eNET Internetkutató és Tanácsadó Kft.

Christmas Shopping Fever on the Internet

2012. December 21.

While retail sales in Hungary are still struggling, online retailers cannot complain. In the past year 1,6 million people purchased a product online at least once, with sales approaching HUF 177 billion, a nearly 14 % rise compared to last year’s HUF 155 billion. This was greatly facilitated by the emergence of online shopping malls which provide customers with a convenient way to shop on the Internet, reveals eNET – Telekom’s „Report on the Internet Economy”.

Only Online Retailing on the Rise

Online retailing continues to grow steadily despite the outbreak of the recession in 2008 which has heavily influenced retail trade. Even though the total sales of HUF 6,500 billion in 2011 surpassed the level of 2008, this was mainly due to price increases in the food sector. The other sectors were rather characterized by stagnation or a slight decline.

E-retailers, however, are expected to hit sales of HUF 177 billion, an increase of 14 %, accounting for 3 % of the total retail turnover. The majority of their revenues, almost 40%, are again generated in the last two months of the year as a result of the shopping frenzy before the holidays.

In addition, the average value of the online shopping cart is higher than that of traditional purchases. On the Internet a customer spends HUF 7,000 on average on a purchase while only HUF 3,000 in traditional commerce. Online customers are therefore more inclined to spend a bigger sum at one go, encouraged by the fact that most e-stores offer free delivery over a certain amount of spending.

More Women Shopping on the Internet

In the last 12 months 1,6 million customers made at least one online purchase, reveals eNET’s latest survey conducted at the end of the third quarter of 2012. For now, women and men have a balanced representation but thanks to numerous online stores targeting women and promoting impulse shopping, more women than men are expected to shop online in the next six months. E-retailers, therefore, need to be prepared to fulfil the needs of women, making the transformation of websites necessary in plenty of cases.

Top Gifts: Smartphones, Tablets, Perfumes

In addition to toys and books, traditionally popular in e-commerce, the market of technology products has exploded this year, showing an especially high demand for consumer electronics compared to last year. In 2012 online sales of such products are anticipated to reach HUF 15-20 billion. Their success is also explained by the prices set by e-stores which are often 10-20 % lower than in traditional stores, clearly facilitating the growth of the sector.

eNET’s survey also reveals the most popular products of this year’s Christmas season. Similarly to previous years, the popularity of HD televisions remains undiminished but in consumer electronics the real rage is smartphones and tablets. In the last three months of 2012, nearly 200,000 smartphones were sold, the majority of them over the Internet.

Unlike in the previous years, in 2012 online sales of home decoration products, household appliances and articles of clothing play a major role thanks to the emergence of female customers. In 2011, the apparel market was worth only HUF 5 billion but is expected to expand up to HUF 8 billion this year. The online market of household appliances and home decoration products has also experienced a huge boost, potentially generating sales of HUF 15 billion in 2012, double last year’s figure.

Hungarians spend more and more in online beauty stores too. The top product in the HUF 7 billion market is perfumes of which online sales of HUF 1,5 billion are predicted according to the survey.

Ordering Online But Picking It Up In Person

In order to adapt to the needs of masses of customers who are just getting to know online shopping, numerous e-stores have opened showrooms and delivery points. Along with the growth of online shopping, the number of customers picking up their purchases in person has also increased. The same number of people chooses to receive their purchased products personally as opts for using a parcel service, a trend practically unknown in Western Europe where personal receipt is almost non-existent. It may seem strange that so many people order products on the Internet but do not have them delivered to their home or work. According to the majority of online retailers, this Hungarian peculiarity stems from the fact that Hungarian customers still want to inspect products before making a purchase and, due to their high price sensitivity, also try to save on the cost of delivery.

70% of total sales are still paid for by cash, followed by payment by bank card at the time of collecting the product (15 %), bank transfer (10 %) and finally online payment by bank card (5 %).

Online Shopping Malls Emerging in Hungary

This year Hungary has also been part of the international trend of customers not only making occasional purchases on the Internet but also doing their routine shopping rounds online. A philosophy of „everything available at one place” may be built on these shopping activities with a shopping mall-like e-store offering buyers all the products.

A major advantage of such e-stores is that customers can save time and save on the costs of delivery on larger orders. In addition to time and money saved, another important requirement and expectation is a large selection of products.

Responding to this trend, Hungarian online retailers have gradually expanded their selection of products, leading to the creation of the above mentioned online stores where „everything is available at one place”. An increasing number of such online malls has emerged on the e-commerce market, already producing substantial sales. Even though Hungarian retailers are responsible for a mere 5% of total e-commerce, online shopping malls may receive another boost from the planned launch of the Hungarian website of Amazon.com, the biggest of all online retailers.

eNET – Telekom

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