E-Bomb! US e-commerce is the preserve of the old and rich, warns new report, while most of the world skews young


The first demographic timebomb facing developed economies is well known. Birth rates are declining in America, the UK, Japan, South Korea, and many parts of Europe, all of which saw a post-war population spike: the Baby Boomers and Generation X. This is a core reason for the development of some AI and robotics technologies, of course: an urgent need to fill the labour gap created by ageing populations.

But there is another explosive trend ticking in developed economies. And this one is an E-bomb.

According to a new report from cross-border payments FinTech EBANX and the World Data Lab, it is rich Boomers and Generation X, plus wealthy Ys, that are buying goods and services online – not the young, who are walking away. The EBANX Beyond Borders 2026 report shows that American consumers over the age of forty-five account for half of all e-commerce spending, rising to fifty-four percent of digital transactions by 2035.

But it is not as straightforward as the figures mapping directly to demographic splits: at present, those aged over forty-five account for 42% of the US population, not over half. Meanwhile, the only age group projected to grow its e-commerce share over the next decade is those aged sixty-five-plus, adds the report, rising from 19% to 23% of online sales.

The conclusion is that the US has one of the oldest e-commerce spending profiles in the world. So, something is happening in American society: a growing gap in disposable income, perhaps? A widening disparity in wealth, as young people find themselves mired in debt and unable to get on the housing ladder or pay their bills, while employment worries loom as AI takes entry-level jobs?

The report confirms that is the case:

Eighty-four percent of American online spending is driven by Rich and Upper Middle Class consumers, those spending more than $90 a day. That's the highest level of concentration among the 184 countries analyzed and is expected to reach eighty-eight percent by 2035. Meanwhile, the share held by Core Middle and Lower Middle segments, defined by daily spending of between $13 and $90, is projected to shrink from 15% to 12% in the same period.

Grey power?

So, America’s old and middle-aged rich are shopping online, and the poorer young are not, which suggests falling revenues once the Boomers and Generation X leave the planet.

For a company such as $2.27 trillion Amazon, whose e-commerce business is nearly seventy percent based in the US and accounts for over one-third of online retail sales, that must be a concern. Likewise for its competitor Walmart, the world’s largest company by revenue, and Shopify. Between them, those three brands account for half of US online sales. Amazon, meanwhile, is one of the handful of Big Techs whose market cap is propping up the US stock market.

Yet the situation is even starker in other nations where the demographic time bomb is ticking: in Japan, whose postwar recovery was rooted in electronics, high-tech toys, and household gadgets, 60% and rising of e-commerce lies in the hands of middle-aged and senior citizens, while in highly automated South Korea it is fifty-five percent and rising, Germany and France 54%t, the Netherlands and Canada 50%, and the UK 49%.

So, is the message simply that, as the population ages, so does the e-commerce model? Only in developed economies, says the report, because it is far from the case that online shopping is dying. And that is demonstrated by the planet’s developing and fastest-growing economies, where e-commerce is experiencing a 'youthquake'.

EBANX says:

Across most of the countries in Africa, Asia, and the Middle East, e-commerce is dominated by younger buyers. Consumers under thirty drive 65% of online spending in Nigeria, 62% in Kenya, 52% in Egypt, 51% in the Philippines, 47% in India, and 44% in Malaysia. In Latin America, the distribution is more balanced, but younger cohorts still claim a larger share in Mexico (41%), Argentina (34%), and Brazil (32%) than they do in the United States (26%).

Reasons

So, what is going on? Estelita Hass, Head of Market Intelligence at EBANX, offers an explanation:

The world's largest economies built their digital commerce on cards, high disposable income, and decades of retail maturity – a system shaped by consumers who were already adults when e-commerce began. But most emerging markets leapfrogged that cycle entirely, going straight to mobile and instant payments. The result is an entire generation entering online commerce with no attachment to traditional retail, fully digital from the start of their consumption lives.

The evidence is clear from the FinTech’s research - e-commerce now occupies a much larger share of consumer spending in those economies than it does in the US, where online channels account for a little over nine percent of total household spending.

For a comparison, consider this: in India, digital purchases account for 22% of all expenditure, while in China nearly two-thirds of all expenditure (63.4%) is digital. A staggering figure compared with the US tally of less than ten percent.

That chasm is growing, warns EBANX: consumer spending in emerging markets is projected to rise 94% over the next decade, nearly double the 49% expected in developed economies. Southeast Asia and India alone are on track for nearly 150% spending growth, compared to just 52% in the US.

Hass confirms the bad news for American e-commerce – and for other developed Baby Boom economies:

This is the defining asymmetry of global digital commerce today. The developed economies are deep but narrow, with high spending concentrated among an older, affluent base. Emerging markets are broad and getting broader, with lower average tickets but a consumer pool that is expanding exponentially.

Ouch. Across Africa, Asia, and Latin America, an average of 53 cents of every e-commerce dollar comes from Core Middle and Lower Middle buyers, continues the report. Among the countries where those two segments hold the largest share are Vietnam (86%), Thailand (80%), Nigeria (78%), Peru (75%), the Philippines and India (72%), Kenya (71%), Brazil (59%), and Colombia (57%).

Financial inclusion is a major contributor, explains Hass:

The strong concentration of online spending among the middle class traces back to financial inclusion and the digitalization of payments that these economies have undergone in recent years. Pix in Brazil, UPI in India, mobile money in Africa, and e-wallets across all these regions gave the broader population access to many products and services that until then had been reserved for credit card holders – in other words, for the wealthy.

The digital consumer that American and European companies know at home – older, affluent, card-native – is an outlier in the global landscape. The vast majority of the world's online buyers are younger, earn less, and pay differently. They are entering the digital marketplace for the first time, and they are doing so on their own terms.

My take

So, old, rich America, plus Japan, the UK, Germany, France, and South Korea need to stop pandering to the needs of their ageing, wealthy Haves online and start empowering the young, instead of burdening them with debt and automating their prospects. After all, we expect them to look after us one day, unless we plan to count our money alone in a room full of robots?

Don’t forget: the same super-brands that find themselves serving old, wealthy buyers rather than the dis-enfranchised young are also the ones whose overvalued stocks are propping up Wall Street.