These days, a world without e-commerce is simply unimaginable. Online shopping has become so simple and such an important part of our lives that it is no longer necessary to leave our homes even for household basics. This goes for many parts of the world, however with e-commerce representing 2.2% of total GDP, there is no doubt that online sales play a large role in Europe.
Besides GDP, e-commerce is linked to 645,000 retail websites in Europe, sends over 3.7 billion parcels each year and creates an estimated 2 million jobs for Europeans.
Europe also has one of the highest turnovers in the world, standing just behind Asia-Pacific and ranking before North America. So who are European consumers and where do they spend their money?
One of the largest e-commerce markets in the world
Europe has an annual turnover of 363.1 billion euros for 816 million inhabitants. Of these, 565 million people use the Internet and 32% of the population are considered as e-shoppers, who consequently spend an average of €1,376 per year.
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Continual growth
Despite being a mature market, Europe continues to go from strength to strength. Of the 3 leading world markets, Europe’s market grew by 110% from 2009 to 2013, which is preceded once again by Asia-Pacific (302%) and followed by North America (71%).
Western Europe dominates the European market
When looking more closely at the European market on its own, we see that Western Europe has the largest market share with 48.8%, followed by Central Europe (25.7%) and Southern Europe (11.1%).
Western Europe’s success is largely thanks to the UK, where e-commerce represents 5.61% of total GDP, which is staggeringly higher than the average 2.2% within the European Union.
Scandinavians: big spenders and bigger Internet users
The UK also appears in the top 5 in terms of average annual spend per e-shopper. Norway comes in first place, followed by the UK, Denmark, Austria and Finland. It is interesting to note the high ranking of Nordic countries for average annual spend, which closely reflects the extremely high level of Internet penetration in this area, mostly exceeding 90%.
European cross-border trade
According to a survey published by Postnord, Europeans generally shop in Europe with the UK, Germany and France being popular to buy from. However the market also extends to other countries with the USA being the most popular country outside of Europe, followed by China and Japan.
The importance of mobile
Desktop is naturally the preferred choice when shopping online, however mobile sales continue to increase in Europe. Mobile penetration (the number of unique users as a percentage of the total population) is the highest in the world with Central and Eastern Europe coming in first place with 151%, followed by Western Europe with 129%. Between 2014 and 2015, online spending on mobile devices increased from 12.5% to 20% in Europe.
This change is estimated to be due to three factors: more trust in mobile devices; more affordable models available on the market; and better usability now that retailers are investing in mobile sites and applications.
Digital advertising spend
The importance of mobile is equally supported by Carat, who recently stated that because of a predicted +50% surge in mobile ad spend and a +21.1% increase in online video in 2015, digital will represent more than a quarter of all advertising spend in 2016 with a market share of 25.9%.
Generally speaking there is no doubt that digital spend is becoming more and more important globally, but also in Europe. Digital ad spend for Western Europe is expected to increase by 7.4% in 2015, however forecasts for Eastern Europe are more significant, where digital ad spend is expected to increase by 13% in 2015, followed by a further 9% in 2016.
Despite this predicted increase in ad spend for Eastern Europe, Western European countries continue to dominate the top 10 in terms of digital ad spending. The UK has by far the largest digital ad spending in 2014 with 12 billion dollars, followed by Germany and France with 6.26 and 3.04 billion dollars respectively.
A market worth investing in
Should it be on mobile, tablet or desktop, there is no doubt that Europe’s economy is on the rise. This is further supported by Retail Research, who claim that the European e-commerce sector is set to grow by 18.4% in 2015. However perhaps more convincing is the European Commission’s inquiry into treating Europe as one single market: breaking down digital barriers which would consequently allow European companies to operate across this diverse region. As part of its 16-point plan, the EC’s reforms would make cross-border commerce in Europe more attractive and simple for merchants meaning that further growth in this region is to be expected in the next few years.
Wherever you should be in the world, consider Europe as a key market and refer to our studies per country for more information on key e-commerce countries in this continent.
This feature originally appeared in Twenga Solutions.
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