The Coronavirus has created many problems for businesses and its effects on the economy will be felt for years to come. However, one of the few positive effects it has had on the market is in the e-commerce sector. European e-commerce is expected to be worth around 717 billion euros by the end of 2020, which would represent an increase of 12.7%. Moreover, with more and more businesses shifting their business strategy towards a more digitally-focussed model, it seems that this growth is only going to accelerate over the next few years. This article takes a look at the recent trends in e-commerce, and outlines some ways in which you can adapt your business to be prepared for the post-covid economy.
Consumer Habits Changed Forever
Due to people being forced to stay in their homes for long periods and fear of infection in busy shops, 2020 saw the majority of us rely predominantly on online shopping and courier service to obtain products.
Salesforce Inc. found in a global study that 63% of consumers have “transformed” the way they obtain goods and services in 2020. Furthermore, 58% of consumers said they expected to do more online shopping after the pandemic and 80% of business buyers expect to do more business purchasing online.
This shift is felt most keenly in Western Europe, the most developed e-commerce market in Europe. Western Europe accounts for 70% of the total e-commerce value in Europe and subsequently has the highest share of online consumers at 83%. Businesses in this part of the world would suffer greatly from not investing in their logistics and online presence in order to strengthen their e-commerce appeal.
Not every industry felt the benefit of Covid’s effect on e-commerce. The luggage and travel industry suffered somewhat for obvious reasons, whereas items such as medical and cleaning products had a huge rise.
Still, industries in the sectors that have not performed so well is likely due to restrictions caused by lockdown. It is still likely that these industries will feel a digital boost once the pandemic is over.
Coinciding With The Growth Of Online Payment Options
The increase in online shopping has also seen a rise in our use of online payment options, such as Paypal. Data from AirNow has shown that the UK uses Paypal more than any other European country, with over 330,000 daily users. Germany and France make up the rest of the top 3, with over 312,000 and 96,000 daily users respectively. These standings make sense when one considers the fact that these 3 countries are the 3 biggest e-commerce markets in Europe.
One of the main reasons for Paypal’s success over competing methods is the fact that it is open for payments across borders. Traders who conduct a lot of overseas business would do well to keep this in mind.
Klarna is another online payment option that has seen increased popularity due to the pandemic. As more and more of us flocked online to do our shopping, retailers reacted by investing in the digital market to comply with the increased demand by offering easier payment methods.
The Netherlands One Of The Countries Who Are Capitalising On The New E-commerce Opportunities
This year, the top 250 e-commerce companies in the Netherlands have generated revenues worth 14.4 billion euros in revenue. That’s an increase of 20% from last year.
The country is clearly attempting to attract a wider International market, as is evidenced by companies such as De Bijenkorf expanding. Earlier this week the company announced plans to launch an e-commerce site in France, after already doing so in Belgium and Germany.
It is interesting that Dutch consumers have shown a clear preference to buy from domestic e-commerce stores. Reports have shown that 95% of Dutch consumers prefer to shop at domestic e-commerce site, a trend that is also seen in Poland (94%).
Whilst the Netherlands have clearly taken steps in an attempt to address this with the launch of their new Trustmark, Shopping Secure, traders looking to expand to other countries need to consider statistics like these when considering which markets to expand into. For example, in Russia consumers are far less like to pay with digital payment methods, and usually pay at the door when they receive a product from online. Business owners should make sure their e-commerce is adapted to each individual country.
Conclusion – Should You Shift Your Business Online?
Arguably, statistics suggest that the industry you’re in is a big factor to consider when deliberating on whether or not you should be adapting your selling methods. However, there is a clear shift toward e-commerce in every country and major business, and it is expected that the repercussions from the pandemic will be felt even more over the next decade.
As can be seen in the UK, huge retailers such as Marks & Spencer and Sainsbury’s have already announced plans this week to invest more in their e-commerce. Thus, it is possibly wise to follow the industry leaders who are clearly showing a shift towards e-commerce, as in uncertain times those who are forward thinking and look ahead are usually rewarded.
In what ways has your business been affected by the Coronavirus? Let us know in the comments section below, or by sharing this article on social media!
If you are a business who participates in cross border e-commerce, we would be more than happy to help you register for VAT, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping small businesses is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to firstname.lastname@example.org.