With its well-developed infrastructure and high capita income, Europe is a good choice for cross border sellers to do business. Germany, as the third largest electricity supplier market in Europe, is attracting more and more sellers. So, How is the German electricity supplier market situation?
Germany's E-commerce Market
1. Broad Market
According to the forecast by IFH Cologne, the German e-commerce research institute, in Germany, the e-commerce retail industry will have a value of 73.3 billion euros by 2020 and e-commerce will make up nearly 15% of the total retail sales.
2. High level of consumption
Germany is the largest economy in Europe with a population of 80 million, nearly 20 million more than that of the United Kingdom. GDP per capita is nearly 50,000 US dollars, the Internet penetration rate is 83%, the online shopping population is 81%, and the average annual online shopping consumption is $ 726.
3. Local Logistics
90% of Germans like to home delivery, delivery methods and time is the most important point for them. Eighty-three percent of consumers said they will decide whether or not to buy a item based on the seller's logistics evaluation. Moreover, 55% of consumers believe that the standard delivery time (3-5 days) should be free postage.
Major German logistics providers include Depost (Deutsche Post), DHL, DPD and others. Deliver from Germany to the major European Union countries costs generally 2-7 days , the local goods delivery in Germany is usually 1-3 days.
4. High Profits
German is prior in manufacturing industry, the Germans do not believe in good quality but cheap, and have a higher quality requirements. They are willing to pay for high-quality goods, the profit margin is much higher than the United States, the British market.
5. German e-commerce platform
Amazon, Otto and Zalando control the German e-commerce retail industry. These three companies accounted for 44% of total sales of Germany's top 100 e-commerce companies.
6. Mode of Payment
Although PayPal is widely used in Germany, the most common online payment method in Germany is invoice, that is, after receiving the payment notification sent by the seller, consumers pay according to the amount and account written on the notification. It is reported that 58% of online shoppers in Germany give payment after the placing the order. In addition, 34% of Germans are used to paying by credit card, including MasterCard, Visa and American Express.
Shopping characteristics of German
1. High Shopping rate
E-commerce solutions provider, B2C Europe's research shows that 70% of German consumers every month at least bought a physical product online, becoming Europe's most frequent online shoppers. German online shoppers cost 10% more than consumers in neighboring countries.
2. The high return rate
The study shows that: Germany is one of the countries with the highest return rates, the return rate as high as 50%, it is not because the German is difficult to serve, but because of strict consumer rights protection regulations and consumer behavior , Many people in Germany tend to buy multiple colors and sizes, after receiving the product and trial, return the unwanted products.
What products sell well in Germany?
Consumer electronics and fashion products has a very high penetration rate in German e-commerce rate. However, Germany is a powerful automobile manufacturing country, and the auto parts market should not be overlooked. Among the 54.2 billion U.S. dollars in the automotive market in Germany, about two-thirds of parts and components are expected to reach 20% by 2025.
What do German e-commerce providers need to pay attention to?
As mentioned above, Germans love to return goods. Therefore, having a local return address is very important. It not only increases your potential customers but also allows you to control the cost of returns. There are also service providers in Germany who specialize in such services, and using service providers can ease the cost of setting up sellers' own warehouses.