The global express market grew by 8.2% in H1 and will expand by 7.2% for the whole year
Growth outlook is largely driven by strong demand from online retail, as consumers have turned to e-commerce amid the lockdowns
The international express market is expected to grow by just 1.8% in 2020, affected by the collapse of the B2B market
Asia-Pacific is the only region projected to show quicker growth in the second half compared to H1
The growth is down from an expected 7.9% expansion pre-Covid, Ti said in a new whitepaper.
The outlook is largely driven by strong demand from online retail, as social lockdowns and the closure of many retail and leisure businesses saw consumers turn to e-commerce.
Ti said eMarketer data puts total online retail spending at US$3.9 trillion in 2020, with Asia-Pacific the largest by sales value at $2.45 trillion.
“e-commerce has proved to be far from just a ‘nice-to-have’ addition to a traditional bricks-and-mortar strategy. The pandemic has made it an almost business-critical requirement across swathes of the retail sector,” said Ti.
However, the collapse in demand in the B2B express sector through the first half of 2020 has inhibited overall growth. The international express market in particular has been affected, and is expected to grow by just 1.8% in 2020, compared to the 5.2% expected before Covid-19.
But a bounce-back for the economy should see B2B parcels pick up again, Ti forecasts. “The recovery in this higher-margin element of the market will be good news to those that have struggled to cope with the costs of B2C deliveries or those without that delivery capability.”
The global express market grew by 8.2% in the first half of 2020, but the second half is likely to see slower growth.
“e-commerce penetration is expected to remain elevated relative to long-run trends, but year-on-year growth in e-commerce sales will not come close to the rates seen whilst the tightest lockdown orders were in force,” said Ti.
The Asia-Pacific is the only region projected to show quicker growth over the second half of 2020, with express market expansion jumping from 7.7% in the first half to 8.7% in H2. However, growth in 2020 is expected to fall short of the 10.5% seen in 2019.
In China, e-commerce sales had a mixed first half that saw a decrease of 0.8% in online retail in the first quarter compared to 2019. But as the lockdowns were lifted and the economy started to recover, China’s e-commerce giants reported strong earnings for the second quarter.
The North American express market almost doubled its growth in the first half to 11.6% compared to 6.6% in 2019. The US in particular has seen intensified activity in H1, as the e-commerce market saw sales rise dramatically during the pandemic. For the whole year, the region’s express market is seen to grow by 8.7%
The total European express and parcels market grew by 4.2% in the first half of 2020, down from 2019’s 4.7% expansion. However, the forecast for the full year shows a drop by 1.1 percentage points from the H1 expansion to 3.1%.