E-commerce had played an extraordinary role in society unlike ever before, providing consumers with safe access to goods when people’s health was severely restricted. As a result, sales have increased significantly, but tourism and events have suffered due to the lockdown. With a turnover growth rate of 10%, e-commerce in Europe still grew significantly, but with a slight decrease from last year’s 14%. Nevertheless, forecasts indicate that growth will continue to rise in 2021, with an expected growth rate of 12%.
Our societies and economies have undergone many changes in the last year. To adapt to the rapidly changing commercial landscape, businesses needed to accelerate their digital transformation. Previously, only offline sales channels were used by companies; now, they are developing a digital presence as well.
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Throughout Europe, e-commerce use is on the rise as the number and share of e-shoppers increases every year. However, the most significant jump in e-shoppers can be seen in 2020, partly due to the Covid-19 pandemic pushing consumers to online shopping.
As with previous years, in 2020, Western Europe boasts the highest share of total European e-commerce turnover for 2020 with 64%. Following far behind, Southern Europe holds 16% of total turnover. However, in terms of growth, Eastern Europe shined in 2020 with a rate of 36%, while Western Europe’s growth rate remained moderate at 4%. Central and Southern Europe saw similar growth rates in 2020, 28% and 24%, respectively. Eastern Europe’s lag likely compared to other European regions in B2C e-commerce turnover is due to low e-shopper penetration (41%), which is less than half of Western Europe’s e-shopper penetration (86%)
For consumers in Belgium, sustainability is increasing on their priority list. A consumer survey revealed that 48% believe sustainability is an essential element determining whether a webshop is good or unsatisfying. Usually, French consumers buy online for practical reasons, namely that consumers have more choice and diversity of products. However, during Covid-19, it was for safety reasons and health protection. On the other hand, e-commerce in Germany has consistently increased by about 10 % per year. During the Covid-19 crisis, online shopping was the most significant growth in categories like grocery and pharmacy. Although people know they can go and get food and drugs in stationery shops, they still prefer to do so online first. Ireland’s product categories that performed well were health and fitness, particularly gym equipment.
Additionally, consumer electronics and tech were massive. In the Netherlands, the e-commerce sector has a solemn responsibility to work on sustainability and they see this high on the agenda of many of their members. Therefore, they are working towards online delivery with 50% less CO2 impact in 2025.
Travels’ share of total sales fell from 27% in 2019 to 12% in 2020 in Denmark and leisure/tickets for sports, cinema and amusement dropped from 5% to 3% DIY and furniture grew. In Estonia, at least 1,000+ e-shops were started; studies have shown that only 50% of companies have e-channels. There were government initiatives, investments and subsidies to help companies get online. However, the infrastructure of grocery delivery struggled, as they were not fully prepared, even with click-and-collect in Finland. Keeping items cold was rugged, and despite having some cold lockers, supermarkets in highly populated areas could only get your order a week from the day you made the order.
There was a two-fold decline in online store users in Iceland, Latvia, and Lithuania. Almost 80% of Norwegian retail chains are now online stores, which has increased from 70% last year. This shows the ability for solution-oriented innovation, not just among larger chains but also smaller stores. Strong growth in e-commerce, sales increased by 40% last year in Sweden. The most substantial change was in groceries (95%), furniture and home furnishings (63%) and pharmacy products (59%).
Covid gave online shopping quite a boost in 2020 in Austria. Last year they had sales increase 17% in domestic e-commerce, and marketplaces have grown over 32%. In Czechia, in the beginning, fashion was hit hard, but during the year, fashion rose again and is now back to normal. Most online shops have grown, and the most successful categories were groceries and pharmacy/hygiene purchases. The number of Hungarian online shoppers did not increase dramatically (+80,000/+2.3% new shoppers), however shopping frequency (18%) and basket value (20%) increased significantly in 2020 compared to previous years’ growth.
The importance of searching for opinions about a product in the purchasing process has increased in Poland. During the last purchase, this activity was performed by as many as 38% of respondents, and 27% compared the offers. In the Slovak Republic, GDP increased slightly, also in Slovenia. Switzerland noticed a change in payment behavior, with many more credit card payments being used. Switzerland was around 70% invoice, but they have seen a move towards paying via credit cards and PayPal.
During the lockdown in Bulgaria, there was a decrease in sales in clothing, shoes, car parts, travel, hotel reservations, tourist packages, air tickets, tickets for sports events and concerts. Online stores saw a decline of 70-80% of these categories. Compared to their sales before the pandemic. In Croatia, cash-on-delivery is still a strong preference among consumers and consists of over 50% of online purchases. Consumers want to buy with credit cards, but retailers and webshops experience 50-80% of online orders as cash-on-delivery. The number of e-shoppers in Moldovia and Albania is lower. Grocery shopping online was minimal in North Macedonia but has grown and it is expected that people will continue using online supermarkets to have groceries delivered at home. GDP in Ukraine increased slightly. Russia has 10 million new customers who had never made an online purchase before, and 57 million employees began working remotely.
Additionally, the pandemic increased the frequency of online purchases and reduced in-store customers. There are some restrictions in Russia, and overall, they have reduced their offline shopping. Grocery shopping online in Serbia was found predominantly within the bigger cities, and these stores grew, but interestingly, only 2% of grocery market sales are online. They had logistics and capacity problems, but many had their own delivery and quickly rose to the challenge.
In terms of getting shops online, the Greece government gave EUR 5,000 to small companies to digitize and get online. Through these initiatives, they are expecting to see at least a 30% increase in the number of e-shops, and they knew in 2021, they will have more SMEs in the online environment. On the other hand, the travel sector has decreased substantially in Italy. They had 57% fewer sales for travel services, so the travel industry was without any doubt the worst-hit industry in 2020. FMCG and the food industry were the best performers in terms of growth, as they had a 70% growth in sales of food and grocery products. In Cyprus and Spain, there are fewer online shoppers.
Malta had already noticed more retailers going online before Covid, but it accelerated even more during COVID. The latest MCA survey reveals that the number of businesses (including microenterprises) selling via a website or marketplace has almost doubled from 4 years ago. Spanish SMEs account for 99% of the total companies and 78% of full employment in the country, but the vast majority of them lack the economic and human capital to take the next step.
There were many changes. Some good, some bad. Retail and wholesale, especially non-food, were hit particularly hard by restrictions imposed during the pandemic. Providers of daily essentials and retailers supporting the “home nesting” economy and homework reported vigorous activity in areas such as home improvement, gardening, and electronics. Wholesalers serving the hospitality sector and retailers and wholesalers in other segments, such as clothing, shoes and accessories, have experienced dramatic falls in sales. Investments in digitalization accelerated, with digitalization plans initially planned over several years being implemented in a matter of months. What will the future look like? Time will tell.