• Jonas S. Müller

The Growing E-Commerce Market in Germany And the Unused Potential of Foreign Online Shops

Updated: Mar 16, 2021

More and more Germans buy online

More and more people nowadays shop online. As we have shown in one of our previous articles about the e-commerce market in Germany, this trend is also clearly observable in Germany. In 2019, 80 percent of people in Germany stated that they used the possibility to shop online in the previous year (2018). The size of the revenue in Germany's online marketplace reached in the meantime a remarkable sum of more than 65€ bn for B2C goods in 2019. The current corona crises escalates this trend even further. People in Germany and elsewhere increasingly shop over the internet, and that even more in the future.

Percentage of people in Germany who purchased in the previous year online

Source: Eurostat [isoc_ec_ibuy]

Check out how we will help you to kick-start and boost your online sales in Germany

Unused potential to sell online to Germany from abroad

In addition, internationalization is also arriving in the digital marketplaces. In our previous article, we have found out that an increasing part of Germans is buying from foreign online shops. In 2005 a solid 23 percent of all German online shoppers bought from foreign shops online. in 2019 this number has skyrocketed to 37 percent. We categorized online shoppers as people who purchased online in the previous 12 months for private use. However, we believe there is a lot of potential left for foreign online shops.

In this article, we want to show you that compared to European online shoppers, Germans are more hesitant when it comes to buying from online retailers located in another country, as you can see in the following chart.

Percentage of online shoppers in Germany and the EU

that bought from sellers abroad (other EU and Non-EU countries)

Online shoppers: people who purchased online in the previous 12 months (private use)

EU 15: data for 2019 not available

Source: Eurostat

Even at intra-EU trade, Germany's online shoppers are falling behind their European peers (see chart below). That means, when it comes to shopping from an online shop from another EU country, Germans seem to be somewhat reluctant to buy from foreign retailers. And that despite the common market and its harmonized laws with no trade barriers (imposed by governments). This finding is quite remarkable since Germany is the market into which many European (online) businesses focus their exports. Hence, more foreign online shops should focus on the still untapped opportunities of the German online market and less on smaller European countries and their online marketplaces. Therefore, neither administrative trade barriers nor lack of supply can explain the notable restraint of German's shopping behavior towards foreign online shops which means that there are serious business obstacles for foreign online shops selling to Germany.

Percentage of online shoppers that bought from sellers from another EU country

Online shoppers: people who purchased online in the previous 12 months (private use)

EU 15: data for 2019 not available

Source: Eurostat

Conclusion: foreign online shops have huge potential in Germany but face business obstacles

So, there are fewer online shoppers in Germany that buy from foreign online shops than in the EU, whether it is about buying from European or non-European countries. At the same time, online shopping from foreign countries is rising in Germany. This finding leads us to two conclusions:

First, foreign online sellers have an enormous not yet utilized potential in the slowly but steadily increasing internationalization of Germany's digital marketplace.

Second, it appears there are some business obstacles for foreign online shops selling to German customers. But what are these obstacles? We have categorized these obstacles into two primary reasons. There are two major barriers. First, perceived logistical issues by German consumers. Second, and most importantly, Germans have a trust issues towards foreign online shops.

So, make sure you read more about the two barriers to find out how to jump over the hurdles to unleash your potential in Germany!