Business

Czech Republic is Europe’s fastest-growing e-commerce market

The Czech Republic is the fastest-growing e-commerce market in emerging Europe.

According to J.P. Morgan’s Global Payments Trends Reports 2019, e-commerce growth as a whole across the European region remains strong but it is slowing in more mature markets such as the United Kingdom, France and Germany. However, a number of smaller markets are emerging, like the Czech Republic, which is investing in e-commerce in different ways, representing unique opportunities and challenges for the payments industry.

The Czech Republic has one of the highest numbers of online stores per capita in Europe. In 2017 alone, the number of Czech online shops increased by 3,900 to reach 40,100. Its e-commerce market is worth 4.4 billion euros, and is projected to expand at a compound annual growth rate of 16 per cent to 2021.

Domestic sites are the most popular with Czech online shoppers and as a result, cross-border shopping is poor, with only 15 per cent of Czech shoppers having purchased an item from abroad. As a result, expectations around fast delivery are high: three out of four customers request same-day delivery. However, only six per cent of Czech consumers is willing to pay for a premium delivery service. International sellers will have to hone their delivery offer and pricing to be able to compete with local brands, which can deliver promptly and cheaply while bypassing any import delays.

Mobile commerce is already well-established in the Czech Republic and now accounts for the majority, 54 per cent, of all e-commerce transactions, or 2.4 billion euros in sales.

However, the country faces some of the biggest hurdles to modernising its payments landscape. The Czech market stands out for its high levels of cash usage. Settling payment on delivery with cash is the most popular way to pay in the Czech Republic, representing 45 per cent of transactions. This causes problems for merchants who face delayed payment, as it is received on delivery, and also the additional costs associated with the collection.

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