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European Ecommerce Overview: the Czech Republic

The Czech Republic, together with Slovakia, formed Czechoslovakia until 1993. They are now an independent country that is doing relatively well on the international stage. The Czech Republic borders Poland, Slovakia, Germany, and Austria. This country has been a member of the EU since 2004, and the Schengen Area since 2007.

The Czech Republic’s GDP was US$246.49 billion, and the country’s population is growing, which may be the result of increasing economic confidence. 

In this article, we will cover the ecommerce situation in Czechia. To find out more, keep reading. 

Czech ecommerce overview

Ecommerce in the Czech Republic is doing quite well. It is predicted that by the end of 2020, its revenue will hit US$3,812 billion, and in five years – US$4,513 billion. There are nearly 6 million Czechs who are doing shopping online. This means that user penetration in this market is 54% in 2020 and is predicted to reach 65.1% by 2025. 

All top ecommerce sites are based in the Czech domain. Alza, a marketplace which runs the market in Slovakia too, reach net sales at the level of US$796m last year. Then comes Mall, which is also the Slovaks second favorite. Its net sales were much lower – US$ 280m. The third-place belongs to czc.cz – electronic appliance store.

source: https://ecommercedb.com/en/markets/cz/all

Which is the most significant sector in Czech ecommerce? Fashion, which accounts for 29% of the Czech ecommerce revenue. Then Electronics & Media with 28% and Toys, Hobby & DIY with 23% of ecommerce revenue. The last Furniture & Appliances with 12% and Food & Personal Care with 8% of ecommerce revenue of this country.

Customer behavior in the Czech Republic

Czech consumers are sensitive to two aspects – price and quality. And although the price is usually a determinant of quality, the Czechs still prefer cheaper solutions. Local brands are attracting more and more attention, as is the case with ecological and healthy products. When it comes to ecommerce, it is a very popular solution that facilitates cross border shopping. It is how the Czechs look for cheaper alternatives – on foreign markets.

source: https://learning.eshopworld.com/ecommerce-blog/czech-republic-ecommerce-insights-2017/

Speaking of cross-border shopping. The biggest player here is Germany – over US$42 billion was generated via shopping from this country. Then comes Poland with US$12.7 billion and Slovakia with US$9.2 billion. The last two are China with US$ 8.06 billion and the Netherlands with US$7.32 billion. 

Payments in the Czech Republic

Cash on delivery is still a fairly common solution – 45% of ecommerce related transactions are made this way. Bank transfers cover almost 30% of transactions. However, this method is expected to take over the payments market by 2021. The Czech Republic belongs to SEPA, which means that international transfers to EU member states should not be a problem.

source: https://www.jpmorgan.com/europe/merchant-services/insights/reports/czech-republic

As for digital wallets, they are not very popular in the Czech Republic (only 7%), but it is assumed that this method will slowly grow thanks to technological development and the greater use of smartphones. Both Apple Pay and Google Pay are available in this country. 

Internet fraud is not a common issue in the Czech Republic. Most likely, this is due to the fact that a significant proportion of purchases are paid on delivery. The main area where fraud occurs is card theft, but with the development of technology and security systems, the rates decrease.

Czech social media

About 87% of Czechs are online. From more than 9 million Internet users, 5.70 million use social media actively. Compared to the previous year, there is about a 7% increase in social media users’ number.  There is also an increase in web traffic generated by mobile devices. On the other hand, less traffic is generated by desktops and laptops. 

source: https://datareportal.com/reports/digital-2020-czech-republic

The most popular social media platform across Czechs is Facebook – thanks to ads here, you can get to almost 5 million people. Then comes Instagram, with 2.40 million users of ads reach. The lowest score, in this case, has Twitter – only 586.5 thousand users. 

source: https://datareportal.com/reports/digital-2020-czech-republic

Similar to the neighbors – Slovaks, Czechs prefer Android devices over iOS. The first ones generate about 79% of web traffic, and the others – 20%. 

Logistics in the Czech Republic

The Czech Republic has no access to the sea; therefore, sea transport is not essential in this country. It is mainly based on rivers, which does not offer great transport possibilities. The road railways take the lead. The Czech Republic is located at the heart of Europe and therefore plays a key role in European transport. Thus, the infrastructure and its quality are at a very high level. Moving around the Czech Republic is relatively easy due to the quite extensive infrastructure, but due to legal restrictions, drivers are not able to reach high speeds without the risk of an equally high fine. 

There are five airports in the Czech Republic that are used mainly to transport of passengers and smaller products. These are Václav Havel Airport Prague, Brno Airport, Ostrava Airport, Karlovy Vary International Airport, and Pardubice Airport

To sum up

Consumers from the Czech Republic are quite similar to Slovaks, but there are also some differences like preferable payment way. Ecommerce in this country is a well-known shopping way, but there is still room for new companies. 

If you are interested in getting to know Slovaks ecommerce habits too, you can find some information about it here.