E-commerce in Germany: Opportunities and challenges amidst the Covid-19 pandemic
The pandemic has sped up digital transformation and driven e-commerce growth all around the world. This is especially true for e-commerce in Germany. It was worth 83.3 billion euros in 2020. This represents an increase of 14.6 percent compared to the previous year. In this article, our German ambassador Eugen Kuschnir gives us more information on this subject and also offers tips to e-merchants in Germany on how to make the most of this particular period.
Hello Eugen, can you share a little bit about yourself?
Hello, my name is Eugen. I am from Ukraine but I have been living in Germany for more than twenty years. I have been an e-commerce addict since 1998 and I became a Prestaddict in 2014. I am an IT consultant for small companies. In short, I help twelve merchants who use PrestaShop to fix their stores if they have technical issues.
Was e-commerce developed in Germany before the sanitary crisis?
Yes, Germany has been the fifth-largest ecommerce market in the world and the second-largest in Europe behind the U.K for a number of years. It has always been an attractive country for online business. Our country is very open to investors, and buying a domain name is also very easy. In the last few years, a great deal of small retail stores have developed their online presence by creating their e-store. The pandemic has definitely accelerated this phenomenon.
How did e-commerce evolve during the crisis in your country?
At first, people were very confused about this unprecedented situation and were afraid to spend their money. Therefore, they cut non-essential spending. The fashion industry, for instance, has been severely affected till mid-April. After this date, all of my customers, including those who work in the fashion industry, have increased their sales by at least 200% compared to the previous year. B2C e-commerce has truly exploded during the crisis, but B2B has also grown strongly. B2C e-commerce has particularly developed because consumers had no choice but to buy online, because physical stores were closed.
How did COVID-19 impact your customers’ businesses?
In general, COVID-19 had a positive impact on my customers’ businesses. However, I would say that supply chains have been severely tested during this period. For instance, one of my customers who sells women's clothing has encountered difficulties in getting the materials or goods they needed. Sometimes, it was even completely impossible to get some materials coming from other countries. As a result, they had to redesign some of their products.
Did your customers implement new practices to face this period?
Yes, one of my customers who runs three physical stores first thought of introducing click and collect. In the end, she did not do it because a great number of people preferred to stay at home. However, she made sure to facilitate communication between her and her customers by implementing a hotline to help them during and after their purchases. She is planning to implement click and collect once the situation improves, in order to meet the growing demand of online shoppers.
What impact did the pandemic have on your customers’ business during the promotional periods?
Many new e-stores opened during the pandemic, which means that the online competition became fiercer. As a result, all of my customers had to increase their digital marketing expenses. The majority of them have invested in Google campaigns (SEA) and mailing campaigns. However, it is worth noting that they made a smart investment: they all increased their sales during Black Friday.
Do you think PrestaShop helped e-merchants to tackle all these new challenges?
In a way, yes. People did not want to spend too much money because of the uncertain context, especially those who were planning to start a business. PrestaShop offers very affordable modules, features and themes that cost only about a hundred euros. Thus, I think PrestaShop has been particularly helpful to small businesses that are just starting out and that do not have large amounts of money to spend.
Do you think German consumers will continue to embrace online shopping after the crisis ends?
Yes, I think there will be a lasting dependence on online shopping. Digital buying and selling have long been on the rise but COVID-19 has truly made it the new way of life. An increasing number of consumers are opting for the convenience and safety of shopping right from their homes. Indeed, some people have really discovered the pleasure of staying at home, and they do not go out shopping as often as they used to.
Which e-commerce sectors have particularly boomed during the sanitary crisis in Germany?
The food delivery sector has experienced an unprecedented growth during the sanitary crisis. Every time I go out, I see delivery men who work for companies which I did not know existed. Some small farmers have also bought small cars to deliver fruits and vegetables to consumers. A big German supermarket called Aldi has also created a phone application to implement a home delivery system.
What advice would you give to a merchant who wants to start an online business in Germany?
It is a very good period to launch your online shop, regardless of whether you sell goods or services. The advice I would give to anyone who wants to start an online business in Germany is to adopt a multi-channel approach. In addition to having your online store, I think you should also consider running a physical store as well as a marketplace. In my opinion, selling your products or services on a marketplace only is not a good idea. If it closes one day, you will lose your customers. Therefore, it is very important to have several channels where you can sell your products or services because anything can happen these days, not just a pandemic.
Why would you recommend PrestaShop?
I recommend every merchant to use PrestaShop to create their online store. The software is quick to install and very easy to use, especially the newer versions. Moreover, the modules, features and themes are very affordable compared to those provided by other e-commerce solutions. Finally, what I like most about PrestaShop is its big community of Prestaddicts. If you have any questions, there will always be someone to help you on the forum.
Thank you Eugen for answering our questions :)