With our domestic markets becoming more and more saturated and global shopping trends growing among Millennials and Gen Z’s, localizing your online store onto another market is one of the main strategies not only to survive but also to thrive. Many of CEE’s online retailers choose to go big – and expand to Germany. What can you expect in Europe’s leading ecommerce country in terms of shopping behavior, competitors and overall market specificities?
Europe’s fastest growing economy
Although the rate at which ecommerce segments grow is higher in Romania and the Balkans, Germany’s economy is the fastest growing one overall. Germany ranks as the most populated country in the EU with the highest GDP and a considerably big ecommerce market (B2C ecommerce makes 14% of country’s profits), which has also doubled in size in the last 10 years.
The state’s strategic place in the middle of Europe, its considerably huge consumer market and highly-developed infrastructure create ideal conditions for expansion. Though the competition is pretty high in Germany, the consumer base is quite demanding and there are many other factors you should consider and prepare for. Ready?
The typical customer: demanding, traditional and tech-savvy
Since customers always come first, let’s get to know them! A typical German is a rather conservative person who opts for trusted stores (mostly German ones, as tradition still plays a role) but is open to trying out new channels if they are found trustworthy. When shopping for products online, a German is very sensitive to the over quality of service. Price is not the most important factor in decision-making, and Germans are willing to pay more, but won’t compromise on service: from website experience (mobile responsive!) to customer care (fast, friendly and professional!) to delivery (fast and worry-free!).
In terms of technology, the internet is a German’s best friend. While the country’s population consisted of 80.6 million inhabitants in 2017, nearly 75 million of them were digital, with 67 million shopping online regularly. What may surprise you is that the most economically active generation is 55+ which is also a very active online generation (the number of online users over the age of 65 is rising in Germany).
An average German spends about two hours online daily, and in terms of shopping behavior, 92% of them search for information before buying a product – and after buying it, they spend additional time online reviewing it on social media. Speaking of social, Facebook is the most widespread social network in ecommerce, as consumers like to read and share info about products, and companies invest in an active Facebook presence. The blue site’s popularity is followed by WhatsApp (twice as many users as Messenger), Instagram, and Snapchat. Source: EXPANDO.
Online shopping: Comparison sites, trusted stores and coupons!
There are three quirks we can attribute to most Germans – the first is being extra cautious when shopping online and picking trustworthy sites carefully. The most popular stores are Amazon, Otto, MediaMarkt, Zalando, Bonprix, and Tchibo, as well as several others.
In case you are a newcomer to this big brand game, one of the musts would be getting a third-party certification, guaranteeing shoppers a safe and high-quality shopping experience on your site. Trusted Shops® guarantee is the most widespread, followed by TÜV SÜD, EHI-bvh, BoniCert or CHIP-Zertifizierung.
Price comparison sites are very popular in Germany as a part of the buying process. Most citizens go through some of those to read reviews and compare products. The top three most widely used are idealo.de, geizhals.de, and Billiger.de. There are also specialized sites and marketplaces such as everysize.com for shoe shopping, lenscheck.de for contact lenses or apomio.de for cosmetics and pharmaceuticals.
Most purchased segments, payment methods, and logistics
What categories are among the top 5 best-selling in Germany? First and foremost is fashion and clothing, bought by 35+ million customers in 2016, followed by books (26 mil.), household electronics (23 mil.), cosmetics (18 mil.), and films and DVDs (16 mil.). We can find furniture, food, and children’s goods amongst other popular categories.
The most sought-after products are cars and car accessories, followed by fashion, housing and gardening, sports, computers and tablets, health and beauty items, mobile phones, industrial goods, jewelry, and toys and leisure items.
These are usually delivered by German Post, DHL, or PPL. Relying on their super-organized infrastructure, the majority of the German population (87%) prefer their purchases to be delivered straight to their homes, but the growing network of pickup points is showing another emerging trend. Speaking of delivery, Germans are really sensitive on its speed and quality. Worry-free and flawless delivery within 5 days (ideally by the second day!) is a standard! Offering free shipping is quite widespread among German stores, as buyers respond very positively to this! Source: EXPANDO.
Tech-savvy Germans pay for their purchases through PayPal mostly, with invoicing, card payments and bank transfers being other popular methods. In terms of taxes, VAT registration in Germany is compulsory after reaching the 100,000 Euro limit. The standard VAT is 19%, and the reduced one is 7%.
Germany is currently the biggest and most viable market in Europe, but tough to compete in with all those big brand names and trust-sensitive consumers. Now, the real question: is expanding to Germany for you? What is your experience with this exciting market? Let’s continue the discussion down in the comments or over on social media!