Seventy per cent of European online sales are from just three countries, new research has found.
FACT-Finder, an ecommerce specialist, found that the big three are the UK, with €48bn in annual sales, Germany, with €39.2bn and France with €25bn.
At the same time, cross-border trading is a challenge for many online stores, said the report. Cultural differences mean that despite the physical closeness of countries such as France and Germany, advertising campaigns do not translate across borders and few of their online stores trade beyond national boundaries.
There’s also, said FACT-Finder, a lack of consumer confidence in buying from different countries, while complex VAT requirements make it difficult for smaller brands and retailers to sell across the European Union.
The fastest growing, though currently the smallest, online market in Europe is Poland, which generates €3.6bn in sales but has grown by 36%^ in 2010, compared to the same time in 2009. The FACT –Finder report singles this out as the market with the greatest potential since its retailers are more aware of the opportunities offered by the internet.
Looking to 2011, the report suggests that the UK will see retailers investing in ‘user experience’ while the French will be looking to focus on internationalization. Spain’s etailers will be looking towards fast-growth with more retailers going online.
Mathias Duda, head of UK operations at FACT-Finder, said: “The growth of ecommerce has made it much easier for even small brands and retailers to trade outside their domestic markets.
“However while the infrastructure might be there to support this, it can still take a considerable investment in time and money to understand the intricacies of doing business in different markets. Often this leads to companies not taking advantage of these expanded markets and continuing, solely, to trade locally.”
He added: “We hope others will find this report enlightening and perhaps start a conversation about how retailers see themselves in the European market and consider how cross-border trading might be improved.”
Picture: Mathias Duda of FACT-Finder