DELIVER Europe – FedEx sees strong e-commerce comeback “after 2023”

E-commerce growth is continuing to ‘normalise’ this year following a ‘rollercoaster ride’ over the last three years but will remain the top business driver for the coming years, a top FedEx manager said at this week’s DELIVER Europe event in Amsterdam.

In 2022, e-commerce sales declined year-on-year for the first time following dramatic increases during the pandemic years of 2020 and 2021, Chris Hodge, the company’s Brussels-based e-commerce marketing manager, told a well-attended workshop at the two-day show.

“People wanted to get outside after being stuck inside for two years,” he explained to an audience of retailers and other participants. This resulted in a partial comeback for traditional retail sales as shops re-opened fully following pandemic-related closures.

However, last year also saw generally weaker retail sales in many countries due to the impacts of the war in Ukraine, high inflation, rising costs and recession in large economies. This downward trend has continued this year.

Boom ahead?

More positively, however, Hodge stressed: “We predict that e-commerce will return to growth after 2023.”

Looking at the medium-term prospects, he declared: “Between 2023 and 2025 there could be fivefold growth on the Covid basis.” This would amount to an additional US$1.7 trillion in online retail sales, taking e-commerce revenues to a new peak of above US$5 trillion in 2025.

Moreover, cross-border e-commerce could be the top driver of this growth, increasing twice as fast as domestic sales, he pointed out. By 2030, more than one third of total e-commerce sales could be cross-border, according to forecasts.

Fast-growing markets

Looking at Europe, Hodge said that seven countries – the UK, Germany, France, Italy, Spain, the Netherlands and fast-growing Turkey – are expected to account for 70% of the region’s sales in 2025.

Other fast-growing markets around the world in the next few years will include the US, Mexico, Brazil, Argentina, South Africa, India, Japan and Australia, he pointed out.

Growth factors

Several factors will drive this growth around the world, Hodge explained. These include rising numbers of online shoppers; consumer demand for greater convenience and more choice; the growth of mobile communications; and the emergence of social commerce.

In terms of deliveries, consumers generally want to receive their order within 2-3 days, want a choice of options and shipment transparency, and returns options, he noted.

TNT integration enables e-commerce growth

Presenting some of FedEx’s capabilities to serve international e-retailers, Hodge underlined that in Europe the acquisition and integration of TNT meant that the company could now offer lower-cost, ground-based deliveries across the continent within 2-3 days.

For intercontinental shipments, the company has now rolled out FedEx International Connect Plus (FICP), its day-definite, e-commerce shipping service, to more markets around the world, particularly in Europe and Asia Pacific.

More partnerships

In terms of last-mile deliveries, Hodge said the company is expanding its PUDO network, with parcel shops in most countries but locker solutions in markets such as Denmark and Poland.

At the same time, FedEx is partnering with other companies that have special expertise, such as Europe-based ESW with its portfolio of localised pre-sales and support services.

Customs challenges

Finally, responding to CEP-Research questions about some of the biggest challenges and ‘pain points’ for international e-commerce, Hodge highlighted customs and import duties as particular issues. But he underlined that more and more third-party solutions are becoming available on the market to ease these challenges.