Emerging Online Retail Market Trends: Advancement In AI-Powered Personalization Tools Enhance Customer Engagement In Online Retail Shaping the Future of the Industry

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Online Retail Market Size Growth Forecast: What to Expect by 2025?
Recent years have seen a swift acceleration in the size of the online retail market. This rate of growth is expected to lead to an expansion from $7,129.17 billion in 2024 to $7,865.98 billion in 2025, equating to a compound annual growth rate (CAGR) of 10.3%. The historic period's growth can be credited to factors such as increasing internet accessibility, a surge in smartphone utilization, a higher customer preference for convenience, improved access to digital payment systems, and escalated investments made by initial e-commerce companies.

How Will the Online Retail Market Size Evolve and Grow by 2029?
Expectations are high for a brisk expansion of the online retail market in the forthcoming years. The anticipated value by 2029 amounts to $11,501.61 billion, predicting a compound annual growth rate (CAGR) of 10.0%. Numerous factors will contribute to this growth during the predicted timeframe, such as an increased demand for customized shopping experiences, widespread application of AI and machine learning, the growing popularity of voice and visual searches, the expanding presence of same-day delivery services, and the more frequent integration of augmented reality (AR) and virtual reality (VR) solutions. The time of forecasting will also see pivotal advancements in autonomous delivery systems, generative artificial intelligence (AI) technological progress, developments in voice commerce, the rise of immersive AR and VR shopping experiences, and breakthroughs in blockchain-supported supply chain transparency.

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What Drivers Are Propelling the Growth of Online Retail Market Forward?
The anticipated rise in the use of digital payment systems is projected to drive the expansion of the online retail market. Essentially, digital payment systems denote internet-based methods of carrying out financial activities via mobile apps or contactless technologies. The rising trend of digital payment systems adoption is largely fueled by the ubiquity of smartphones, which make digital transactions both more attainable and user friendly. These systems enhance online retail through providing fast, secure, and straightforward transactions, thereby boosting purchaser pleasure. Furthermore, they make the checkout process easier, reduce cart abandonment rates, and enhance sales effectiveness for sellers. To illustrate, the European Central Bank, located in Germany and acting as the central bank for European Union member states, reported in January 2024 that the number of contactless card payments during the first half of 2023 saw a 24.3% increase from 20.9 billion recorded during the first half of 2022, while the corresponding total value surged by 25.9% to €0.5 trillion ($545.27 billion). Consequently, the rising trend of adopting digital payment systems is fostering the expansion of the online retail market.

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Which Emerging Trends Are Transforming the Online Retail Market in 2025?
Leading corporations in the online retail sector are concentrating on creating innovative solutions such as AI-driven individualized shopping tools to enhance product discovery and enrich the consumer experience. These AI-driven personalized shopping tools make use of artificial intelligence to assess users' behaviors, preferences, and purchasing patterns, presenting more pertinent product suggestions to increase user engagement. For example, in March 2025, the US-based e-commerce corporation, Amazon.com Inc., introduced a beta version of Interests, facilitated by AI. This feature boosts customization, prolongs platform usage time, and strives to render online shopping more instinctive and delightful. The Interests tool perpetually scans Amazon's product range and proactively suggests products congruent with the customer's individual tastes, hobbies, and purchase history. It gives customers the ability to pursue particular interests and receive custom recommendations in a visual feed akin to Pinterest.

What Are the Key Segments in the Online Retail Market?
The online retail market covered in this report is segmented -

1) By Product: Groceries, Apparels And Accessories, Personal And Beauty Care, Footwear, Other Products
2) By Model: Business To Business (B2B), Business To Consumer (B2C), Consumer To Consumer (C2C)
3) By Portal: Third Party Marketplaces, Direct-To-Consumer (D2C) Brands Or Own Website

Subsegments:
1) By Groceries: Fresh Produce, Dairy Products, Beverages, Snacks And Packaged Foods, Meat And Seafood, Staples
2) By Apparels And Accessories: Men's Clothing, Women's Clothing, Kids' Wear, Bags And Wallets, Belts And Ties, Watches And Jewelry, Sunglasses And Eyewear
3) By Personal And Beauty Care: Skincare Products, Haircare Products, Fragrances And Perfumes, Oral Care, Grooming Kits, Makeup And Cosmetics, Bath And Shower Products
4) By Footwear: Men's Footwear, Women's Footwear, Kids' Footwear, Sports Shoes, Casual Shoes, Formal Shoes, Slippers And Sandals
5) By Other Products: Electronics And Gadgets, Home And Kitchen Appliances, Books And Stationery, Toys And Games, Fitness And Sports Equipment, Furniture And Home Décor, Pet Supplies

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Who Are the Key Players Shaping the Online Retail Market's Competitive Landscape?
Major companies operating in the online retail market are Walmart Inc., Amazon.com Inc., Apple Inc., Costco Wholesale Corporation, JD.Com Inc., The Kroger Co., Alibaba Group Holding Ltd., Albertsons Companies Inc., Best Buy Co. Inc., Adidas AG, Coupang Inc., Rakuten Group Inc., Zalando SE, eBay Inc., PUMA SE, Shopify Inc., Flipkart Internet Private Limited, Etsy Inc., Groupon Inc., Bata Limited

What Geographic Markets Are Powering Growth in the Online Retail Market?
Asia-Pacific was the largest region in the online retail market in 2024. The regions covered in the online retail market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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