Hungarian e-commerce companies closed another excellent year in 2014 as the net turnover of the country’s electronic retail (e-tail) sector came to HUF 273 billion (~ EUR 884 million), exceeding all previous expectations. This figure equals 3.7% of the total retail turnover, reveals the latest research conducted by eNET Internet Research Ltd amongst webshops. The survey results were announced at a conference of the Association for E-commerce – SzEK.org.
E-commerce without limits
Hungary’s e-tail sector once again boasted strong performance in 2014, reaching a HUF 273 billion (~ EUR 884 million) net turnover and continuing a long trend of growth. The figures are clearly promising as the net online turnover went up by a considerable 26% compared to 2013. This growth seems to have put the country’s e-tail sector on a track of even faster expansion. Then again, this is not surprising as more and more large international companies announce the opening of webshops in Hungary.
As further good news for online retail traders, the sector’s share grew within the total domestic retail volume as well, from 3.1% in 2013 to 3.7% in 2014. What also gives rise to optimism is that the average cart size rose significantly as well, exceeding the HUF 10,000 (~ EUR 32.4) psychological barrier in 2014.
Figure 1: Net online retail trade turnover in Hungary
Source: e-tail supply-side research by eNET, April-May 2015
Cash payment still unbeaten
Hungarian online shoppers still prefer cash when it comes to paying for goods ordered over the Internet. The dominance of cash partly stems from consumers’ preferences, probably supported by the possibility (introduced in February 2014) of the free withdrawal up to HUF 150,000 (~EUR 486) from any domestic ATM in one or two monthly instalments. In view of the 65% share of payment upon delivery (with cash or bank cards), the conclusion is that customers still prefer paying for a product once they have it in their hands and can be sure that they get what they pay for.
Figure 2: Payment methods by the total value of purchases in 2014
Source: supply-side e-tail research by eNET, April-May 2015
The dominance of payment upon delivery also means that most of the products are delivered by couriers. Nevertheless, the popularity of delivery points where buyers can personally take over their parcels is expected to gradually increase in future. These include not only staffed stores operated by partners but also parcel dispenser machines, which have been mushrooming across the country. These devices are convenient as they are there to serve customers round the clock.
Open doors – on Sundays, too
Due to a new legislation mainly physical shops have been closed on Sundays for almost three months now, but the webshop doors are still open wide. Consequently, e-commerce companies are not gloomy: even though the majority expects no turnover change due to the closing of physical shops on Sundays, 36% project obvious growth. The main advantage is that online shops can now entice away consumers who have so far spent their money offline only. And a customer who has tried buying goods over the Internet may well become a regular online shopper.
Full steam ahead
In view of the past tendencies, one may ask where the limit is, i.e. how long the steady expansion can continue. In recent years, more and more large international companies arrived in Hungary to launch their webshops. And this process is expected to continue for 3-4 years. The outlook is positive: the growth is here to stay over the medium term, with no slowdown in sight as yet.