Augmented Reality & Virtual Reality Market for Commerce Industry - Forecast (2022 - 2027)

The market for AR and VR in Commerce is forecast to reach $3.2 billion by 2027, growing at a CAGR of 28.4% from 2022 to 2027. The market is driven by the increasing popularity of Augmented & Virtual Reality Devices due to better user engagement with a high recall rate. The commerce industry saw a huge change when the e-commerce concept gained mass adoption. Prominent companies such as Walmart, Blockbuster suffered when people began purchasing products online, and players such as Amazon, eBay and Netflix gathered the majority of the market share. Augmented reality and virtual reality could become an extension of e-commerce. For example, recently, IKEA launched an application called “IKEA Place” which allows users to view the furniture products as if they were placed in the user’s home. This would help speed up the purchase decision process. Although this technology is not expected to reach the heights of success as that of e-commerce, it will still be vital going forward.

Report Coverage

The report: “AR and VR in Commerce Market- Forecast (2022-2027)”, covers an in-depth analysis of the following segments of the AR and VR in the Commerce Market.

• By Type - AR (Software and Services), VR (Software and Services)
• By Platform - Head Mounted Display, Head Up Display, Handheld Device, Mobile Devices, Projector and Wall Display.
• By End Use Industry - Tourism, Retail, E-Commerce and Advertisement.
• By Geography - North America (U.S, Canada, Mexico), South America(Brazil, Argentina and others), Europe (Germany, UK, France, Italy, Spain, Russia and Others), APAC(China, Japan India, SK, Aus and Others), and RoW (the Middle East and Africa).

Key Takeaways

Augmented Reality and Virtual Reality have opened up new avenues for Commerce Industry. V-Commerce (Virtual Commerce, which is Augmented and Virtual Reality integrated Commerce) has brought in quite a remarkable change in the online retail world, as Augmented Reality doesn't require or requires less hardware and requires devices that most people are familiar with such as tablets and smartphones.

Both Augmented Reality and Virtual Reality technically elaborates the scope of E-Commerce and took the interaction to a whole new level altogether.

As per this research, more than 60% of online shoppers prefer to purchase items that offer Augmented Reality on websites in one way or the other. It’s inarguable fact that both Augmented Reality and Virtual Reality have increased user interaction for many companies and helped them to upsurge their user base.

AR and VR in Commerce Market Segment Analysis - By Platform

In the Platform Segment, mobile phones stood as the fastest growing subset with an estimated CAGR of 35% during the forecast period. MAR (Mobile Augmented Reality) is expected to account for more than 52% of the AR Application Market by 2026. The significant focus of companies in developing MAR solutions is expected to drive market growth. Facebook will be providing users an augmented reality experience via advertisements in the application. Users of the application may view fashion goods such as eye glasses and shoes, and try them on virtually. Many other companies have similarly developed solutions focused on the mobile market particularly for E-Commerce application.

AR and VR in Commerce Market Segment Analysis - By End Use Industry

AR and VR in the commerce sector are driven by the rising number of AR solutions focused on the E-Commerce market. Augmented Commerce is currently being used by various retailers to sell their products such as IKEA (Furniture), Converse (Shoes), eBay (FMCG), Amazon (FMCG), etc. Augmented Commerce could be used by organizations to allow users to try games, clothes, furniture, cars, etc. before purchase. People could view what a flat would look like (and features like paint and furniture) by walking around through the application, and another application allows users to view the interior and exterior of various cars. Google has made a huge investment in an ecommerce giant that was making use of augmented reality technology to boost its sales. Google has previously invested in companies that are developing upcoming technology such as DeepMind AI. Similar investments are expected from organizations that want to leverage the technology for their operations.

AR and VR in Commerce Market Segment Analysis - By Geography

North America region holds the largest market share in the Artificial Intelligence in Commerce Market at 42% in 2020. However, APAC witnesses the highest growth during the forecast period and is expected to reach. Americas Artificial Intelligence in Commerce market is mainly driven by the higher penetration of the AR and VR technology among the tech savvy people. The key applications including Tourism, E-learning, and E-commerce among others.

AR and VR in Commerce Market Drivers

Rising Investment from Market Leaders

The market for AR and VR is rising due to increased investment from market leading players. Facebook integrating augmented reality ads into its application: Facebook will be providing users an augmented reality experience via advertisements in the application. Users of the application may view fashion goods such as eye glasses and shoes, and try them on virtually.

IKEA introduced an AR app named Place, which enables Apple users to set IKEA furniture in their apartments and preview an interior before buying products. Thanks to this solution potential customers can choose furniture easier.. eBay collaborated with a local firm to open virtual stores in Australia. eBay was one of the first movers in the market, when the industry began developing applications for this technology. Amazon is also offering VR experiences in select cities. Amazon is trialling VR with a view to boost their Prime Day sales. Another e-commerce giant, eBay did the same in 2016 in Australia. We can expect these big players to raise the awareness of the technology through such events before the potential app launches thus driving market awareness and thereby the market.

Rising Focus on Improving Customer Experience

Augmented Reality & Virtual Reality is a perfect mix of technologies to engage a customer. A memorable happy experience often leads to a satisfied customer. AR/VR technologies are likely to give an enriching experience to the customer which increases the chances of customer satisfaction significantly. As this technology is meant to make it easy and memorable for customers and it is likely to have an upper hand in leading to satisfied customers for companies as well. Customer engagement and Interactivity are not only required after onboarding the customer but is important to aware and attract as well. These AR/VR technologies can extensively be used as marketing tools to spread awareness about a product. This enhanced customer experience offered through AR and VR solutions will drive market growth.

AR and VR in Commerce Market Challenges

Lack of Awareness of AR Content

The biggest challenge with AR is the lack of awareness of AR content from consumers. AR and VR content can come in many forms, and this could be a cause for confusion. There’s still not much clarity over whether consumers are aware these tools are available to them, or if they realize they’re engaging with AR or VR when they use them. In a recent research study conducted by GWI in the UK and U.S., we found that over 90% of consumers in these markets are aware of VR, with around 65% saying they’re aware of AR. Awareness of AR hovers between the 70-75% mark among the 16-44 age group, but drops dramatically among 45-54s (56%) and 55-64s (44%). By gender, males (71%) display a notably higher level of awareness of AR compared to women (59%). This has resulted in a limited focus on the AR market especially for applications outside gaming.

Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the AR and VR market in Commerce. Key Companies operating in the market include Amazon, Ikea, Facebook, Sephora, BMW, Harley Davidson, Sotheby and various other companies.

Acquisitions/Technology Launches/Partnerships

Amazon is trialing VR in a few selected cities in India, with a view to boost their Prime Day sales.

Facebook will be providing users an augmented reality experience via advertisements in the application. Users of the application may view fashion goods such as eye glasses and shoes, and try them on virtually.


This product will be delivered within 2 business days.