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The pace of digitization in Europe the last few years has been quite staggering. Eurostat statistics show growth in essentially all areas, from video streaming and social media to banking and – naturally – e-commerce. Within four years, 45 million new e-consumers have been added in the twelve countries surveyed by the PostNord/Direct Link report “E-commerce in Europe”, and today the total number is 286 million online shoppers.

And it is certainly not only domestic e-commerce that has grown. The number of consumers that make online purchases from abroad has exploded in Europe over the past four years, from 159 to 217 million people – an increase of 58 million.

Considering the EU initiatives to achieve a common European e-commerce market and to eliminate obstacles to trade, it is likely that this growth will continue and that borders between countries within the European Union will have declining significance for e-commerce.

Total e-commerce in the surveyed countries is EUR 235 billion annually. Germany is still the largest market closely followed by the UK. However, the southern European markets have seen strong growth the last few years and are now taking an ever-increasing share of the total e-commerce cake.

The new 2019 report can be ordered free of charge.

Olof Källgren, Market Information Manager, Direct Link

PostNord/Direct Link has been producing “E-commerce in Europe” reports since 2014. Over the years, we have been able to see how e-commerce has developed in a number of areas, ranging from consumer demand for deliveries and returns, to how e-commerce moved to the mobile phone.

chart showing countries and how consumers there look for lower prices and wide selection of products

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There are many reasons for consumers to shop online from foreign markets. The most common are a large selection of products, being able to find unique items, lower prices, or quite simply pure curiosity. Yet overall, the strongest driving force for shopping from abroad is the chance to find lower prices. Since most major brands now sell their products globally, many items are standardized and this allows for easy price comparisons. When shoppers realize that price levels differ between countries, they are inclined to shop where the lowest prices can be found.

Delivery times usually do not pose an obstacle as they tend to be quite short within Europe, even across borders. Interestingly, low prices appear to be an important factor regardless of how mature and developed the e-commerce market is in a country. For example, in both well-developed UK and fast-growing Poland, low prices are essentially equally important to shoppers. However, when it comes to product selection the situation is different. In larger markets with a highly developed e-commerce sector, such as France, Germany, and the UK, a large selection of products does not earn particularly high ratings – consumers take this more or less for granted.

In contrast, a large product selection is highly rated in Italy, Norway, Poland and Sweden. Even though e-commerce is well-developed in Norway and Sweden, these countries are small and thus the product range is perceived as small. At the same time, Italy and Poland are large markets but here e-commerce has not come as far as in France, Germany or the UK, which also limits the range of products.

PostNord/Direct Link has conducted studies of the European e-commerce market since 2014, presenting its findings every year in the report “E-commerce in Europe”. The reports are based on interviews with consumers in Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Poland, Spain, Sweden, and the United Kingdom.

In a series of blog posts, we will take a closer look at the individual e-commerce markets in this year’s “E-commerce in Europe 2019”.

The new 2019 report can be ordered free of charge.

Olof Källgren, Market Information Manager, Direct Link

PostNord has been producing the “E-commerce in Europe” report since 2014. Over the years, we have been able to see how e-commerce has developed in a number of areas, ranging from consumer demand for deliveries and returns, to how e-commerce moved to the mobile phone.

E-commerce in Europe report 2019 excerptThis year’s report, based on interviews with more than 11 000 consumers from 12 different European markets, showed that around 286 million consumers in the surveyed markets bought products online during the past year. The total spending in these countries is estimated to approximately EUR 235 billion. Most money is spent in the three largest European e-commerce markets Germany, France and the UK. UK online consumers have the highest average spending per capita, followed by consumers in Germany and in the Nordic region. It is also interesting to note that markets like Italy and Spain, who historically have been lagging somewhat behind, are now starting to catch up to the more developed markets in Europe.

The various markets in the study do have many similarities, but certainly also differences that e-tailers have to consider when launching in a new European country. For example, there are differences when it comes to preferences for payment alternatives and delivery options.

The findings in the report also make it clear that more and more European consumers are buying online from foreign markets. Being able to find lower prices is one of the strongest drivers for purchases from abroad. Quite a number of consumers also state that they are looking for specific products or brands that are difficult to get hold of in their own countries.

To learn more about the vibrant European e-commerce scene, order your free copy of the 2019 e-commerce report.

Olof Källgren, Market Information Manager, Direct Link

Shopping at e-commerce marketplaces has increased significantly in Europe in recent years. The likes of Amazon, Wish, eBay, and others have seen a growing number of European customers. It’s interesting to note that international marketplaces are common in large countries but less so in smaller ones. The main example of this is Amazon, which has deliberately focused on the largest markets in Europe. Yet shopping at marketplaces will probably increase in smaller countries as well over the next few years. Most likely, the major market players will expand here, or perhaps a domestic participant will succeed in positioning itself before the giants barge in.

diagram shopping at international marketplacesIn those countries with a high usage of marketplaces, one clear effect is the growth in consumer purchasing frequency. In countries where more people shop online from marketplaces, the number of those also shopping online every week is higher as well. This development is probably due to the fact that it is convenient to shop in marketplaces, and that they also often offer attractive member benefits.

A well-known membership service is Amazon Prime, which provides access to Amazon’s streaming service, discount coupons, and most importantly – free shipping with every order, and this drives sales sharply upwards. Prime customers have been known to shop for more than twice as much as ordinary Amazon customers, and the difference appears to increase each year.

Yet international marketplaces also seem to have different strategies when it comes to Europe. This becomes especially clear when comparing for example Amazon, based in the US, and Wish, which is based in China. Amazon is very strong in a few markets, while Wish instead has smaller market shares in many countries. Loyalty to Amazon is extremely high in the countries where the company is established. Germany, France, Italy, Spain, and the UK are all examples of this phenomenon. In contrast, customers in neighboring countries do not appear to be particularly inclined to shop from Amazon – the giant loses its grip on customers as soon as the product has to cross a border. This means that Amazon has a few strong footholds in Europe, but without much reach. Wish, on the other hand, pursues the opposite strategy. Wish is relatively popular in many countries, but does not have a really strong position in any. In Europe, Norwegians and Swedes are the ones who shop most from Wish.

More information on consumers’ usage of marketplaces throughout Europe will be available in a forthcoming PostNord e-commerce report.

Source: PostNord

Oftentimes, when looking for new trends, many people tend to look to the west. However, when it comes to e-commerce, one should definitely look eastwards.

– When people ask me why I live in China, I usually turn it around and ask why they have not come here yet, says Filippa Bätjer, a Sweden-born digital marketing specialist now residing in China.

When it comes to everything digital, including marketing, China is many years ahead of the West. There are several reasons for this. Partly, it’s the economic super-growth that created an affluent middle class in China in just one generation, and partly it’s because this coincided with smartphones becoming popular. When all these millions of people wanted to buy gadgets and status, there was no retail market that could sell these to them, neither in physical stores nor online. Instead, creative tech startups were the ones that saw the opportunities with new technologies. This has resulted in China leapfrogging laptops and web shops. “In China no one uses a computer, but people of all ages use smartphones for everything”, says Filippa Bätjer.

Customer uses his smartphone to scan QR code on the parcel from online shopping“Chinese consumers are not passive recipients of advertising, but instead, ad content here is much more engaging and entertaining. WeChat, also called “China’s app for everything”, really is used for everything and is the primary channel for all e-commerce and marketing today, along with the other major social platforms. Live streaming is very popular, as are QR codes that form the basis of many campaigns and help to tie together the physical and digital world.

This new technology, new behaviors, and new ways of communicating with target groups in China will soon also spread to western countries. Thus, if you want to be successful there in the future, you should observe and learn from what is happening in China today.

Filippa Bätjer has three tips for how to get insight from China:

  1. Turn towards China. Realize that the future has already arrived there. Make a habit of looking east for new trends.
  2. Get to know China. Learn more about how Chinese digital platforms work and what the Chinese consumer mindset is all about. Behavior and culture are key to understanding Chinese retail and marketing.
  3. Go to China. Many people wanting to sell in China or take advantage of the opportunities here have never been in the country. They barely know how Chinese marketing works, and for example how popular QR codes and livestreams are.

Thus, it’s important to get involved, do your homework and then it will be easier to sell to Chinese consumers and be well prepared when these trends are embraced also by the western world.

Malin Herzig, Business Development, Direct Link

Source: DM Magasinet (in Swedish, pdf)