Posted on: E-Commerce on October 13, 2021
The subscription purchasing model is gaining momentum post-COVID-19, with developing countries setting the trend: new yStats.com report.
The latest publication from Germany-based online research firm yStats.com, “Global Subscriptions and Recurring Payment Market 2021” provides insights into the current state and advances of the subscriptions and recurring payment markets worldwide. Among other findings, the publication reveals that despite moderate growth rates of the subscriptions market in the next four to five years, the absolute sales value was set to follow an upward trend.
The COVID-19 pandemic accelerated the trend for subscriptions and recurring payments
The subscriptions and recurring payment markets are still rather young, but they are developing fast, especially after the onset of COVID-19. According to a 2021 survey cited in the new yStats.com publication, almost 40% of respondents signed up for new services during the pandemic, as they expected these services would help them to better navigate these challenging times. For example, in the United Kingdom, around 20% of the new box subscribers in 2021 chose this option because they were not able to visit physical store. Furthermore, the fact that even a higher share did so because they simply enjoy the subscription model must be revealing for businesses. Generally, in the countries considered in the present market report, absolute figures of the subscriptions market sales values were set to grow significantly in the next few years, though growth rates are expected to be less pronounced.
Certain product categories are especially successful inside the subscription business model
Both globally and in Europe specifically, “Boxes”, “Video”, and “Multiservice subscriptions” were the top three categories for consumers to have a subscription in 2020 and in 2021 and were expected to remain the leaders in 2025. Additionally, while in Europe the ranking was expected to stay the same in 2025, among the global consumers, “Multiservice subscriptions” were forecasted to outpace “Video”. The latter, however, appeared to be still an attractive market to offer subscriptions services. In Asia-Pacific, video subscription services were expected to gain almost half a billion subscribers by 2025, with China leading, followed by India, and Japan. The market in Latin America was forecasted to grow even faster than in Asia-Pacific through 2025. In North America, during the last year, the market growth rate was especially pronounced in the sector of consumer retail products and digital media, according to the new yStats.com report.
Payment service providers offer upgraded services for subscription businesses
Moreover, to secure a superior customer experience, research included in the new yStats.com report suggests that companies offering subscription services need to collaborate with payment service providers that have recurring payment services in their portfolio. According to the recent evaluation of such PSPs operating in the United States, Square ranked first, followed by PayPal and QuickBooks Payment, as detailed in the new yStats.com publication. Regarding the specific payment methods, across select developed global markets, the majority of B2C companies chose digital wallets for recurring payments, while B2B companies preferred bank wire transfers. Lastly, global B2B & B2C businesses made plans last year to invest substantially in expanding or upgrading recurring payment service implementation, and a further significant share of enterprises plan to implement similar solutions in 2021.