Everything You Want to Know about E-commerce in Germany

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Everything You Want to Know about E-commerce in Germany

General information about Germany

Population: 82,293,457
Number of Internet Users: 71,016,605
Internet Penetration: 88.00%
Mobile Phone Users: 55,492,000
Mobile Phone Penetration: 68.80%
Language Spoken: German

Europe is a good choice for dropshippers with its sound infrastructure and high per capita income. Germany boost the third largest e-commerce market in Europe, attracting more and more dropshippers. So, what about e-commerce in Germany?

E-commerce status in Germany

1. Promising market prospects
The retail sector of e-commerce in Germany is expected to be worth 73.30 billion euros by 2020, accounting for nearly 15 percent of total retail sales, according to IFH Cologne, a Germany e-commerce research institute.

2. High consumption level
Germany enjoys the largest economy in Europe, with a population of 80 million, nearly 20 million more the population in the UK. The per capita GDP of Germany is nearly us $50,000, the Internet penetration rate reaches 83%, the proportion of online shopping population reaches 81%, and the per capita annual online shopping spending is $726.

3. Local logistics
Nine out of ten percent Germans prefer home delivery, besides, they also concerned about shipping methods and delivery time.

Eighty-three percent of customers said they would make a decision to buy an item based on the seller’s logistics evaluation. What’s more, 55 percent of customers hold the view that the standard delivery time (3-5 days) should be free of postage.

Major local logistics suppliers in Germany include Depost (Germany Post), DHL, DPD and so on. It often takes 2 to 7 days to get to the main EU countries from Germany, and 1-3 days to deliver the goods locally.

4. High profits
Manufacturing industry in Germany is developed. The German people prefer high quality products and willing to paying for it, they do not believe in goods which is high quality and low overhead. The profit margin is much higher than that of the us and UK markets.

5. E-commerce platform in Germany
Amazon, Otto and Zalando dominate the e-commerce retail industry in Germany. And these three companies account for 44% of the total sales of Germany’s top 100 e-commerce companies.

Online payment method
Although PayPal is widely used in Germany, the most common online payment method in Germany is an invoice, that is, after receiving the payment notice from the seller, customers will pay in accordance with the above-mentioned account number and amount.
In Germany, 58 percent of online shoppers order first and pay later. And 34 percent of Germans are accustomed to paying with credit cards, including MasterCard, Visa, and American Express.

Online shopping characteristics of Germans

1. High shopping rate
Research by B2C Europe, an e-commerce solutions provider, shows that 70 percent of German consumers have bought at least one physical product online every month, making them the most frequent online shoppers in Europe and spending 10 percent more online than their neighboring countries.

2. High return rates
Research shows that: Germany is one of the highest return rate, which is as high as 50 percent. It is not because the Germans are hard to please, but as a result of the strict protection regulation of consumer rights, and also influenced by consumer behavior. Lots of Germans tend to purchase multiple colors and sizes and return the disliked ones after receiving and fitting.

Best selling products in Germany
Germany has high e-commerce penetration in consumer electronics and fashion products.
However, Germany is a powerful country in automobile manufacturing, and the auto parts market should not be ignored. In the $54.20 billion German auto aftermarket of $54.2 billion, spare parts account for about two-thirds, and it is expected that the share of auto parts e-commerce will reach to 20% by 2025.

German e-commerce companies need to pay attention to
As mentioned above, Germans are very fond of return products, so it is very important to have a local return address, which will not only increases your potential customers but also allows you to control the cost of returns.
Germany also has specialist service providers, that can ease the cost of setting up its own warehouses.

The e-commerce market in Germany in 2019
The e-commerce transaction volume reached 53.30 billion euros in 2018 and is expected to exceed 57.8 billion euros this year.
Data from Handelsverband Deutschland (HDE) shows that the e-commerce transaction volume reached 53.30 billion euros in 2018, an increase of 9.10%, which is slightly lower than expected.
According to HDE, absolute sales growth of e-commerce in Germany was about 4.4 billion euros in 2018. Same as in 2017, the main drivers of e-commerce growth in Germany are fast-moving consumer goods (FMCG), DIY& gardening and household goods. Online retail sales in Germany now account for 10.80% of sales. As shown in the figure below, e-commerce transactions in Germany are expected to reach 57.80 billion euros in 2019.

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