American e-commerce is booming, and Fintech is coming in full force
A big change is on the horizon, and the numbers don’t lie: US e-commerce sales hit $250 billion in the first quarter of 2022, up 6.6% from the previous year. That’s already more than double the amount that experts expected the US e-commerce market to reach by 2022, with sales exceeding $875 billion. The US may be on track to record its highest annual online sales ever. With a growth rate of 16.1%, there is no doubt that the market is poised to unlock $1.06 trillion by 2022.
It seems that China’s supremacy in online sales is about to be knocked off its pedestal by American e-commerce. Despite leading the global e-commerce market, with total online sales exceeding $2 trillion by 2021, these numbers are lagging behind. The online shopping race is on, and the US is in the fray this time.
The big e-commerce guys have a big slice of the pie
As consumer behavior changes and online sales increase, e-commerce continues to rise and rise, with no end in sight. The fashion and apparel segment remains the largest, with expected sales of $1003.5 billion by 2025. Now you can order online or fit through AR. Soft and digital goods are also expected to dominate e-commerce sales. But it is the food and beverage segment that has seen the most explosive growth, and by 2023, online grocery sales will account for 11.2% of total US grocery sales.
As major players break out of the hype cycle, new dropshipping providers and DTCs want faster solutions, but traditional banks are still rooted in the past. There is no way to manage your team or add all employees. No real-time updates that help make faster decisions. And if you don’t make them fast enough, your rivals will.
Challenging racial opportunities in Fintech
A whirlwind in the e-commerce space is getting stronger. The iOS privacy updates have affected social media strategies, and have led to costs. Now the digital advertising market is snowballing, especially in the US. The latest forecast predicts that US advertisers will spend a total of $239.89 billion on digital advertising in 2022, an increase of 13.6% from 2021. Google Ads and Facebook Ads remain among the top spending categories, and TikTok is growing strongly. The more you scale, the more critical it is to make every payment traceable, limit vendors, separate teams and advertising campaigns, and pre-set budgets so you don’t have to approve every payment. Control must be restored.
Fintech is now rebuilding itself for e-commerce
Fintech entrepreneurs are on a mission to change the way e-commerce teams manage spend. Here comes the new era of vertical financial services – they are tailored to a specific niche, supported by marketers and developers seeking to solve manual daily routine problems, and driven by innovations. When software is created by those who have a deep understanding of the needs of e-commerce businesses, it becomes truly agile.
New fintech has become a secure way to manage payments, and e-commerce companies have finally realized this. While providing all-in-one services for e-commerce teams, modern fintech solutions enable more secure workflows and help e-commerce owners take control of expenses, rethink staff roles, give employees more freedom and scale at every step. For example, Karta makes it easy to create budgets for a team, a project or an ad network. Everything is updated in real time and you don’t have to wait until the end of the month to make changes to your cash flow.
As more e-commerce brands cut ties with traditional banks and move to the fintech drive, they will realize that they can build new strategies to attract more customers. Full control over expenses leads to greater prosperity. E-commerce’s share of retail sales will probably peak around 2040, when 95% of all purchases are expected to take place online, and fintech has all the power to serve this industry. The world’s fastest-growing retail segment sits at the intersection of fintech and e-commerce, and it’s poised to take the world by storm.
