The WTF Economy: eCommerce Sales to Hit $1T This Year
Is This What Recession Looks Like? FTI Consulting Report claims eCommerce will grow ~9.8% this year, but a few other elements were in the report also:
What is the current state of eCommerce growth?
eCommerce captured 46% of total US retail sales growth in 2023, and 57% in Q1 of 2024.
Not bad for only being 22% of total retail sales, right? Hardly a time to bet against eCommerce.
Who are the biggest winners in the current market?
Temu, Shein, and TikTok Shop (TST) are mentioned as outsized winners. In fact, this jibes with another recent report I've read: Jungle Scout Q2 2024 report which stated that Amazon's share of "first search" declined for the first time in my memory: from 61% in 2022 to 52% today.
Time for Amazon to pull the panic button?
What does this mean for businesses and consumers?
There are plenty of businesses that are growing just fine, thank you. At the same time, despite sales growth, consumers are trading down and the outsized victories are going to those who help consumers do so.
The report mentions value-based apparel and store-based home retailers are under attack from the TST triple threat.
Hello Macy's? If you can get a better value from your real estate, it may not be a terrible time to add to your balance sheet. If your sales erode, you might wish you had that buffer.
How reliable are economic forecasts?
In a recent note, Howard Marks from Oaktree Capital gave a brilliant quote from John Kenneth Galbraith, that I hadn't heard before: "There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know."
WTF Economy indeed. Although in this case, WTF does not only stand for "what the fuck." Instead, in terms of 2025 it stands for something far more complicated:
"What's The Forecast"?
Cue shrug emoji.
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