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Country Spotlight: France, the 5th Largest E-Commerce Market

Country Spotlight France

France is now the 5th largest e-commerce market worldwide. According to 2016 figures, France soared past Germany, knocking that country out of the top 5 in online sales volumes and becoming the 2nd biggest market in Europe (behind only the UK).

There are numerous factors that are causing the growth in French e-commerce to outstrip that of its neighbors. The popularity of m-commerce apps, cross-border purchases and small orders, among other things, all contribute to it. France is unique in that it is both a mature, established market, and also has the kind of high growth typically seen only in emerging markets. This makes France an attractive destination for e-commerce investment – but before selling in France it’s important for merchants to understand why it’s such a strong market and how to best target French consumers.

French Consumers

  • Total population: 66.7 million
  • Internet penetration: 87% (58 million)
  • Online shoppers: 35.5 million
  • E-commerce sales: EUR 72 billion
  • M-commerce sales: EUR 18 billion
  • E-commerce annual growth rate: 20%

In France, the average shopper spends 1,780 euros online per year. French consumers are tech-savvy and globally-minded, with a quarter of all transactions taking place on a mobile device. Travel & Tourism is the most popular e-commerce category, while the leading retail sector by far is Clothing & Shoes (more than 12 billion euros in sales), followed by Media & Entertainment and Home & Garden, each with less than a quarter of the sales of the leading sector. On mobile, Cultural Products is a strong performer, attracting 10% of the m-commerce shoppers.

The most widespread online payment method in France is credit card, accounting for 61% of all purchases, followed by e-wallets with 16% and bank transfers with 11%. The most popular payment card is Cartes Bancaires, a domestic credit card that can also be used as a debit card, representing 52.5% of the total credit card market share.

French consumers also value omnichannel commerce, with one survey showing that 72% have opted for an in-store pickup option. In the same survey, 56% of the respondents stated that free delivery influences their purchasing decisions and 84% said that a positive delivery experience encourages them to return to the same merchant. Thereby, providing free and on-time delivery can win you a lot of loyal customers.

Drivers and Barriers

Driver: Cross-Border Commerce

The fastest growing e-commerce segment in France is cross-border purchases. Nearly half of all French consumers regularly buy from cross-border merchants and 19% of all online sales in 2016 were made on non-domestic websites, four point higher than the European average of 15%, most frequently Germany, the UK, Belgium, the US, and China. With cross-border e-commerce penetration rapidly approaching 50%, France is one of the world leaders in this regard.

Barrier: Small Purchases

Like in many mature markets, as consumers become more comfortable with e-commerce, they tend to make smaller purchases more frequently. The average purchase value in France decreased by 7% in 2016 to 70 euros, with the gains being made up of more frequent purchases (the average online shopper placed 32 separate orders in 2016). This can be challenging for retailers based outside of France as it places more pressure on them to compete on price, delivery time and free shipping in order to offer high value at low cost.

Driver: M-Commerce

The market share of m-commerce in France is remarkably high, accounting for 25% of all online sales. While web-based e-commerce sales grew by 18% in 2016, m-commerce grew by 30%. What sets France apart from other western markets is that retailers have adapted more rapidly and effectively to the rise of mobile, with 31 of the country’s top 50 retailers having a mobile app. Many retailers around the world ignore the demand for good m-commerce solutions and those that don’t will be well rewarded for it.

Barrier: Cybercrime

France is targeted by more cybercrime attacks than any other country in Europe. 41% of French smartphone users were victims of cyber attacks in 2014, compared to only 28% across Europe. Payment card rejection rates due to fraud are 8.5%. Many online merchants have still not adopted 3D Secure, out of concern for creating friction and causing cart abandonment. However, French consumers are increasingly aware of, and concerned about, the risk of cybercrime. Offering a high level of security and transparency can go a long way toward ensuring not only your own safety but also encouraging loyalty in your customers.

French E-Commerce Facts

  • 2nd-largest e-commerce market in Europe, 5th-largest in the world.
  • 46% of internet users make cross-border purchases.
  • French consumers spend an average of 1,780 euros per year online, spread over 28 individual transactions.
  • While average purchase value dropped by 7%, the total purchase volume rose by 21%
  • M-commerce accounts for 25% of all online sales.
  • 62% of the top retailers in France have a mobile app.
  • The most popular online products in France are Clothing/Shoes, Media/Entertainment and Home/Garden.

Merchants who begin selling in France are tapping into one of the most promising cross-border markets in the world. E-commerce already accounts for 8.34% of the country’s GDP and the French Economic Federation, FEVAD, predicts online sales to reach EUR 80 billion by the end of the year, with the fastest growing e-tail sector being cross-border shopping, so the time is ripe to enter the market.

Expanding into a new cross-border market is always a challenge, but can be very rewarding if done right. For the latest news and information about how to scale up your e-commerce enterprise into an international success, subscribe to the Payza Blog and follow us on Facebook and Twitter.