eNET Internetkutató és Tanácsadó Kft.

No crisis in Hungarian e-commerce: New sales record in 2009

2010. August 06.

penztarcaIn 2010 electronic retail sales in Hungary are expected to continue growing, totaling approximately 130-135 billion forints, compared with 99 billion last year and 61 billion in 2008, a GKIeNET survey reveals. Online sales now account for over 1.6% of all retail sales in Hungary, and this rate keeps increasing exponentially.

Online retail sales

Due to methodological considerations, the survey conducted among the 2,700 online stores using shopping cart systems does not include travel and insurance-related transactions on the world wide web. As a result of the economic recession, a growing number of consumers have become increasingly price-sensitive, and internet users willing to shop online tend to surf the web for the best deals. The growth will likely be split evenly between old and new market players.

Figure 1. Online retail sales between 2001 and 2010 (in millions of forints)

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Source: GKIeNET


Market concentration

Data from 2009 indicate that stores with an average of over 1,000 visitors per day dominate the market, accounting for some 90% of all online sales. Changes over the past two years as well as  expectations for the current year point towards stable market conditions for the most frequently visited online stores, which are expected to hold steady or even improve in the future.
The market of domestic online stores continues to be highly concentrated, and this feature is not expected to change any time soon. Companies with sales figures above 100 million, representing as little as 3% of all market players, account for over 90% of the total online retail sales.
Some of the stores in the sales brackets of under 5 million, 5-20 million and 20-100 million climbed a step higher in 2009, which indicates that a number of market players are becoming stronger. Nevertheless, many new companies will presumably enter the market in the lowest sales bracket. Given that the largest stores show steady revenue growth rates and the new market entrants will most likely remain in the lowest sales category, market concentration is not expected to change considerably between 2009 and 2010.

Figure 2. Estimated number and total sales of online stores by revenue brackets

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Source: GKIeNET

Online store features

Based on the 2009 sales data, the most popular product groups include food, meals, drinks, computer and telecommunication devices, electronic entertainment products as well as books.
Considering all transactions, the average value of a purchase amounts to approximately 11,000 forints.
There are considerable differences among the categories in terms of the weight of Christmas sales: the greater the average number of daily visitors, the lower the weight of sales in the last two months of the year.
Sales volume in the final two months of the year is somewhat higher than the average two-month figure. At the same time, this period provides opportunities for smaller and relatively newer stores to catch up, or at least survive.
In 2009 only 1.3% of all online transactions and purchases proved to be fraudulent or erroneous. Although this reflects a slight increase from previous years (0.5-0.9%), it is safe to say that the percentage of fraudulent or erroneous orders is relatively low in the domestic online retail market. Owing to the easy comparability and the prevalence of publicly available customer ratings and reviews, the majority of online stores strive to achieve the highest possible customer satisfaction.

Online customers

At year-end 2009, 42% of the Hungarian population aged 14 years and over (approximately 3.5 million people) spent a minimum of one hour per month on the internet. This reflects a 6 percentage point increase from the preceding year. 12% of the population purchased products or services via the internet over the past year. Within the category of regular internet users (one hour or more per month), 29% made at least one purchase on the world wide web.

In 2010 electronic retail sales in Hungary are expected to continue growing, totaling approximately 130-135 billion forints, compared with 99 billion last year and 61 billion in 2008, a GKIeNET survey reveals. Online sales now account for over 1.6% of all retail sales in Hungary, and this rate keeps increasing exponentially.

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RESEARCH THEMES
Bonus/Coupon, e-commerce, e-government, e-finance, e-tourism, Electronic Communications, Frequency, Information Society, Information Security, Internet Subscriptions, Internet Economy, Internet usage, Internet Access, Internet Penetration, Internetbank, Internet Commerce, R&D, Christmas, Social Site, Media, Mobile Payment, Mobile Purse, Mobile Shopping, Mobile Internet, Mobile Games, Mobile Phones, NGN, Smartphone , Online Games, Online Shopping, PC, Tablet, Telecommunication Spending, TV, Video Sharing, VoD