Retail enters the era of "control economy": growth is highly concentrated in digital channels.

Event Overview

In 2025, the global retail market has entered a phase of "controlled economy": overall growth is only 2%, but e-commerce contributes about 80% of the increment. Euromonitor International points out in its latest report that growth has not disappeared but is highly concentrated in a few channels, platforms, and decision-making systems. The core of retail competition is shifting from scale expansion to control over pricing, product discovery, profit margins, and consumer decision-making processes.

Market Background

The slowdown in global retail growth has persisted for several years, but the structural changes in 2025 are particularly pronounced. Traditional brick-and-mortar retail is struggling to grow, while digital channels, leveraging algorithmic recommendations, real-time price comparison, and low-price strategies, have attracted the vast majority of incremental demand. According to the Euromonitor Voice of the Industry Survey 2025, 62% of industry professionals expect global tariff changes to impact their business within 12 months. The U.S. has eliminated the de minimis exemption, and the UK, Japan, and the EU are following suit with similar regulatory adjustments. Combined with geopolitical risks such as the Middle East conflict, supply chain stability is under further pressure.

Specifically, war risk surcharges have risen to $1,500–$4,000 per container, fuel costs have increased, and ship diversions have extended transit times by 10–14 days. These cost pressures have already been transmitted to retail operations: platforms like Temu have extended delivery windows, and Inditex has reported clothing delivery delays due to air cargo disruptions in the Gulf region.

Platform and Brand Impact

Platforms and brands face a two-way squeeze. On one hand, consumer demand is shifting toward low-price channels, driving sustained growth in traffic and GMV for ultra-low-price digital platforms (such as Temu and SHEIN). On the other hand, AI-driven product discovery mechanisms are reshaping the connection between brands and consumers. In 2025, AI-driven recommendation traffic to e-commerce platforms increased by 304%, far outpacing the growth rate of traditional traffic channels. This means that retailers and brands are losing control over the visibility of their products, with algorithms becoming the new "gatekeepers."

Brands are forced to reassess their pricing and differentiation strategies. Euromonitor’s report notes that retailers must choose between "price competition" and "differentiation competition," and attempting to hold both fronts simultaneously is no longer realistic. Many brands are expanding their tiered product portfolios, increasing investment in private labels, building loyalty-based value ecosystems, and covering different consumer segments through sub-brand extensions.

Consumer Trend AnalysisConsumer behavior is undergoing a structural shift. According to Euromonitor Voice of the Consumer: Lifestyles Survey (January–February 2026), 47% of global consumers plan to increase savings over the next 12 months, indicating that price sensitivity is evolving from a short-term inflationary response into a long-term behavioral habit. Consumers are increasingly influenced by ultra-low-price digital platforms, with algorithm-driven price transparency and sluggish growth in discretionary spending further reinforcing this trend.

The consumer "saving money" mindset does not imply across-the-board downgrading, but rather a tendency to seek the best prices on core categories while being willing to pay a premium for differentiated value (e.g., sustainability, brand storytelling, convenience). This bifurcated consumer behavior requires brands to position themselves precisely.

Regional Market Impact

North America The U.S. de minimis exemption cancellation directly impacts the low-cost cross-border parcel model, and platforms relying on small-value duty-free imports (e.g., Temu, SHEIN) face rising costs. At the same time, U.S. consumer savings intentions are rising, though e-commerce penetration is still slowly increasing.

Europe Tighter import rules in the UK and EU, combined with energy cost pressures, further compress retail profit margins. However, European consumer preference for sustainable and locally sourced products offers opportunities for differentiated brands.

Asia Chinese platforms (Temu, SHEIN) encounter tariff barriers in global expansion, but the Southeast Asian market continues to see relatively high growth. Consumers in Japan and South Korea are becoming more price-sensitive, benefiting discount retail and private labels.

Middle East and Latin America Conflict in the Middle East is driving up logistics costs, impacting regional retail supply chains. Latin America has low but potential e-commerce penetration, though infrastructure and exchange rate volatility remain obstacles.

Africa The consumer base is large but purchasing power is limited; low-price channels and mobile-payment-driven social commerce may become breakthrough points.

Future Trends

1. AI-Controlled Product Discovery: Generative AI will become more deeply embedded in the shopping decision chain. Brands must invest in AI-optimized content and advertising, or risk being "invisible" to algorithms. 2. Capability Reshaping in the "Control Economy": Retailers need to build five strategic capabilities (Euromonitor calls it the "5-vector strategy reset"), including data-driven pricing, supply chain resilience, AI governance, omnichannel seamless experience, and ecosystem collaboration. 3. Supply Chain Regionalization: Geopolitical and tariff pressures drive nearshoring and diversified sourcing, shifting from "efficiency first" to "resilience first." 4. Consumer Polarization: Both low-price platforms and premium brands have opportunities, but the mid-market will face the greatest squeeze. Private labels and membership systems become tools for premiumization. 5. Regulatory Risk as the New Normal: Global trade rules continue to tighten; platforms and brands must build compliance and supply chain redundancy.Euromonitor concluded: "The key challenge for retail leaders today is no longer just how to grow, but how to maintain discoverability, preference, and profitability in a system they do not fully control."