and slower consumer adoption rates. Latin America’s top six countries—Brazil, Mexico, Argentina, Colombia, Peru, and Chile—are forecasted to grow from $109 billion in 2023 to $192 billion by 2028.

In Europe, Western European countries are expected to see a rise from $508 billion in 2023 to $773 billion by 2028, with online retail penetration increasing from 15% to 20%. The UK will remain the largest market, followed by Germany, France, Italy, and Spain. Eastern Europe, with lower e-commerce penetration, is projected to see online sales grow from $72 billion in 2023 to $126 billion by 2028, with Russia and Poland leading the region.

Asia-Pacific will continue to dominate the e-commerce landscape, with online retail sales in the top five countries—China, South Korea, Japan, India, and Australia—expected to grow from $2.2 trillion in 2023 to $3.2 trillion by 2028. China and South Korea will maintain high e-commerce penetration rates, each exceeding 40% by 2028. Southeast Asia’s top six countries—Indonesia, Thailand, Vietnam, Malaysia, the Philippines, and Singapore—will see sales rise from $93 billion in 2023 to $193 billion by 2028, capturing 17.4% of total retail sales.

Jitender Miglani, principal forecast analyst at Forrester, highlighted the impact of emerging sales channels on the growth trajectory. “The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years. However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately, to succeed.”

As the global e-commerce landscape evolves, the strategic investment in GenAI and other advanced technologies will be crucial for retailers aiming to capture a larger share of the growing market and enhance their competitive edge.