Eight European ecommerce markets show break-out growth

National economies are recovering after the 2008 global financial crisis. It’s been slow but sure. Ecommerce sales are also on the rise. This is heightened, of course, by the growth in digital devices, connectivity and customer demand over the last decade.

However, eight European markets are going beyond the tentative green shoots of recovery. Their ecommerce economies are showing real break-out spirit, growing at an average of 25 percent. This is two-and-a-half times higher than the average for Western and Central Europe, according to a new report from PPRO - New High-Growth Markets Europe & CIS.

Growth: strong but varied

Ecommerce is growing strongly in Romania, Ukraine, Kazakhstan, Portugal, Greece, Russia, Italy and Estonia. However, the reasons for growth vary.

Romania’s economy grew 6.9 percent last year, fueled largely by internal consumption. 90 percent of economic growth in the first quarter of this year resulted from strong domestic consumer demand. Unsurprisingly this is doing wonders for the country’s online economy, which is growing 40 percent year-on-year.

Renewed consumer confidence and a desire for a wider range of goods than those available at home have driven ecommerce growth in Ukraine (31 percent) and Kazakhstan (24 percent). Meanwhile, in Portugal and Greece various stimulus packages have contributed to economic recovery. Ecommerce growth on the back of this renewed prosperity has been double-digit.

Conversely, the Italian economy is forecast to contract from 1.6 percent last year to 1.1 percent this year. Yet ecommerce sales are still growing around 17 percent, albeit from a low base. In Russia, first- and last-mile improvements are contributing to an ecommerce boom. A recent rise in the number of internet users and improvements to the postal system are driving ecommerce growth rates of 17 percent.

Payment: global but local

The internet has brought global news, commerce and culture to users wherever they are. And brought what is happening locally to users to a global audience. It has made the global local and the local global. Yet, this electronic ‘global village’ is not a homogenous community.

Nowhere is this clearer than with payments. Payment habits online are strongly national. They are informed by various cultural, political, economic and technological factors. Generalising for speed, outside the card-loving heartlands of the US and UK, Europeans like online banking-based payment methods. E-wallets are popular in Asia, mobile wallets in Africa and e-cash in Latin America.

Consumers have tried and trusted payment preferences. And are seldom looking for a new way to pay. Ecommerce sales made with local payment methods overtook those made with internationally-branded cards three years ago. Local payments accounted for 51 percent of global ecommerce sales in 2015. By 2021, this is expected to climb to 71 percent, according to a Worldpay report. Clearly, if e-tailers only accept international credit and debit cards, they risk losing both sales and customers.

The economic recovery has put demand back into ecommerce markets. All eight markets in the PPRO New High-Growth Markets Europe & CIS report are showing rapid ecommerce growth for different reasons. However, one common theme remains: consumers are turning to ecommerce to solve problems of product selection and availability local to them. Global ecommerce sales are growing – and this is being driving local behaviours and local payment methods.

 About Ralf Ohlhausen

Ralf Ohlhausen, MSc in Mathematics and Master of Telecommunications Business, has over 25 years’ experience in ecommerce, financial services, mobile telecoms and IT. Ralf is responsible for expanding the company’s portfolio and global reach, as well as for developing new business areas and partnerships.

About PPRO

PPRO enables integrated electronic payment processing on a global scale spanning the entire payments value chain from acquiring through processing, collection and settlement. PPRO acts as a B2B payments hub, connecting PSPs and other merchant aggregators, such as acquirers and processors, with local payment schemes.