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Europe remains the biggest e-commerce market and it’s growing rapidly.
When it comes to e-commerce, Europe is a tale of two continents. Online retail is well established in such leading European economies as the United Kingdom, Germany and France, but it’s only just getting started—through growing rapidly—in the rest of Europe. That includes in such important southern European markets as Italy and Spain, and the emerging economies of Eastern Europe, led by Russia.
Taken together the 45 nations of Europe, including the 27 countries that make up the European Union, represent the world’s biggest e-commerce market. But it’s more like Asia than the United States in the sense that retailers have to view consumers differently from one country to another.
“Europe is a loose collection of collaborating countries with different languages, laws, customer behaviors, cultures, payment preferences and currencies,” says Forrester Research Inc. principal analyst Martin Gill, who covers European e-commerce and web technology. “There are big windows of opportunity for any online retailer that can bridge these gaps and develop universal e-commerce.”
European retailers no doubt envy their U.S. counterparts who can create a single web site that can cater to all U.S. consumers, and, with a little customization, to those in Canada as well. But that’s not the case in Europe, where European consumers are wary of buying from an e-commerce site based in another country, concerned more than anything about whether they could get a problem resolved, according a recent study by management and information technology consulting firm Accenture. As a result, Accenture says, only about 9%—$27.20 billion (20.88 billion euros)—of all European e-commerce sales take place across national borders.
That’s leading such Europe 500 retailers as U.S.-based Amazon.com Inc., No. 1 in the Europe 500, and European rivals like Germany’s Otto Group (No. 2), Tesco Stores (No. 5) of the U.K., and Yoox Group of Italy (No. 80) to offer more localized web sites and online offers.
These retailers and others in and out of the Europe 500 are seeking to benefit from the strong growth in e-commerce in Europe, despite the region’s lingering economic malaise. In 2012 European e-commerce grew 16.0% to an estimated $302.20 billion (232.17 billion euros), says research firm Centre for Retail Research. In comparison e-commerce in the U.S. grew year over 15.9% to $225.54 billion (173.26 billion euros), according to the U.S. Department of Commerce. In Asia, the world’s fastest-growing region for online retailing, 2012 e-commerce sales reached an estimated $256.50 billion (197.05 billion euros), up 31.8%, says Forrester Research.
But e-commerce is growing much faster in the east and south of Europe, than in the western markets where online shopping is far bigger. The 302 Europe 500 web merchants located in France, Germany and the United Kingdom grew their combined sales year over year 16.7% to $74.48 billion (56.93 billion euros. But other parts of Europe such as the 46 Europe 500 retailers in Italy, Spain and Portugal grew even faster to combined web sales of $5.81 billion (4.44 billion euros) in 2012, up 26.6%. The 39 Europe 500 retailers headquartered in the Czech Republic, Poland, Romania and Russia grew year over year 27.2% to $4.54 billion (3.47 billion euros). E-retailers especially see opportunity in Russia, where e-commerce sales could grow by as much as 200% over the next three years and reach $36.00 billion, says investment banking firm Morgan Stanley.
More on these and other metrics and analysis is contained in 2013 Internet Retailer Europe 500.
The 2013 Europe 500 is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the new 2013 Europe 500 is available here.