March 19, 2012, 10:06 AM

E-commerce soars in Italy despite economic crisis

Analysts estimate that e-retail increased 20% and m-commerce jumped 210% last year.

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After years of lagging behind thriving e-retail economies in Western Europe, Italy’s online commerce is going full steam ahead, according to leading industry associations and commentators.

Italian e-commerce consortium Netcomm says online retail resisted Italy’s economic sluggishness in 2011, to record a 20% hike in online retail and a 210% growth in mobile commerce.

“In a stagnant economic scenario, the e-commerce market in 2011 had a value in excess of 8 billion euros (US$10.5 billion),” says Netcomm president Roberto Liscia.

“The Italian e-commerce market is still atypical, with service sales surpassing product sales,” the report says, “but the gap closed last year with 14% and 29% rises respectively in the sale of services and products.” Services include travel, insurance and reloading prepaid mobile phones.

“For the third consecutive year, online sales of products are growing at a rate greater than the sale of services,” concludes a report on business-to-consumer e-commerce in Italy in 2011 by Milan’s MIP School of Management in conjunction with  Netcomm.

The report says sales in four main product sectors grew an average 30%:

• Clothing

• Computers and consumer electronics

• Publishing, music and audiovisual

• Groceries, including food and health care products purchased from supermarkets online

Liscia attributes the performance to the growth in Internet users, and increasing attractiveness of shopping online, based primarily on convenience.

“The number of internet users in Italy surpasses 25 million people. Among those, 35% purchased online in the last three months,” he says. “In 2011, there were about 9 million web shoppers in Italy, which is still lower than the European average, yet constantly surging.”

For its part, online audience analyst Nielsen says 35 million Italians aged 11 to 74 are internet users. A September report from Italian online audience analyst AudiWeb says 27 million Italians were online—a 12% jump on the previous year.

Netcomm’s findings are conservative compared to estimates from other analysts, such as e-commerce consultancy Casaleggio and Associates, which reported a 43% increase in e-retail in Italy between 2009 and 2010, with a total market value of 14 billion euros (US$18.3 billion). However, this estimate includes online gambling, and senior consultant Maurizio Benzi says leisure, principally gambling, represented nearly half of the growth, followed by tourism and electronics.

As the market matures and consumer confidence increases, the leading retail sectors are rapidly expanding online. Sectors registering the highest growth in 2011, says Netcomm, were clothing (+38%), publishing (+35%), technology (+22%) insurance (+ 21%), grocery shopping (+17%) and tourism (+13%).

Netcomm says the leading e-retail sites include Amazon, Banzai Commerce, eBay.it, Expedia, Groupon, Mediamarket, Privalia.

“E-commerce in Italy is still a focused market where the top 20 players hold 70% of turnover,” says Liscia. “51% of the companies operating are traditional retailers while the remaining 49% are dot-com.”

Online retail in Italy is building off a relatively small base. Italy’s online share of retail trade in 2011 was the lowest of 13 European countries at 1.3%, according to a study from the U.K.-based Centre for Retail Research. The research firm predicts online sales in Italy will grown by 18% in 2012, compared to an average 16% growth for Europe as a whole.

Stefano Masiero, CEO of Italian digital marketing firm E-Business Consulting says Italy is gaining ground in e-commerce, despite the economic crisis, as more Italians access the Internet. Masiero notes that Italians are Europe’s leading mobile phone users, and many use their phones to connect to the web .

“42.7% of Italians have a mobile phone, and 20 million people use a smartphone. This is a crucial element for the development of e-commerce, and m-commerce looks set to grow even more thanks to new payment methods,” he says.

Among the online retailers seeing lots of traffic from Italians using smartphones is Privalia, a members-only site that sells fashion apparel and leisure goods. Privalia last year introduced mobile apps for iPhones and Android phones that let members keep up with the latest deals and make purchases. “In the month of October alone, there were over 700,000 visits to 16 million pages with mobile applications,” says Privalia country manager Valentina Visconti.

“A 50% hike in mobile sales last summer is explained by more than 100,000 applications downloaded to date by our Italian members,” Visconti says. “The growth trend for this market segment continues, and we expect it to accelerate in the coming years due to the greater convenience and real personal shopper service it offers members."

International players are moving to buy a stake in Italy’s e-commerce boom. Ed Stevens, founder and CEO of U.S.-based Shopatron, which helps manufacturers sell directly to consumers via the web, says the company launched in September a version of its platform in the Italian language, with prices in euros and offering delivery in Italy. That, he said, was spurred by a Forrester Research report projecting Italy’s e-retail sales will double by 2015.

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