Global retail media to touch $101 billion in 2022: GroupM Report | The Financial Express

Global retail media to touch $101 billion in 2022: GroupM Report

Titled, ‘This year, next year’, the report predicts that e-commerce will represent 19% of global retail sales in 2022 supported by $101 billion in retail media

Global retail media to touch $101 billion in 2022: GroupM Report
Retail media advertising revenue represented 18% of global digital advertising revenue in 2021

Global retail media is estimated to see a 15% rise to touch $101 billion in annual revenue this year as opposed to 2021, according to a report released by GroupM. Titled, ‘This year, next year’, the space will surpass $160 billion in annual revenue in five years’ time. As per the report, global e-commerce sales is estimated to touchl $5.4 trillion this year, accounting for 19% of global retail sales in 2022. This will grow to 25% by 2027. Twenty of the top global e-commerce companies accounted for 67% of global e-commerce sales in 2021.

In terms of retail sales, GroupM’s report estimates global e-commerce sales of $5.4 trillion this year, with China and the US together accounting for 52% of the total sales. Meanwhile, 61%, or $3.3 trillion, can be attributed to the US, China, Japan, Germany, the UK, Canada, and Australia. The report estimated that e-commerce sales will reach $9.1 trillion by 2027. Further, the report predicts that e-commerce will represent 19% of global retail sales in 2022, up from 18% in 2021 and 2020, supported by $101 billion in retail media. During the pandemic, the ratio of “goods” and “sales” changed as most consumers were not spending on transport, travel, leisure and entertainment. Instead, people were spending on their home offices, electronics, and DIY home improvements.

Retail media advertising revenue represented 18% of global digital advertising revenue in 2021 and 11% of total global ad revenue, the report stated. The high-water mark for advertising revenue today equates to approximately five percent of gross merchandise value (GMV), which under the right circumstances could be a reasonable target for others who presently fall somewhere between zero percent and three percent presently. Concurrently, global advertising revenue recorded growth of 24% in 2021, all the more remarkable as the 2020 figure represented only a small decline of two percent. The outsize growth of retail sales, the shift

within that to e-commerce sales and the condensed time frame of those changes likely contributed to greater advertising intensity and advertising revenue as a result. Advertising intensity can be measured as the ratio of advertising expense to company revenue. It is a useful lens through which to view the events of the last two years and also the players driving ad revenue growth globally. “Our research indicates higher advertising intensity for goods-and product based companies versus services companies, helping illustrate why 2021 was such a banner year for advertising growth,” the report said.

As per the GroupM report, Chinese company Alibaba emerged as the top e-commerce company with more than double the gross merchandise value ($1,249 billion) of the second placer, American-run Amazon ($602 billion). While the pandemic saw impressive growth figures in the e-commerce sector, the report estimated that that would “decelerate meaningfully in 2022” as offline activities return, supply chain shortages impact the availability of certain goods, and high inflation grips large economies. “We also expect demand for some product categories, including electronics, fitness equipment, household goods and furniture, to soften after stimulus payments (in some countries) and new home-based work and life led to pandemic buying sprees.”

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