Portugal is the most westerly country in Europe. It only borders Spain from the east and north. From the west and south, it is surrounded by the Atlantic Ocean. Portugal also owns two archipelagos, the Azores and Madeira.
Tourism is very important to the country’s economy. Portugal attracts a lot of tourists, which made it easier to get out of the recession. Portuguese GDP in 2019 was US$ 237.69.
In this article, you can find some highlights about Portuguese ecommerce.
Portuguese ecommerce overview
Ecommerce revenue in Portugal is forecasted to reach US$3,449m by the end of this year. In five years, it is projected to hit US$4,650m. There are over 5.1 million users of Portuguese ecommerce. Thus, user penetration in 2020 will reach 50.1%, and in five years – 56.8%.
The most popular ecommerce is Amazon – based at .es domain. Most of the Portuguese people speak Spanish, and Portugal language is similar to it. The second favorite is Zara, with $US 75m of net income. The podium is closed by Apple with a little lower net sales – US$72m.
Fashion is the largest segment in Portugal, and it stands for 34% of the ecommerce revenue in Portugal. The second one is Electronics & Media with 26%, Toys and then Hobby & DIY with 20%. It is following by Furniture & Appliances with 11% of Portuguese ecommerce revenue. The last one is Food & Personal Care with 9%.
Consumer behavior in Portugal
Over time, the Portuguese pay more and more attention to planning their household budget and the impact of consumerism on the environment. Sustainable development and the origin of the product have become one of the determinants of product selection. Portuguese people want to take care of their health and well-being, which is why they often choose natural products and organic food. A large part of them is willing to pay more for natural products. Years of economic recession have meant that consumers in this country are not buying impulsively. The Portuguese are loyal to brands in general, but the situation is different for food brands. In this case, the price decides. Products from outside the country find customers in Portugal, but the food is also an exception in this case.
Prices and promotions are the main purchasing drivers. Despite the relatively high development of ecommerce, shopping in brick-and-mortar stores still has its fans, especially among the older generation. The typical Portuguese consumer appreciates the seller’s knowledge, which influences on attachment to regular trade. Ecommerce in Portugal is people under 30’s cup of tea.
Portuguese consumers like to shop from Spain – the value of their purchases stands at the level of US$ 25.2 billion. Then comes Germany with so much lower purchases’ value – US$9.6 billion. The third-place belongs to France – US$5.55billion. Then comes Italy with US$4.1 billion and the Netherlands with US$4.05.
Payment methods in Portugal
Cards are the favorite payment method of Portuguese consumers. There are
2.66 cards per capita; 1.86 debit card and 0.80 credit card. It is expected that card transactions will be used more and more often, and by 2021 they will reach 44% of the market share.
Open invoice is second in the Portuguese’ hearts – 30% of ecommerce transactions are done this way. However, it is predicted that digital wallets and bank transfers will be the fastest-growing payment methods. Forecasts are for an annual growth rate of 29%, which will give respectively 15% and 10% market share by the end of 2021.
When entering the Portuguese market, Multibanco, closely related to the open invoice, cannot be ignored. This system worked until 1985 – it allows clients to use ATMs to pay invoices and bills. All major banks in Portugal belong to this program. PayPal has also established cooperation with Multibanco, thus enabling the transfer of funds to digital wallets. When it comes to mobile payments –
Google Pay and Apple Pay are now available in Portugal. However, despite this, merchants should mainly rely on the popularity of cards and offer a wide range of payments (including Multibanco-related).
Social media in Portugal
There are more there than 8.5 million Internet users in Portugal, from which 7 million are active in social media. Comparing to 2019, there is a 6.6% increase in social media users.
Portuguese spend over 6 hours surfing on the internet and about 2 hours scrolling down social media.
97% of active social media users accessing it via mobile. The most popular here is YouTube. Then come Facebook and its Messenger. Thanks to Facebook Ads, you can reach even 6 million people, so it is payable to be there as a brand.
Thanks to Instagram, which is placed 5th, you can reach 3.8 million people, and the numbers are increasing quarter by quarter.
Logistics in Portugal has to face some challenges, mainly related to the growing popularity of ecommerce. The importance of freight air transport has decreased in revenue and has remained on a similar train for several years. As for the entire logistics, 3PL is a more and more frequent requirement. It is related to the development of the logistics network. At the same time, the market requires more and more warehouse space.
The most popular delivery providers in Portugal are chronopost, DHL, and UPS. The first one is in an offer of 13% providers, the latest two in 10% of providers’ delivery offer.
To wrap up
Portuguese consumers show some similarities with Spanish consumers, like love for cards or YouTube. But there are also some aspects which are characteristic of the Portuguese market like Multibanco. If you are planning to enter this market, you need to know some basics of it. And we have hope that you have found it in this article.