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Ecommerce in Europe: How Central and Eastern countries are driving growth

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Ecommerce in Europe: How Central and Eastern countries are driving growth

As the UK gears up to leave the European Union in 2018, many are wondering how the UK’s relationship with the Euro ecommerce market will change and how significant an impact their exit will have on the sector as a whole.

Ecommerce Europe’s latest research, European Ecommerce Report 2017 [1], has some fascinating insight into what is driving the overall market and how sellers in growth states are adapting to engage with their domestic consumers and those in their neighboring countries.

There’s a lot UK e-retailers can learn from other European markets, even while their future relations with the EU are uncertain.

Central and Eastern countries are driving growth

Ecommerce Europe reports that while mature markets in the EU are still leading the pack in terms of the proportion of consumers shopping online – with the UK boasting the biggest percentage at 87% – it was Central and Eastern European Markets that saw the biggest growth in e-retail sales during 2016.

Romania has performed best in this regard, growing at 38%. Slovakia and Estonia have both seen growth at 35%, and Ukraine has boasted growth of 31%. There is still room for proliferation among consumers in these markets, however. Romania, for example, sees online shopper penetration currently at just 18%.

Mobile-first markets

Many of these countries are considered mobile-first markets, in that they have seen most of their consumers coming online to shop via mobile devices rather than via desktop.

In Bulgaria, for example, 60% of online traffic is mobile [2], and sellers have had to adapt to this. Board Chairperson of the Bulgarian E-commerce Association Janet Naidenova cites this as a key recommendation to retailers in the country: “Quality content, quick, easy and mobile-first”.

Evolving delivery options

Payment and delivery options are arguably differentiating the emerging EU ecommerce markets from the mature ones.

In Romania and Ukraine, cash on delivery is the preferred method of paying for goods online. A massive 88% of consumers prefer this in Romania. Often, if consumers know they will receive their goods before they need to pay, they are more likely to place an order.

There is also a trend among these states for consumers to receive their parcels at designated delivery terminals. 95% of consumers in Estonia prefer this method, perhaps because of its reduced price (for both customer and seller) and as it improves the chance of seamless fulfilment.

Cross-border fluidity

Where Central and Eastern European markets are perhaps most intriguing is how they interact with each other. This is pertinent to the current debate in the UK about remaining a member of the Single Market after withdrawing from the EU.

During 2016, 33% of European online shoppers purchased abroad. Many e-retailers who are winning on mainland Europe are keen to offer a variety of languages (alongside payment methods and delivery options) in order to appeal to shoppers in neighboring markets who can then make the most of tariff-free cross-border deliveries.

Interestingly, Luxembourg, Russia and Switzerland are the most voracious cross-border buyers [3] – three markets with their own respective relationships to the EU and Single Market: Luxembourg being a full member, Switzerland being outside of the EU but a member of the Single Market and Russia being outside of both.

What can e-retailers take from this?

Those with an interest in broader trends in European ecommerce will be happy to see overall growth continuing, and for the smaller markets, increasing their share of the overall consumer base. Central and Eastern countries boast the best growth rates, but many – such as Romania – have sizeable room for growth and are yet to do much of their shopping cross-border.

While Brexit poses some barriers for UK e-retailers to strengthen engagement with consumers in these emerging markets, there are already precedents (Russia and Switzerland) as to how sellers can ensure their products are available and consumers are engaged with them.

Multi-lingual sites which are agile and mobile-friendly [4] are key recommendations for marketers looking to achieve best practice. Cost-effective delivery options and payment methods which engender trust are other standout trends among e-retailers helping boost the growth markets on the continent.

Even within the next two years we can expect Central and Eastern European markets to see increasing growth and market share, meaning there’s little to be gained from waiting until after Brexit for e-retailers to consider the value of Europe’s straight-to-mobile shoppers.

Related reading

References

  1. ^ European Ecommerce Report 2017 (www.ecommerce-europe.eu)
  2. ^ 60% of online traffic is mobile (www.ecommerce-europe.eu)
  3. ^ cross-border buyers (www.paymenteye.com)
  4. ^ mobile-friendly (www.clickz.com)
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