The eCommerce opportunity in Germany

When it comes to online sales, Germany comes in second place behind the UK in the European eCommerce race. But the country is a relatively untapped market and full of potential for retailers looking to expand into mainland Europe.

While German e-tailers like Zalando and Otto are seeing continued growth in sales– the former doing particularly well, with 26% increase to €2.2 billion (£1.67 billion) in 2014 – foreign e-tailers are only just beginning to see the opportunities the market offers.

Research from Internet World Germany stated eCommerce is growing, accounting for 15.3% of total retail sales in the country (excluding food),  with turnover standing at around €41.7 billion (£31.7 billion) in 2015, up from €37.1 billion (£28.2 billion) in 2014.

Saskia Muller, head of Internet World Germany, said: "With domestic and international online brands continuing to understand what is important to German consumers and adding value to their services, there's a lot of room for growth in an already mature market."

According to the Internet World statistics, technology is the top performing eCommerce sector, with 20.9% of total sales, while sport and leisure reports 20.2%, and fashion takes 8.9% of total spend online.

Who's made the move? opened the digital doors on its German website last summer, after successful international launches in France, Italy and the Netherlands.

"Our aim has been to create an international brand - as the second largest country in Europe, Germany was always a key target market for us,"'s co-founder and CEO, Ning Li told Essential eCommerce. "The expansion went better than we could have expected, executed almost twice as efficiently as our entry into the Netherlands market in 2014. We’re thrilled with the buoyancy of sales." saw Germany's high population and chic cities as an opportunity, "Each city is filled with design conscious and shopping savvy consumers for us to engage with," added Li.

"The risk for us was low: our existing logistics hub in France allows us to fulfil orders with a low cost entry into the market. It was a big opportunity and low risk – an obvious business decision."

Notonthehighstreet and also launched German websites in September 2014, and the most recent financials for AO look strong, with revenues increasing and predictions in December of annualised revenue of €77 million.

Meanwhile, back in October, Asos CEO, Nick Beighton, said he was about to begin a "tighter focus" on the e-tailer's international strategy, ploughing investments into France and Germany.

Beighton said the reason for the focus on France and Germany is because its eCommerce penetration is accelerating at a greater rate than the UK. Asos is planning on introducing a Barnsley-style warehouse in Germany, which will be able to handle up to 20 million units of stock and next day delivery up to midnight.

"We think those markets will be extremely exciting for us over the next three to five years," he said.

How does Germany differ?

International logistics solutions company, WnDirect, pointed out that after Russia, Germany is the most populous European country with 82 million residents, while internet penetration has hit 87% and continues to growth 2% annually, meaning over 1.5million new users go online every year.

Jonathan Matchett, UK managing director at WnDirect, said it is Germany's mail order heritage which means customers translate easily to online shopping. But it is important to understand that Germans do not spend as much time online as other markets, and have a 'task-driven' attitude to eCommerce.

"While in other markets it is millennials who have embraced all things digital, including eCommerce, it is the over 55s, who lived through a divided Germany and have more disposable income, that are evidencing a willingness to spend to online," added Matchett

Taste uses social media including Instagram and Pinterest to gain insights into new markets, and its Unboxed platform – which encourages customers to upload images of Made furniture in their homes – is another way to understand how people are living in different markets.

Li explained: "We’ve seen that similar furniture styles are popular across all territories but noticed that each market has its quirks. Our German customer base likes mid-century modern and industrial pieces – our best-selling collections in the region are Chicago, Starkey, Chou and Edelweiss."

As well as their tastes, needs to understand German shoppers' preferences to payments and delivery.

"Germans have always been ahead of the curve when it comes to shopping online – they’re familiar with PayPal and online card payments and expect an easy, no-frills return policy," added Li. "They are also thorough; they research, compare prices and propositions. Building trust is critical."

Meanwhile, research from Aimia, stated 69% of German shoppers belong to a loyalty programme (company to 85% globally), suggesting customers in Germany are more likely to shop around. Aimia also noted that shoppers in the market are more sensitive to sharing their data with companies.


WnDirect's Matchett also warned how Germany consists of significant cultural differences to other countries, noting returns being high on the list necessary evils retailers must implement. In fact, free returns used to be required by German law, before this legislation was updated by the EU.

"Germany has one of the highest product return rates with estimates putting the figure at around 50%. This isn't because Germans are necessarily more difficult to please – although they are well-known for their insistence on quality – but because of the strict regulations which protect consumer rights as well as consumer behaviour; so they tend to order multiple colour and size options with the confidence they can return the unwanted items."

IMRG pointed out that Zalando offers a 100-day free returns offer as standard. MD of IMRG and eCommerce Worldwide, Graeme Howe, said: "Germany's returns policy is supported by the open invoice payment method, allowing shoppers to only pay for what they keep. There is an upside to these high return rates however, as conversion rates when offering open invoice typically exceed the European average."

Price and delivery

eCommerce delivery company B2C Europe noted how German consumers are driven by price, especially when it comes to shipping – preferably free. While a third of all German consumers said delivery times, costs, and expensive returns were a barrier to purchasing – 40% of respondents who abandoned an online purchase said the cost of delivery was too high.'s Li concluded: "This customer base cares deeply about quality and sustainability. Making sure they understood our price points – and the business model – was key when we first launched.

"We’ve been clear from day one that our designs retail at accessible prices because we work directly with designers and manufacturers, and that, as an online only brand, we avoid the costly overheads associated with a nationwide chain of stores. While the trade-off is longer delivery lead times, the sales growth we've seen is testament that we’re winning them over."

For more information, click below:


B2C Europe


Internet World Germany