The shift back to in-store shopping post-pandemic is proving short-lived, as e-commerce in Europe is set for rapid expansion. According to Forrester’s latest forecast, e-commerce sales across the five largest European economies (France, Germany, Italy, Spain, and the UK) will grow at a compound annual growth rate (CAGR) of 7.8%, reaching €565 billion by 2029. This marks a significant leap from €389 billion in 2024 and points to a decisive tilt toward digital shopping.
By 2029, e-commerce will account for nearly 21% of all retail sales in these five markets, up from 16% in 2024. The resurgence of online sales is being fueled by economic recovery, increased adoption of omnichannel strategies, enhanced price transparency, and the expansion of cross-border marketplaces.
Offline retail loses momentum
According to the research, in-store sales, which saw strong post-pandemic rebounds, are now slowing. The growth rate of offline retail in Europe-5 is very likely to be just 1.7% annually by 2029, down from 8.9% in 2022 and 4.1% in 2023. This sluggish growth contrasts sharply with the continued dynamism of digital commerce.
Among the Europe-5 nations, the UK will most likely maintain its dominance in e-commerce, with sales projected to hit £176 billion (€207 billion) by 2029, up from £130 billion (€152 billion) in 2024. E-commerce will make up 32% of the UK’s total retail sales, reinforcing its position as the region’s most digital-centric market.
Germany follows closely, with online sales forecasted to jump from €97 billion in 2024 to €146 billion in 2029, comprising 21% of its total retail sector. Meanwhile, France will see its online sales climb from €73 billion to €106 billion, with e-commerce penetration rising from 14% to 17% over the same period.
Jitender Miglani, principal forecast analyst at Forrester, said: “European retailers should consider investing in advanced digital platforms to adopt omnichannel strategies to meet growing demand online. Getting customer experience right in both online and offline realms will dictate market dominance in the next decade.”
What’s driving the e-commerce surge?
Several factors are accelerating the shift towards online shopping in Europe. As inflation eases and economic conditions improve, non-essential retail categories like fashion and consumer electronics expect a strong rebound. Additionally, the rise of emerging online shoppers and the growing influence of cross-border e-commerce platforms, including the likes of AliExpress, SHEIN, and Temu, is changing the retail landscape.
With consumers increasingly prioritising convenience, price competitiveness, and digital-first experiences, retailers who embrace omnichannel strategies and leverage international marketplaces stand to gain the most in the years ahead.