According to data from Global-e, global cross-border e-commerce sales in the fashion and beauty sectors have seen an 11% increase this year. This surge in online sales can be attributed to the impact of the global COVID-19 pandemic, as physical stores have been forced to close due to lockdown measures, leading consumers to turn to online shopping as the primary means of purchasing goods.

The data suggests that consumer confidence is a key driver in the increase in online sales. Consumers need to see signs of the pandemic coming under control before they feel comfortable enough to spend. This indicates that the recovery of physical retail may be slower as consumers continue to prioritize online shopping even with the reopening of stores.

To gather these findings, Global-e monitored the growth of cross-border e-commerce orders from over 350 merchants selling internationally, with a focus on fashion and beauty products. The company discovered that there was an average recovery period of six to eight weeks after the initial lockdowns, during which discretionary spending saw a sharp decline. However, sales figures gradually rebounded to pre-pandemic levels once lockdown measures started easing.

The analysis conducted by Global-e covered the period from January to April, encompassing the various phases of the pandemic in different countries. The results revealed significant variations in market performance between regions that were less affected by the virus compared to those with high infection rates and strict quarantine measures. Additionally, market performance differed depending on the phase of the pandemic in each region.

For instance, Italy, a country heavily impacted by COVID-19, experienced a decline in sales during the peak of the virus in February and March. However, cross-border sales saw an increase of over 40% in April, surpassing pre-crisis levels. This suggests that as infection rates decline and consumer confidence gradually increases, online cross-border spending significantly rises while physical retail remains subdued.

In less-affected European markets like Austria and Denmark, discretionary online cross-border spending grew substantially in March and April as consumer confidence grew. Even with strict quarantine measures, Gulf countries maintained strong discretionary online cross-border imports, with sales reaching almost pre-crisis levels between January and March. This was followed by a significant surge in April sales, driven by the upcoming Ramadan holiday gifting.

East Asian markets, which were the first to be hit by COVID-19, experienced a decline in sales in January and February due to increasing infection rates, casualties, and widespread lockdowns. However, by March, sales began rebounding and reached a similar level to that of December.

On the other hand, countries like Australia, New Zealand, and the US, which implemented lockdown measures relatively late, are still experiencing low trading volumes. The US specifically saw a 25% decrease in April compared to March’s sales figures.

Amir Schlachet, co-founder and CEO of Global-e, emphasized the significant impact of COVID-19 on global consumer shopping behavior. Many retailers have become heavily reliant on their online stores as physical stores remain closed. The spread of the virus varies across markets, and retailers selling internationally have managed to balance sales and in some cases, witness overall increases in their international e-commerce sales throughout the crisis. Schlachet also noted that even with the lifting of lockdown measures and the reopening of physical stores, a significant number of consumers continue to shop online, suggesting that the recovery of physical retail may be slower and may not fully return to pre-crisis levels.

In conclusion, the global cross-border e-commerce sales in the fashion and beauty sectors have seen an 11% increase this year due to the COVID-19 pandemic. Consumer confidence plays a vital role in driving online sales, and the recovery of physical retail may be slower. Cross-border e-commerce will continue to be crucial in the recovery of retailers, allowing them to meet the demand from countries that have already passed the peak of the pandemic and returned to normalcy.

Useful links:
1. Global-e: How the Coronavirus is Impacting Global E-commerce – A Data Analysis Report
2. Forbes: Cross-Border E-commerce Revenues Will Top $627 Billion By 2022