European B2C e-commerce market breaks through €500 billion mark

14 June 2016

The European B2C e-commerce market is this year expected to, for the first time in its history, break through the barrier of €500 billion in turnover, according to new research. Double digit growth in large e-commerce markets like the UK, France and Germany have presided over a boom period for the digital landscape, and according to experts, the ceiling has not yet been reached. The UK can, with an e-commerce turnover of €157 billion, call itself the runaway leader.

The online retail market, has, in recent years, enjoyed rapid growth. The e-commerce market is growing its market share against, and next to, physical shopping, because consumers increasingly expect to shop anytime and anywhere using their laptops, smartphones or tablets. International research shows that especially the markets of the United States and China are enjoying rapid growth, where conditions are favourable for the emergence of the e-commerce market, but also many European countries are seeing the market boom, belonging, according to a study, to the top 20 most attractive e-commerce markets in the world. 

New analysis by Ecommerce Europe – an alliance of players in the European e-commerce sector – shows that in recent years there has been a sharp increase in the turnover of the European e-commerce market. Last year the market reached €455.3 billion, on the back of 13% growth, and while this is impressive double-digit growth, the growth rate was even higher in 2013 and 2012. Between 2011 and 2015 the revenue of online B2C players took off with a compound annual growth rate of 17% (‘CAGR’) – an increase of over €200 billion in online sales.

Size of the European B2C e-commerce market

The researchers, however, predict that the ceiling has by no means been reached. Although growth is expected to weaken somewhat further, the market will continue to show double-digit growth in 2016, with a projected increase of 12%. This would mean that the European e-commerce market will, in the current year, for the first time achieve a turnover of more than €500 billion – more specifically €510 billion. Of this amount, Western Europe will make up the largest segment, with a total of €252 billion, while Central Europe is foreseen to account for €89.5 billion.

A comparison of the top 10 largest B2C e-commerce markets in Europe shows that the UK is out well ahead, with a turnover of €157.1 billion in 2015 – more than a third of the total European market sales. France follows in second place, last year the country saw sales of €64.9 billion, followed by Germany with €59.7 billion. Outside the top three sales of European e-commerce market is much lower, with fourth place Russia accounting for €20.5 billion. Spain closes the top five with €18.2 billion.

Top 10 largest B2C e-commerce markets of Europe

The Netherlands, with a total of €16.1 billion, is in seventh place, just below Italy, with €16.6 billion. The remainder of the top 10 includes Denmark, Sweden and Switzerland. Across the board, the most is spent on travel and holidays, but hardware is also quite often purchased online. The B2C e-commerce market indirectly creates 2.5 million jobs, the researchers estimate, realised by around 750,000 online shops and ventures.

% of GDP
The authors also looked into the total value of e-commerce sales relative to a country’s economic output – Gross Domestic Product (GDP). Again, the UK leads the pack: the e-commerce market amounts to a total of 6.1% of total GDP. Denmark is in second place with 4.4%. The third place spot goes to Finland, where 3.5% of GDP comes from online sales, followed by France, with 3%. The Netherlands is again in seventh place, where 2.4% comes from online sales of GDP in our country. The rest of the top 10 consists of Ireland, the Czech Republic, Norway and Sweden.

European B2C e-commerce market

Despite the growing importance of e-commerce on the global retail landscape, recent surveys reveal that it is not singularly important. Consumers increasingly expect retailers to provide an omni-channel experience, whereby they can use all the different channels, including offline. The physical store therefore, remains important for omni-channel strategies. The trend for both is visible in practice; for example, in the US, pure play giant Amazon recently opened physical bookstores.