The findings of the 2019 European E-commerce Report published in late August were very positive, with growth in online sales of more than 13% and estimated total sales of 621 billion euros. Although Western Europe accounts for 66% of the market, all of the countries offer real potential for development. The main challenges to be overcome, as confirmed by the survey, were consumer confidence in the logistical aspects, namely order tracking, delivery and managing returns, in addition to secure payments. Another key finding from the report is that consumers aged over 65 years old are now the 2nd largest segment of online shoppers.
Although the European market offers a potential of more than 500 million customers, the survey reveals a wide disparity between the different regions in terms of behavior and economic situations. The most striking variations concern the average annual amount spent online per buyer. Although this totals €2,046 in northern Europe, it stands at just €276 in the Eastern European countries. These values should be correlated with an Internet penetration rate varying from 99% in Iceland to 64% in Ukraine. However, the conditions for accessing online services are not the main obstacle to the expansion of e-commerce. For the countries lagging far behind such as Romania, Serbia or Italy, the chief obstacles are transaction security and delivery conditions. These criteria can vary significantly even within the same region. As an example, in Western Europe, although 80% of French consumers use their credit card and prefer home deliveries or delivery to a drop-off point, in Germany more than 50% of buyers pay for their purchases with PayPal and the preferred delivery method is via Deutsche Post DHL. These differences represent significant opportunities for online vendors, who can develop interfaces adapted to each target country with access to all of the payment methods commonly used in Europe and the local delivery services.
European e-commerce: sustained growth
Europe's population is still growing, with 798.4 million inhabitants in 2019, representing a potential of more than 500 million buyers. In 2019, Europe's GDP is around 20 trillion. More precisely, the annual GDP per inhabitant exceeds €39,000 in Western Europe, rising to 44,000 euros in the northern European countries. The portion accounted for by e-GDP is respectively 4.11% and 3.58%.
After a slight slowdown in 2018, growth in European e-commerce is estimated at 13.6% this year for sales of 621 billion euros. Western Europe, which includes Germany, Belgium, France, Ireland, Luxembourg, the Netherlands and the United Kingdom accounts for 66% of the market. In France, the growth in online sales should be around 17%, with total sales of more than 104 billion euros.
For its part, the European average annual amount spent online per buyer is also estimated to be rising, totaling €1,464 in 2019, i.e. a 30% increase since 2015. The cart value nevertheless varies a great deal according to the regions, with values in the northern European countries sometimes being the double of those seen in southern Europe.
A European e-commerce market which is still promising
The average Internet penetration rate is estimated at 82% in 2019 but with significant variations between the regions: 93% for the Northern European countries, 71% for Eastern Europe. The penetration rate stands at 92.3% for Western Europe, with 89% for France.
For its part, the percentage of online buyers reveals even more striking variations, ranging from 88 to 22%. With 87%, the United Kingdom is just behind Switzerland (88%), while Germany (82%) is ahead of France (76%) and Spain (62%). Some countries have not yet exceeded the 50% mark, including Italy (47%) or Portugal (49%) but above all the Eastern European countries, with Ukraine in last place with just 22% of e-shoppers.
The study also reveals that over 65s are now the 2nd largest segment of online shoppers, accounting for 17.08%, behind the 25-54-year-olds (42.23%) and ahead of the 55-64-year-olds (12.92%). A trend similar to that already seen in the United States, where the boomers (55-75-year-olds) account for 34% of e-commerce.
The silver economy, linked to Europe's ageing population, is having an impact on all sectors including leisure, transport, food, safety and security, health, the home, collective living, insurance, telephone assistance, the Internet and sport, etc. These markets must adapt their ranges of products and services to attract a new clientele with significant purchasing power, keen to improve their daily lives and to guarantee their health and wellness.
Secure payments and deliveries: the leading growth drivers for e-commerce?
The number of consumers still reluctant to buy online also varies according to the region. Standing at around 10 and 20% in western and northern Europe, it is much higher in the southern European countries. 29% of Spanish consumers and 34% of Italians prefer to see or touch the product before buying it and remain loyal to their favorite stores.
However, the main barriers to online purchasing are still the issues of payment and logistics, particularly in Portugal, Turkey, Hungary and Spain. Delivery times and conditions or the way returns are handled if customers are not satisfied are also among the key concerns expressed by European consumers.
To meet these challenges, online vendors must be very attentive to the standard customs and practices applicable in each country. Although most European consumers prefer home delivery, the use of drop-off points nevertheless dominates in Norway and the Ukraine, while their use rivals that of home deliveries in France.
Where transactions are concerned, the survey reveals a real disparity concerning the payment methods used by European consumers. Although credit cards are the main means of payment used in France, Ireland and Denmark, accounting for almost 80% of transactions, this is not the case elsewhere: just 22% in the Netherlands, 46% in Belgium and only 12% in Germany. Some European consumers prefer solutions such as PayPal or bank transfers. Mobile payments achieve the highest scores in northern Europe, with 51% in Lithuania or 48% in Estonia, while cash payments on delivery are still used in Eastern Europe.
The e-commerce report shows that e-commerce is continuing to thrive in all European Union countries. This growth is bringing about changes in purchasing habits just like in other major world regions such as North America or Asia. With this in mind, European online vendors will need to be attentive to technological developments such as voice search, the social networks and m-commerce. Mobile commerce should account for almost half of online sales in two years' time.