Market Insights: Understand online shopping in Germany

Generating more sales is the ultimate purpose of any for-profit company. Either building a better workforce, or innovating offerings, or penetrating new markets can help to achieve that, but the optimal choice for US/UK merchants is to look for demands in new regions.

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, the 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!

The current state of e-commerce in Germany

To see if Germany is a potential market for your business, you need to look at the market size and the future scenario.

Performance in recent years

Prior to the COVID-19 outbreak, Germany was in the 5th position for e-commerce in the world with 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.

For more details, please check out online shopping in Germany.