The latest view on eCommerce in Germany

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Author: Lengow

If you are thinking about entering the German ecommerce market, there is much to consider. Germany is the 6th largest1 eCommerce market in the world, and 3rd in Europe after the UK and France.

 

With a total turnover of €105.6 bn2 in 2016 (up 10% from 2015), Germany is a very lucrative country to be selling in, especially online. The internet penetration rate in Germany is very high at 89%, with one of the biggest number of web users in Europe — 62.9 m people3.

 

According to consulting company Schickler, sales of physical products were worth €52.5 bn last year:

eCommerce in Germany

Market leaders in Germany

 

Firstly, let’s take a look at the top players4 in German ecommerce. In terms of ecommerce marketplaces, there are two that reign in Germany: Amazon, and German online department store and marketplace, Otto, that owns almost half the market. Other large retailers include:

 

  • Zalando (€1,031m)
  • Notebooksbilliger.de (€610m)
  • Cyberport (€404m)
  • Bonprix (€484m)
  • Tchibo (€450m)
  • Conrad (€433m)
  • Alternate (€376m)
  • Apple (€369m)

The role of social media and mobile retail

 

Germans use Facebook much more than any other social media platform, by quite a long way. 38% of the total population use Facebook, with only 9% using Google+, and only 7% on Instagram and Twitter.

Social Media Usage in Germany

Mobile retail is fast becoming one of the most important selling strategies in ecommerce. This holds especially true in countries like Germany, where mobile shopping accounts for 15% of all eCommerce sales in Germany, and the usage of smartphones is also growing steadily, with a mobile sales total of €8.8 bn. It is also worth noting that Android is the most-used operating system5 on mobile devices.

 

Buying behaviour and cross-border sales

 

When tapping into a new marketplace, it’s very important to understand the opinions and preferences of the general public that you’re selling to.

 

In terms of image ranking6 of German online shops, in first place is Musikhaus Thomann, with an average score of 83.5% with regard to website design, user friendliness, product range, price-quality, service, payment, and delivery. After this are Parfumerie Pieper (81.3%), Zooplus (80.5%), Shop Apotheke (80.5%), and Garten XXL (80.1%).

 

German cross-border shoppers primarily look to the U.K., the U.S., and France for goods, with better product availability cited as the top motivation for shopping abroad7, as well as appealing offers and better condition of products. The top reason for German people to avoid shopping abroad is that they simply feel they don’t need to — their own country already meets their needs.

 

Another big reason is that they feel that returning products would be difficult or costly, so make sure that if you are shipping internationally, that you offer the same returns policy as you would in your native country. This is especially important when considering the fact that Germans have the number one returns rate in Europe – 23% of the total 46% of Europeans who returned items last year because of unmet expectations were from Germany.

 

The top selling product category that German eCommerce shoppers buy from abroad is clothing and footwear, followed closely by books, CDs, DVDs, and video games. In fact, 22% of German shoppers8 have bought one of these items from abroad at least once.

 

German shoppers tend to compare prices and like to be aware of special offers — they’ll readily go to different shops to get better deals. According to our DACH Communications Project Manager, Imke Müller-Wallraf, “German online shoppers are attentive to product descriptions, and the opinions of other online shoppers. They like to know they are getting a good deal – 26% of German shoppers compare prices using their mobile phone when visiting a store.”

 

In fact, it’s also important to simply offer a wide range of options. 83% of German eCommerce shoppers9 said they would choose one online retailer over another offering the same product because of a positive delivery experience. 55% also feel that standard delivery (3-5 days) should be free.

Buying Abroad in Germany

Payment and delivery methods

 

The preferred payment method in Germany is direct debit, followed by invoice and digital payments. Alternative payment methods are growing in popularity, with the launch of Paydirekt at the end of 2015, joining Sofort, Ratepay, and Giropay. These are especially popular due to the added safety aspect they present, especially when shopping on an unknown or foreign site.

 

In terms of delivery, 1 in 4 German shoppers10 value fast delivery, so it’s important that you have quicker options. Or alternatively, around half of local shoppers have used a locker service to pick up their goods.

 

In fact, it’s also important to simply offer a wide range of options. 83% of German consumers said they would choose one online retailer over another offering the same product because of a positive delivery experiencexv. 55% also feel that standard delivery (3-5 days) should be free.

 

Same day delivery doesn’t seem to be much of a priority for German shoppers, who are in fact leaning more towards the convenience of click and collect, too.

 

According to Kai Schotten11 from Asendia Germany, “Some ecommerce companies are piloting same-day delivery in Germany, underlining the trend of more rapid delivery times. However, I think this is more about companies trying to differentiate themselves from the competition rather than a service that consumers are requesting. In the future, demand for services such as click and collect and pre-booked time slot delivery will grow.

Key findings and predictions

 

Based on what we’ve discussed, a few predictions can be made for the future of ecommerce in Germany. Firstly, it’s clear that omnichannel strategies — for instance, physical stores introducing an online presence — will continue to grow, especially considering the popularity of mobile ecommerce in Germany.

 

In terms of delivery methods, although next-day delivery will no doubt start to be introduced more, the rising trend will be in click and collect services, as Germany follows the UK with a growing preference for this convenient method.

 

Cross-border sales are also set to increase, with the continued growth of international marketplaces such as Amazon and Zalando providing an opportunity for German consumers to buy foreign products through a trusted site.

Conclusion

 

All in all, if you’re considering selling your products cross border, Germany would be a strong country to start in. As with all markets, take into account local characteristics and preferences. In this case, be sure to allay German shoppers’ main fears about cross-border shopping, by stressing your commitment to stress-free returns, and providing responsive and helpful customer service.

 

For more information on the German eCommerce Market, download the FREE German Country Guide.

 

 

References:

 

 

1 - Lengow German eCommerce Outlook
2 - Ecommerce News Germany Article
3 - Lengow German eCommerce Outlook
4 - Ecommerce News Germany Article
5 - Germany B2C Report 2016
6 - Germany B2C Report 2016
7 - PFSWeb 2015 eCommerce Summary
8 - Germany B2C Report 2016
9 - Different delivery preferences in UK, France and Germany Article
10 - Different delivery preferences in UK, France and Germany Article
11 - Germany B2C Report 2016

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