Shop Culture, a global brand strategy and e-commerce services firm, has unveiled insights from its latest intelligence report, “The Commerce Reckoning: 2025 Global Intelligence Report,” highlighting critical challenges reshaping the global e-commerce ecosystem, including rising retail media costs, declining returns, compliance gaps, and the growing importance of quick commerce and geographic diversification.
Based on observations across more than 20 markets, the report reveals that while global e-commerce continues to expand, profitability is increasingly under pressure due to rising advertising costs, inefficient operating models, and outdated growth strategies.
The report projects global e-commerce to surpass $6.86 trillion in 2025, with 2.77 billion consumers expected to shop online. However, average return on ad spend (ROAS) has declined to 2.87:1, indicating growing pressure on brands to convert scale into sustainable margins.
A major factor behind this trend is the persistence of a “growth-at-all-costs” strategy that emerged during the post-pandemic boom but is no longer viable in today’s cost-intensive environment.
Highlighting key structural shifts, the report notes a significant rise in retail media costs, with Amazon reporting average cost-per-click increasing by 15.5% year-on-year to $1.12. Additionally, while 77% of e-commerce professionals use AI daily, many brands are yet to achieve meaningful outcomes, as AI often amplifies existing inefficiencies rather than resolving them.
Geographic diversification has also emerged as a critical margin strategy, with the share of Shop Culture clients operating in multiple regions increasing from 30% in 2024 to 65% in 2025.
Commenting on the findings, Subarna Mukherjee, Founder & CEO, Shop Culture, said,
“The e-commerce industry has a nostalgia problem. While earlier strategies delivered rapid growth, the current landscape demands more disciplined, efficient, and sustainable approaches. The challenge today is not growth, but how brands operate within a more complex ecosystem.”
Quick Commerce Emerges as a Key Growth Driver in India
The report identifies India’s quick commerce segment as one of the most significant growth engines in modern retail. The sector is expected to reach $5.38 billion in 2025, growing at 17%, making it one of the fastest-growing globally.
Case observations cited in the report demonstrate its impact: in one instance, quick commerce contributed 70% of a packaged food brand’s online revenue, while another beauty brand recorded 25% higher average selling prices compared to traditional marketplaces.
Compliance and Strategic Expansion Take Centre Stage
The report underscores the growing importance of compliance, especially in European markets, where regulatory readiness has become a direct revenue driver. Brands with pre-built compliance frameworks can launch within 8–12 weeks, while others may face delays of up to six months.
It also highlights the need for disciplined international expansion, recommending strategic market entry sequencing based on efficiency metrics, regulatory readiness, and competitive intensity, rather than prioritising only the largest markets.
AI: An Enabler, Not a Standalone Strategy
The report emphasises that AI, when implemented effectively, can significantly improve performance. Across over 1,500 AI-optimised listings, Shop Culture recorded 10–15% improvement in conversion rates, 7–10% reduction in TACOS, and a 20% decrease in stockouts.
However, Mukherjee cautioned, “AI is not a growth strategy—it is an amplifier. It enhances strong systems and exposes weak ones.”
Outlook for 2026
Looking ahead, the report outlines that sustainable growth will depend on building strong margin structures, diversifying channels, ensuring compliance readiness, and leveraging AI strategically. It also identifies key growth markets including the US, UK, EU, as well as emerging regions such as South Africa and Brazil, alongside Tier 2 and Tier 3 quick commerce markets in India.
Shop Culture currently manages over $200 million in GMV globally, operating across 20+ countries and supporting brands across multiple sectors including beauty, health, grocery, electronics, fashion, and automotive.
