Impact of Inflation on E-Commerce

Inflation has emerged as a significant macroeconomic factor influencing the e-commerce landscape. It peaked at over 9% in July 2022 but has since decreased to approximately 2.7%, affecting consumer purchasing power and the cost of capital. The Federal Reserve's adjustments to interest rates are also crucial for e-commerce operators, as higher rates increase borrowing costs while making it difficult to maintain competitive pricing. Operators often hesitate to raise product prices despite inflation, leading to squeezed margins and potential business vulnerabilities.