E-commerce sales in Germany fell significantly last year according to new data from Bundesverband E-Commerce und Versandhandel Deutschland.
The e-commerce association (bevh) found that for the first time, gross sales of goods fell in double digits by 11.8 percent to €79.7 billion, after reaching €90.4 billion the previous year. In addition to sales generated by telephone, fax or other ordering media, total e-commerce sales in 2023 were €93.6 billion, falling short of €100 billion for the first time since 2020.
Gero Furchheim, President of bevh and Spokesman of the Board of Cairo AG said: “We expect that German e-commerce will bottom out over the course of the year. With a decline of 7.1 percent, the fourth quarter of 2023 was the first quarter with only a single-digit decline since early summer 2022 and indicates that sales will stabilise in the future. Last year, online retail was strong in product groups such as clothing and entertainment items, where German consumers particularly saved money.”
Sales of digital services
Part of the decline can be attributed to digital services such as holiday bookings or concert ticket sales which increased by 12.7 percent to €12.7 billion last year. Despite the rise, this was significantly lower than the previous year when sales of digital services rose by 39.9 percent to €11.25 billion.
Although sales remain 62 percent higher than before the outbreak of the pandemic, the proportion of regularly active online customers who made purchases within the last seven days fell to just 34.3 percent. This is significantly less than in 2019, when the annual average share was around 40 percent and further below the average of the past four years.
Despite this, bevh notes that the order frequency per customer is showing cautious signs of improvement and has even moved slightly upwards in the last three quarters.
Consumers turn to used goods
One of the biggest trends of 2023 was consumer willingness to buy cheaper but well-preserved used or ‘preloved” goods, especially among younger people and families. Among 19 to 29-year-olds, 18.4 percent of those surveyed said they ordered used products online “more often” and 31.9 percent “occasionally.”
Skepticism towards cheaper foreign providers is also currently falling: when asked whether customers are willing to buy from foreign shops when the prices are lower, 22.1 percent “completely” agreed, significantly more than 16.8 percent which did so in 2022.
Acknowledging the challenges ahead, bevh and the EHI Retail Institute said that for many retailers in the near future it will be a matter of not only surviving the economic and political climate but also laying the foundations for new growth. In their joint assessment, however, they predicted an end to the downward trend over the course of 2024 and nominal sales growth in the overall market of 2.0 percent for the year as a whole.
“Companies that are now streamlining their processes, optimising costs and focusing even more closely on customer needs now have the chance to come out of the crisis stronger and grow above the overall trend in retail,” Lars Hofacker, Head of Research E-Commerce at the EHI Retail Institute said.
