E-Commerce in GERMANY
OPPORTUNITIES FOR FOREIGN ONLINE SHOPS
With 70.1 million online shoppers, Germany has Europe's greatest potential. The Internet penetration rate is the highest of the Big Three: 86.8% of all Germans have Internet access.
German E-Commerce turnover is growing constantly and is the second highest in Europe after the UK.
Differing payment methods in an international e-commerce landscape
Alongside sales strategies, marketing channels and customer service, providing the appropriate range of payment options is one of the most vital ingredients for running a successful online retail business. Customers who can’t find their preferred method of payment at the checkout are more likely to abandon their basket.
In line with the increasing internationalisation of e-commerce, certain payment methods and providers are becoming standard European options – above all credit cards and PayPal. As can be seen in the study, within Europe there are still various country-specific options when it comes to online payment. For retailers, it is important to recognise these and develop the payment offering according to their market. For example, a UK retailer interested in reaching out to Polish consumers would do well to identify the country-specific e-payment alternatives to PayPal, and offer these as payment methods.
The analysis is based on the 50 online retailers with the highest national Alexa traffic rankings within the 100 most-clicked shops on idealo.co.uk, idealo.de, idealo.fr, idealo.it, idealo.es and idealo.pl
In Germany, credit card as a means of payment is generally less widespread than in other countries. This is no different for online trading. While in France, the UK and Spain, every shop accepts payment per credit card, about one in ten German Shops (12%) does not. In Germany, E-Payment methods dominate payment options (90%), ahead of even credit cards.
However, the variety of payment options offered in Germany is higher than in any other country. A total of ten different payment methods - from pre-payment to mobile payments - were identified by Idealo in the German Top 50 Shops (Payment Trend Study). Among them are many "classical" methods of payment such as cash on delivery, invoice and pre-payment.
The principle of "goods before money" is rather unpopular with most dealers. Nevertheless, the option „purchase on account“ is relatively widespread in German online shops. Well over half (64%) of the investigated merchants offer this option. Some merchants use third-party provider like Klarna or BillSAFE and therfore outsource the administrative burden and the risk of default of the „purchase on account“ option.
Compared to the other countries (except Poland), the cash on collection of the goods in Germany is relatively common (22%) - a sign of the increasing combination of online and offline channels.
A German rarity represents the payment made by direct debit, which is being offered by 19% of merchants as a payment option in their shop. In the other countries the direct debiting scheme– with exception of one store in Spain – is not being used at all.
According to the study, mobile payment options are only used in Germany, but even there only in three out of the 50 stores that have participated in the study.
Shipping services like DHL, Hermes and DPD are now being considered as innovators in E-Commerce by developing solutions based on the needs of the merchants or their customers. Thus, both sectors are driving each other. Consumers are pleased with shorter delivery times, varied delivery options and new services. They make online shopping more comfortable and promote growth for comparatively young E-Commerce areas such as furniture or food delivery. 70% of German online retailers rely on DHL, only 31% offer an optional express delivery. Same Day Delivery is still a niche product.
And what do Germans mostly buy on the net? Clothing, consumer electronics, books and media are the most sold items online.
As for mobile usage and revenue, Germany places directly between Great Britain and France with a smartphone density of 62%. The M-commerce sales in Germany are growing constantly. Experts predict that the mobile commerce revenue can double within only one year. This is the result of an international investigation commissioned by deals.com, owned by RetailMeNot, Inc.
The M-commerce share of E-Commerce sales is rising constantly. According to the study, more than every fourth euro in the online business is spent using a mobile device. In a European comparison, the German M-Commerce share is only slightly behind the UK in second place - but still ahead of the US.