U.S. E-Commerce Is Booming, and Fintech Comes in with Full Force

A major change is on the horizon, and the numbers don't lie: U.S. e-commerce sales hit $250 billion in Q1 of 2022, a 6.6% increase from the previous year. That's already more than twice the amount that experts expected the US e-commerce market to reach in 2022, with revenue over $875 billion. The US may be on track to record its highest annual online sales ever. With a 16.1% growth rate, there's no denying that the market is ready to unlock $1.06 trillion in 2022.

It seems that China's online sales supremacy is about to be knocked off its pedestal by U.S. e-commerce. Despite its lead in the global e-commerce market, with total online sales over the $2 trillion mark in 2021, these numbers lag behind. The e-commerce race is on, and the US is getting in on the action this time.

Big E-Commerce Guys Have a Large Piece of the Pie

As consumer behavior changes and online sales increase, e-commerce continues to be on the up and up, with no end in sight. The fashion and apparel segment remains the largest, with sales expected to reach $1003.5 billion by 2025. Now you can order online or make a fit through AR. Soft and digital goods are also expected to dominate e-commerce sales. But it's the food and beverage segment that has seen the most explosive growth, and by 2023, online grocery sales will make up 11.2% of total US grocery sales.

While big players are breaking out of the hype cycle, newcoming dropshipping suppliers and DTC want faster solutions, but traditional banks are still anchored to the past. There's no way to manage your team or add all your employees. No real-time updates that help to make faster decisions. And if you don't make them fast enough, your rivals do.

Challenges Breed Opportunities in Fintech

A whirlwind in the e-commerce space gets stronger. The iOS privacy updates have affected social media strategies, driving 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 are still among the top spend categories, and TikTok is growing strongly. The more you scale, the more it's crucial to make every payment traceable, limit vendors, separate teams and advertising campaigns, and pre-set budgets so you don't need to approve every payment. Control has to be restored.

Fintech is Now Rebuilding Itself for E-Commerce

Fintech founders are on a mission to change the way e-commerce teams manage expenses. Here comes the new era of vertical financial services — they're tailored to a specific niche, backed by marketers and developers seeking to solve manual daily routine problems, and driven by innovations. When software is made by those who deeply understand the needs of e-commerce businesses, it becomes truly agile.

New fintech has become a secure way to manage payments, and e-commerce businesses have finally realized this. While providing all-in-one services for e-commerce teams, modern fintech solutions enable safer workflows and help e-commerce owners to take control of expenses, reimagine staff roles, give more freedom to employees, and scale on every step. For example, Karta makes creating budgets for a team, project, or advertising network easy. Everything updates in real-time, and you don’t have to wait until the end of the month to make changes to your money flow.

As more e-commerce brands cut ties with traditional banks and turn to fintech-driven, they will realize they can build new strategies to attract more customers. Complete control over spending leads to greater prosperity. E-commerce’s share of retail sales will likely peak around 2040 when 95% of all purchases are expected to occur online, and fintech has all the power to serve this industry. The world's fastest-growing retail segment lies at the intersection of fintech and e-commerce, and it's poised to take over the world.

About Karta.io

Financial platform designed for e-commerce. Karta.io provides business account, smart virtual cards, transparent credits, cash flow insights, and budgeting tools to help companies reach their financial goals and grow faster.