These two markets seem to be the most challenging worldwide. Therefore, if you have been successful in the States and in Britain, you are likely to have a proficient team with an almost perfect product. Then, market expansion is the next step to boost sales. With the blossom of e-commerce, it’s also getting way easier to target consumers on the other side of the globe.
In our Market Insights series, we will examine and analyze some potential markets for retail businesses, especially Shopify merchants in the US/UK, to expand to. Today, we keep the focus on online shopping in Germany - the�No.3�country for e-commerce revenue in Europe - and German consumer behaviors. We will also present the pros and cons of expansion into Germany and suggest some next steps. Let's jump right in!
To see if Germany is a potential market for your business, you need to look at the market size and the future scenario.
Prior to the COVID-19 outbreak, Germany was in the�5th�position for e-commerce in the world with a total revenue of�€72.6 billion. The hit of the global pandemic with “stay-at-home" orders has pushed online shopping in Germany even further. In 2020, e-commerce in Germany was worth�€83.3 billion, surpassing the average growth rate of�11.3%�in the past 3 years by 3%. The significant YOY increase is predicted to be prolonged and amplified to more than�€141 billion�in 2024. �Those impressive statistics in recent years make Germany a strong and major player in the European eCommerce industry alongside the UK and France. E-commerce growth in Germany has more potential than in France with the backup of a sufficient logistics system, which will be discussed later.
Although German consumers prefer brick-and-mortar stores to online marketplaces, online shopping gradually becomes their habit as a result of COVID-19. Nearly�80%�of internet users purchase things online and up to�30%�of them do it on a weekly basis.
Although vaccination programs are on the right track, and Germany and Europe are preparing for a new normal post-pandemic, shopping habits established during the lockdown will not be washed away. The digital stickiness of German consumers is prominent. Research by McKinsey shows that up to�91%�of respondents continue to purchase online post-COVID-19.
With such promising numbers in e-commerce sales and online shopping customers, Germany should be on the priority list to consider for market expansion.
Remarkable e-commerce trends help you understand the orientation of the market, so you can decide if it aligns with your business goals.
There is nothing new about the domination of smartphones and tablets in global online shopping. Likewise, mobile sales in Germany are growing more quickly than overall digital sales. Mobile apps and mobile payments were the�top categories�for German retailers' investment in 2019. They also brought the highest ROI of 12% and 13% respectively. As�86%�of German citizens stated they are most likely to shop online from the couch, mobile commerce will continue to contribute a significant part to the overall e-commerce revenue.
Although many customers are against online advertising, it seems to be effective to the German.�One-third�of e-shoppers here have purchased directly through an advertising post at least once while�26.7%�have at least made a click on it.
Key opinion leaders (KOL) and micro-influencers are also popular in Germany. Around�20%�of online consumers here buy the advertised product directly from an influencer's product post that they visit. Another�20%, despite not making the instant purchase, later buy the featured item either online or offline.
Global consumers are more and more aware of the anthropogenic climate change caused by their consumption. That's why a minimal lifestyle that encourages “reduce, reuse, and recycle” is trending. German consumers are not excluded from that trend. More about online shopping in Germany.�
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