Germany is Europe’s largest economy and the most populous and largest country in the EU. It is also the third most active e-commerce country in the world, both for imports and exports, after the US and the UK. The German e-commerce market is strong worldwide and accounts for 25% of the European e-commerce turnover.
Germany had a total turnover of €105.6 billion in 2016, an increase of 10% from 2015. This is a lucrative country to do business in, especially online, as Germany ranks 5th in the world for online sales volume. German consumers have a big interest in online shopping, in fact, Germany shows the second highest interest in the search term “shop online” according to Google Trends.
Unless otherwise noted, figures in this article are sourced from:
- Total population: 82.11 million (2017)
- Internet penetration: 71.1 million or 86.8% (2013)
- Mobile penetration: 139.9% (2013)
- Online shoppers: 51.6 million (2015)
- E-commerce sales: 59.7 billion EUR (2015)
- M-commerce sales: 4.97 billion (2013)
- E-commerce annual growth rate: 13.3% (2015)
Germany is the most populous country in the EU and over 62% of Germans shop online. 90% of all internet users buy their goods or services online and spend on average €1,157 per year. The biggest online shopping day in Germany is “Green Monday,” the first Monday in December. This day works as an online shopping promotional event before Christmas.
Credit card usage is uncharacteristically low in Germany, making bank transfers and invoices the most popular payment methods. A survey from 2013 showed that six in ten online shoppers prefer to pay after receiving the items they’ve ordered online. Other popular payment methods in Germany are online payment services and e-wallets.
The top product categories in Germany for 2016 retail e-commerce sales were Clothing (an increase of 11.5% in sales from a year earlier) and Consumer Electronics & Telecom. Other popular categories include Shoes & Lifestyle and Information Technology.
German businesses are also turning more towards online shopping for their B2B needs; 83% of the companies surveyed in a 2015 study stated that they frequently made company purchases online, such as for office supplies and other business needs.
Drivers and Barriers
Driver: Cross-border Commerce
Germany is one of the world leaders in cross-border e-commerce and German online shoppers love to buy cross-border, mostly from the UK, the US, France and China. The cross-border e-commerce penetration among German digital buyers is on the rise. In 2015, 53% of German internet users made an international purchase, which is more than shoppers in most other European countries. Furthermore, Germany is responsible for 15% of global cross-border sales.
The German e-commerce market totaled €59.7 billion in 2015 and grew about 12% to €66.9 billion in 2016, according to a report by Bundesverband E-Commerce und Versandhandel (bevh). This market is one of the most active ones in the world and is growing faster than any other Western European Country.
Barrier: Aversion to Credit Cards
Many Germans are wary of using credit cards because of a fear of carrying debt. In 2015, the level of card payments was at just 12%, a number that is expected to fall to 8% by 2019! Also, only 25% of German shoppers use credit cards when they make an online purchase.
Merchants who wish to sell to German online shoppers need to offer alternative payment options beyond credit cards. Popular alternatives to credit cards would be paying via bank transfers, invoices and e-wallets.
Mobile commerce is gaining popularity in Germany and a big proportion (62%) of the German population own smartphones. In 2013, 10% of all online sales were made via a mobile device and in 2014, it was reported that 15% of German consumers made a monthly purchase on their smartphones. In 2016, retail m-commerce sales made up 33.2% of Germany’s total retail e-commerce sales.
Merchants wanting to do business in Germany should focus on offering mobile-friendly websites and provide convenient ways to shop using a mobile device (such as apps), as this will surely result in profits for the business. By optimizing for mobile payments, merchants can attract more German consumers.
Barrier: Strict Data Protection & High Return Rates
In Germany and the EU, data protection and privacy laws are very strict. The European Union “Electronic Commerce Directive (2000/31/EC)” provides rules for online services in the EU, which the German regulatory environment follows. Among other things, online providers must respect consumer protection rules by indicating contact details on their website, clearly identifying advertising, and protecting visitors against spam. Consumers must also be informed when businesses are collecting data, what the data will be used for, and who will have access to it. They must also be given sufficient time to object to how their personal information will be processed. Companies are advised to consult with a lawyer before collecting, storing or processing any kind of data in Germany.
Germany is also known for having a high return rate and many German consumers are hesitant to shopping abroad because they feel that returning products would be too difficult or costly. There are reports claiming that 50% of all orders by German consumers get sent back! This is very important for merchants to be aware of and when shipping internationally to Germany, it’s important to offer the same returns policy as the one in place for the business’ native country and it could be good to have a local return address.
German E-Commerce Facts
- The third most active e-commerce market, after the UK and the US.
- A world leader in cross-border e-commerce.
- Accounts for 25% of the European e-commerce turnover.
- Most popular payment methods are invoices, bank transfers, and e-wallets.
- Green Monday (the first Monday in December) is the biggest online shopping day of the year.
- Ranks 5th in the world for online sales volume.
- 51.6 million of the population shops online and 90% of all internet users buy their goods or services online.
- Retail m-commerce made up 33.2% of Germany’s retail e-commerce sales in 2016.
- The most popular product categories for retail e-commerce sales include Clothing, Consumer Electronics & Telecom, Shoes & Lifestyle, and Information Technology.
German consumers love to buy cross-border, making Germany a fruitful market for international merchants. Online and mobile shopping are gaining popularity as well, both among personal shoppers and German businesses, so whether you sell to individuals or businesses, Germany is a lucrative market for you.
Expanding into a new cross-border market is always a challenge but can be 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.