After two years of contraction, the e-commerce sector in the Czech Republic showed signs of recovery, recording a 4% year-on-year increase. This development marks a change from previous negative trends, indicating a potential growth trajectory for the future.
Growth and challenges in the sector
Since 2015, the e-commerce sector in the Czech Republic has experienced a period of steady growth, culminating in 2021 as the year of maximum development. Significant momentum was recorded in the two-year period 2020-2021 during which online shops increased by 10%, bringing total sales to 68 billion crowns. This growth, well above expectations, marked a turning point for the sector.
However, this has come to a halt over the past two years, mainly due to rising inflation and the economic difficulties faced by households, leading to a drop in sales. In the first quarter of 2023, there was a reduction of 13% compared to the previous year, with a slight improvement in the second quarter, where the decline stood at 8%. Nevertheless, the summer brought a further contraction of 11%, with buyers’ preference for lower value goods, which negatively affected the average order amount. The electronics sector suffered a reduction in its share of the total volume of online sales from 25% to 22%, while sectors such as cosmetics, health, sofas and snowploughs saw their market share increase, in some cases even over 100%.
Despite a growing year-end, the turnover of online shops since 2021 decreased by 38 billion crowns. The last quarter of the year showed signs of recovery with a 2% growth thanks to Christmas sales and seasonal activity, although the general trend was towards buying cheaper goods and seeking special discounts. Overall, according to a report by price comparator Heureka and the Association for E-Commerce, sales during the year fell by 6% to CZK 185 billion with almost 50,000 online shops operating.
Recovery perspectives
The year 2024 marked another step forward in the recovery of Czech e-commerce, despite a slight contraction in March. The average order value increased by 8% compared to the last quarter of 2023, reaching 1,512 crowns. This increase was helped by the easing of inflation, which boosted consumer purchasing power in February and March. The entry of new international players into the market led Czech consumers to demand a higher level of service, showing a preference for local merchants for purchases of higher value products. However, the arrival of Chinese e-commerce giant Temu poses a challenge for domestic e-shops, which face higher costs, especially for advertising, in order to maintain their competitiveness on the local market.
Since February 2020, online shops have seen 25% growth, emerging as one of the few sectors to outperform the pre-pandemic period. Interest in specific products saw significant variations, with ice skates up 104% over the previous year, while gaming consoles, graphics cards and automatic coffee machines saw significant declines.
According to Statista, the Czech Republic is one of the leaders in e-commerce in Central and Eastern Europe, with 86% of Czechs shopping online and 15% selling. This growing market requires constant efforts to retain existing customers, offering quality services and pleasant shopping experiences, including in terms of reliability and data security, in order to respond effectively to market needs.
Sources: https://www.e15.cz/ https://www.intellinews.com/
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