McKinsey & Company’s recent report identifies 18 emerging “arenas” – industries characterised by high growth and dynamism – that are poised to significantly impact the global economy.
These sectors, including AI software and services, cybersecurity, future air mobility and robotics, are projected to generate between $29 trillion and $48 trillion in revenues by 2040, potentially increasing their share of global GDP from 4% today to 10–16%.
Historically, industries such as e-commerce, biopharma, electric vehicles and cloud services have demonstrated rapid expansion, with revenue and market capitalisation growth rates outpacing traditional sectors.
These “arenas” have not only contributed disproportionately to economic growth but have also fostered the emergence of global industry leaders.
The report highlights three key factors that contribute to the formation of these high-growth arenas:
- Technological or Business Model Innovations: Significant advancements or shifts that disrupt traditional practices.
- Escalatory Investments: Substantial capital infusions aimed at gaining market share and enhancing product quality.
- Expanding Addressable Markets: A broad and growing consumer base that drives demand.
The convergence of these elements leads to intensified competition, prompting companies to invest heavily in innovation and market expansion.
For stakeholders in the payments industry, these insights underscore the importance of strategic investments in emerging technologies and business models to capitalise on the growth opportunities presented by these dynamic sectors.
In this article we focus on the e-commerce section of the report.
The e-commerce industry, driven by technological advancements, expanding connectivity, and evolving consumer behaviours, continues to reshape the global retail landscape.
Already a significant player, this dynamic sector is set for further expansion, with its revenue projected to grow from $4 trillion in 2022 to between $14 trillion and $20 trillion by 2040.
A Decade of Unprecedented Growth
E-commerce’s meteoric rise has been fuelled by factors such as widespread smartphone adoption, advancements in last-mile delivery and the integration of digital payment methods.
In 2022, retail e-commerce accounted for 20% of the global retail market, with the potential to reach 27–38% by 2040.
Similarly, food e-commerce, which represented 4% of retail revenues in 2022, could grow to 7–9% by 2040, driven by the increasing popularity of online grocery shopping.
Emerging Markets: The Next Frontier
While developed regions like North America (25% e-commerce penetration) and Asia–Pacific (22%) have seen significant adoption, the real growth story lies in emerging markets.
In Latin America, the Middle East and Africa, e-commerce penetration in 2022 was just 12%, 4%, and 2%, respectively.
However, with growing smartphone penetration, broadband expansion and infrastructure improvements, these regions are poised for exponential growth.
For instance, smartphone penetration in India grew from 26% in 2018 to 36% in 2022 and is expected to reach 56% by 2027.
Similarly, sub-Saharan Africa saw an increase from 19% to 36% during the same period.
As connectivity improves, millions of new users are entering the e-commerce ecosystem, unlocking untapped potential in these markets.
New Formats Revolutionising E-Commerce
The evolution of e-commerce is not just about geography but also innovation in how consumers shop.
Social commerce – purchases made directly through social media apps – is a booming trend, particularly in China, where live-streaming sales accounted for over 30% of total e-commerce revenue in 2023.
Discount platforms like Pinduoduo and SHEIN are also reshaping the market with value-driven models that offer affordable pricing and engaging shopping experiences.
Meanwhile, conversational commerce, powered by generative AI and chat apps like WhatsApp, is making shopping more interactive, with the potential to grow to a $41 billion market by 2030.
Challenges and Opportunities for Payment Providers
For payment systems, e-commerce presents both challenges and opportunities.
Seamless, secure and localised payment solutions are critical for capturing market share in emerging regions.
Integrated payment platforms like Mercado Libre in Latin America demonstrate the importance of catering to local consumer needs, combining regional expertise with robust financial ecosystems.
Additionally, the rise of direct-to-consumer (DTC) channels and third-party logistics providers like Shopify is decentralising the traditional e-commerce model.
This shift underscores the growing importance of flexible, scalable payment solutions that can adapt to diverse business needs.
The Future: An Expanding Landscape
E-commerce’s future will be shaped by continued innovation and consumer adoption across new categories.
Emotional goods such as apparel, home goods and skincare are becoming increasingly popular online, while the food segment, which grew 34% annually between 2017 and 2022, is set to claim a larger share of the market.
As global markets evolve, payment providers and e-commerce platforms must remain agile, embracing new technologies and addressing region-specific challenges to capitalise on the opportunities ahead.
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