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E-Commerce in Germany
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E-Commerce in Germany: Mobile Shopping is booming

by Editorial Office

A rate of increase of 11.6 percent and the growth continues: Germans are using e-commerce more often, increasingly mobile and on a global scale. However, if you want to be successful as a retailer in Germany, you need to know the preferences of your target group very well.

Number five worldwide, number two in Europe

The e-commerce market in Germany is changing rapidly – much to the advantage of online retailers. Last year, total e-commerce sales amounted to 72.6 billion euros, which corresponds to a growth in sales of 11.6 percent. This once again puts Germany among the top 5 e-commerce nations worldwide. Within Europe, Germany ranks second place, as only the United Kingdom, with an industry volume of around 75 billion euros, has a slightly higher online turnover.

And the forecasts for 2020 are looking equally good: The Bundesverband E-Commerce und Versandhandel Deutschland e. V.  is estimating a further increase in sales of 10 percent for the current year.

Top segments: electronics and clothing

The segment with the highest online revenues remains, quite unchallenged, the “entertainment” segment. It includes consumer electronics and computers, but also photo and sound carriers, as well as games and software products. Here, 25.8 billion Euro were generated in 2019 – a revenue that is 2.6 billion Euro higher compared to  the previous year.

In second place, with a sales volume of 18.7 billion euros, ranks the “clothing” segment. That represents an increase of over 11 percent or almost 2 billion euros compared to 2018.

Growth segment: Furniture

At present, entering the German furnishing market is highly attractive for retailers. For years, this segment has shown the highest growth rate and has almost doubled its sales volume within five years. With rates of increase of 13.5 percent and 14.1 percent in 2019, the “interior” and “daily needs” segments are clearly in the fast lane, although the total volume is still moderate with revenues close to 11 and almost 5 billion euros.

Mobile shopping is becoming increasingly popular

The threshold for mobile shopping is continuing to fall in Germany: one third of all online purchases were already conducted via mobile devices in 2019 – five years ago, this was only the case for one in five purchases. The mobile trend offers attractive growth opportunities for online sellers, as consumers are shopping more spontaneously, emotionally and intuitively. 45 percent of all online shoppers are between 20 and 39 years old. The so-called millennials are keen to shop online particularly often. A further 20 percent of online shoppers fall into the age group 40 and 49.

Cost factor: Product returns

As in every country, German online shoppers have their own preferences, habits and concerns when it comes to online shopping. For example, they tend to use their right to return unwanted goods. In 2019, 53 percent of all online shoppers from Germany returned ordered goods at least once. Compared to other European countries, this is the highest score.

The return rates are particularly high in the fashion industry. Here, about every second item is returned. This entails that not only is a good returns management required, but also that retailers need to find innovative solutions in light of the growing awareness of sustainability.

Payment in Germany

Likewise, retailers need to respond to the preferred payment methods of German online shoppers: Eventhough payment on account is slowly declining – 24 percent of purchases in 2019 compared to 28 percent in 2018 – it is still the most important payment method for the German market. Almost equally popular are payments via e-wallets such as PayPal – a trend that corresponds to the increased use of mobile devices. Another much demanded payment method in Germany is direct debit. Only about 11 percent of all online purchases in Germany, however, are made by credit card.

Market entry in Germany: Identifying potential and overcoming the obstacles

The German market offers excellent prospects for retailers who want to enter the European market: Internet affinity, educational standards and per capita income are high and cross-border shopping rates are constantly rising.

With profound know-how regarding the specifics of the market and a solid strategy, retailers can successfully lift the potential. A cooperation with an experienced service provider such as Hermes International can be useful to smooth the market entry and to successfully position oneself on the German e-commerce market.

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