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E-commerce in Europe – a market overview

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E-Commerce in Europe Market Overiew Europe

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Two-digit growth rates and no ending in sight – e-commerce sales in Europe have almost doubled in the past five years. This year, the 600 billion euro mark is expected to be cracked for the first time. Therefore, we want to give you an overview of the European market. In which countries are the cross-border rates particularly high? Which products are strongly demanded?

These and related questions are answered in part one of our two-part series E-Commerce in Europe. Part two of the series – entitled “Marketplaces for Your Success” – can be found here.

European e-commerce market is growing

Five years ago, the European e-commerce market was worth 307 billion euros. However, last year it grew by 11 percent up to 543 billion euros. For the current year, the Ecommerce Foundation predicts a trade growth of 13 percent to a total of 602 billion euros (about 696 billion US dollars). The purchasing power of Europeans is unbroken and, thanks to the demand of international brands and goods, also an interesting market for globally active traders.

Potential not yet lifted

Western Europe currently accounts for the largest share of pan-European e-commerce sales. The countries with the highest purchasing power are Great Britain (178 billion euros) followed by Germany and France (both around 93 billion euros). The three countries generated approximately two-thirds of total sales.
In Southern and Northern Europe consumers are currently less financially solvent and also in Eastern Europe retailers can only dream of the sales figures of Western European countries. However, the economic upturn in the Eastern European states has led to enormous growth rates in recent years. In Romania, for example, e-commerce sales grew by a full 37 percent last year, and by 31 percent in the Ukraine. The capability of these countries is enormous – the purchasing power is rising steadily and the potential has certainly not been lifted yet.

Cross-border e-commerce in Europe

Europeans make online purchases far beyond their own borders. Macedonians and the Portuguese lead the list of cross-border purchases: they buy 85 percent of their goods from abroad. Turkey brings up the rear, as the share of foreign purchases amounts only up to two percent. On average, 30 percent of European online purchases are executed cross-border. Further, one in four online shoppers purchased from outside the EU or in unknown countries of origin last year.
Overall, the number of cross-border purchases is increasing: Last year Slovenia topped the list with a cross-border growth rate of six percent. Luxembourg, the Netherlands, Germany and Finland followed in second place with an annual growth of five percent.

Top sellers: clothing, electronics and computers

Clothing, electronics and communications products as well as computers and their accessories such as games, apps, etc. are highly demanded in Europe. Products from these categories already account for around 50 percent of European e-commerce sales. In addition, travel, footwear as well as household goods and home & living items are also successful segments.
For the German market alone, Statista is expecting growth rates of between 31 and 61 percent in these segments by 2022 – a decline is not in sight.

British are world champions in e-commerce spending per capita

Eight in ten UK internet users shop on the world wide web. The British are therefore considered to be world champions when it comes to online shopping: Last year, the per capita turnover of British online shoppers amounted to 1,639 euros. The British forged ahead of the US (1,588 euros) worldwide as the number one online shopping nation. Popular marketplaces for cross-border e-commerce in the UK are eBay and Amazon. Together with the Tesco retail chain, they generate the majority of e-commerce sales amounting to 178 billion euros. More than one third of onlines purchases are made by the British when abroad (36 percent). The tendency is rising: In 2017, the share of purchases made abroad increased by three percent.

E-commerce in Germany

In the past twelve months, eight out of ten Germans aged 14 and older have shopped online. Five percent of those online shoppers are purchasing something from the web every day. Last year, their annual per capita e-commerce sales amounted to 1,134 euros. The vast majority of Germans prefer to buy books, consumer electronics- and telecommunications products, computers as well as accessories and vouchers online, rather than going to a local store. Further, toys and clothing items such as shoes are preferred by four out of ten consumers as either online purchases or catalog selling. A quarter of their online purchases are made by the Germans as cross-border transactions (25 percent). Their growth rate increased by five percent last year. By far the most important marketplace in Germany is Amazon.

Fashion first in France

Out of the three major players in European e-commerce, France is considered to be the smallest: The average e-commerce revenue per capita last year amounted to 941 euros – and thus 650 euros less than the amount spent per capita by the British. Nevertheless, 28 percent of French online purchases were made as cross-border transactions.
48.9 million French citizens are currently using e-commerce. Yet, this number is expected to rise up to 51.4 million by 2022. The largest market segment with a forecast volume of 14.2 billion euros in 2018 is the fashion industry. Furthermore, even once less favored product groups, such as food or home improvement items, were able to register strong gains in the recent past. For example, home and garden purchases have lately increased by 25 percent up to nearly three billion euros.
The main platforms in France are Amazon and Cdiscount. Cdiscount has positioned itself as a discount online retailer, offering items from nearly all categories in addition to its core business in home appliances, technology and food segments. Cdiscount is considered “Amazon France”.

The strong demand, the economic growth and the resulting purchasing power of the Europeans offer enormous potential for international traders.

The second part of our E-Commerce in Europe series is titled “Marketplaces for Your Success”. Here we explain how to leverage the above-named potential and what marketplaces make it possible to successfully enter the European market.
Part two of our series E-Commerce in Europe entitled “Marketplaces for Your Success” can be found here.

Sources:
European E-Commerce Report 2018 which can be downloaded here free of charge, Statista Digital Market Outlook, Bundesverbandes E-Commerce und Versandhandel Deutschland e.V. (bevh), Asendia.

 

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