What is the specificity of the German market? Top 5 categories in e-commerce

E-commerce platforms in Germany are gaining increasing popularity year by year. Local sellers are taking note of this. Nearly 45% of companies operating online shops also have a sales account on #Amazon, over 36% on eBay, and almost 15% on kaufland.de. German manufacturers and resellers are increasingly leveraging the potential of multi-channel sales. Statistical data indicates the dominance of several product categories that have been the most popular among online shoppers for several years. These include, among others, home furnishings, cosmetics, and electronics. However, these are not the only factors that Polish sellers should consider in their sales strategy. Do you want to understand the specifics of customers from across the western border? Find out how to prepare offerings that are attractive to German consumers.

The most popular product categories

In 2021, the top 5 among the most popular product categories on German Amazon included:

Home

Drugstore and Personal Care

Clothing

Sports and Leisure

Garden.

Fig. 1 The most popular categories on amazon.de in 2021

Source: Unternehmer:innen der Zukunft - KMU Report Deutschland, https://assets.aboutamazon.com/0f/9a/d8c2696b464d929dcb7a670c98ec/amazon-kmu-report-deutschland-2022.pdf

Compared to the previous year, there were significant changes. In 2020, clothing was in second place, and health and personal care came in third. Sports goods and toys rounded out the list. This was, however, a unique period for the entire #e-commerce industry, as strict operational rules were in place in retail, and some stores were closed for many months due to the pandemic. The current market is heavily shaped by these factors, as many consumers have been forced to shop online over the past two years. As a result, consumer habits have changed, and over 40% of Germans shop online more often than once a week. In 2019, this percentage was just over 33% (fig. 2).

Fig. 2 Increase in the number of German consumers shopping online from 2019 to 2021

Source: https://www.bevh.org/fileadmin/content/05_presse/Pressemitteilungen_2022/26012022_PM_PK_final.pdf

For sellers from around the world, this means that the German version of the Amazon platform and other marketplaces have significant potential that they can exploit. There is little likelihood that consumers who have discovered the advantages of online shopping will return to traditional physical stores. It should be acknowledged that the upward trend will continue, although it will likely be on a smaller scale than in 2020.

Leading sectors in German e-commerce

Data for 2021 indicates that in the segments of Fashion & Accessories, as well as Electronics/Consumer Electronics, the share of online trade exceeds 40%. In the first case, it accounts for 23% of total e-commerce sales, while in the second - 24%. Next came the Leisure & Hobby category with a result of just 15%.

Fig. 3 Share of individual sectors in online trade in Germany in 2021

Source: https://www.netz98.de/blog/b2c-e-commerce/e-commerce-studien-prognosen-wohin-entwickelt-sich-der-b2c-onlinehandel/

An important piece of information for Polish manufacturers and resellers is that in 2021, compared to the same period the previous year, there was a decline in foreign supplier turnover from 7 to 5.4 billion euros. The causes of these unfavorable changes were the introduction of new regulations concerning exemptions from import sales tax and Brexit. Another important indicator characterizing consumers from across the western border is the 30% increase in the number of internet users aged 60+ shopping online. Thus, the prolonged coronavirus pandemic has resulted in the e-commerce sector also becoming attractive to customers who previously preferred traditional retail stores.

The specifics of the German consumer

A 2022 e-commerce market study in Germany conducted by Pattern indicates that out of 1000 respondents, as many as 96% ordered products from Amazon at least once in the previous year. German customers on this platform place great importance on several factors that influence their purchasing decisions, such as:

Local, sustainable production

Certifications

Diverse selection.

Show that you care about sustainability

Nearly 1/3 of consumers think about sustainability in the context of the product they are ordering at the purchase stage, and 60% admit that this topic is close to their hearts. This is undoubtedly one of the most important trends that will help boost sales in Germany. Producers can utilize the support of certifying institutions that will confirm product quality, a low carbon footprint, or the eco-friendly origin of materials. Sellers on amazon.de can benefit from the Climate Pledge Friendly designation. Obtaining one of the certificates recognized by this platform allows, among other things, to confirm:

High quality

The producer's commitment to protecting the climate and natural environment

Transparency of processes - informing about adherence to specific norms and standards by the manufacturing company.

Such documents increase consumer trust in your products.

Prepare offers for mobile devices

In 2021, ordering products via mobile devices: smartphones and tablets was the norm. Purchases via mobile phones accounted for over half of total online sales, with less than 40% of orders coming from desktop computers and laptops, while 7% were from tablets. How can you leverage this information? When planning titles, texts, and graphics for the product page, remember that most of your potential customers will be viewing them on a small display. It is crucial to note that the growth of mobile sales over the two pandemic years reached 56.5%, resulting in 40% of total revenues in e-commerce in Germany in 2021 (a 10% year-on-year increase). The most frequent online shoppers via mobile phones are internet users aged 14-29. Before making a purchase decision, they use:

Search engines

Product pages on e-commerce sites

Social media

Apps.

to compare available offerings. Social media is gaining an increasing share as a source of information about products and services. From 2017 to 2021, this increased by 350%.

Ensure regular promotional actions

Customers love promotions, so even if you reduce prices by a few percent, you can gain a higher conversion. Regular promotions on selected models or collections encourage consumers to:

Familiarize themselves with your assortment

Recommend you as a seller to their friends

Frequent visits to the store, Brand Store, or auction page.

The most important dates of the year for deal hunters are, however, two specific days: Black Friday and Cyber Monday. Sellers in the e-commerce sector note significantly higher turnover during this period. In 2021, in Germany, it reached 5 billion euros.

Considering that in September of this year, the inflation rate in our western neighbor was as high as 10.9%, it can be presumed that interest in promotions will further increase. Consumers will wait for Black Week to buy a new phone, household appliances, and Christmas gifts at a lower price. For e-commerce sellers, this will mark the beginning of annual harvests that will last until mid-December.

Focus on the attractiveness of the offer

What else is worth paying attention to? Among the key factors that will ensure stable sales are:

Attractive prices

Building loyalty

Well-prepared offers.

Certainly, high-quality content is crucial in the purchasing decision-making process: comprehensive product descriptions and attention-grabbing graphics. This statement is not groundbreaking, but it directly results from analyzing offerings on popular German marketplaces. Imagine you are comparing two hammers. One is described as "550 g carpenter's hammer," while the other is "fiberglass carpenter's hammer with a stainless steel head" and is presented in an attractively graphic form. The first lacks any additional description, while the second provides information regarding the tool's use, its utility features, precise dimensions, and country of origin. Which description looks more credible: A or B?

A:

B:

Source: brgfx, https://pl.freepik.com/

Remember that even the simplest and most mundane items can be presented in an interesting way. Take this opportunity to increase conversion rates. Describe all the benefits and properties of the offered item and include graphics. 36% of German consumers believe that product description and images have the greatest impact on their purchasing decisions. Right after them comes the price (33%), while product reviews hold the third position with 21.7%.

Amazon's position in the German e-commerce market

In the German e-commerce trade, Amazon holds a leading position. 94% of online shoppers make purchases on this platform, and 70% of the turnover is generated by Prime customers. Additionally, 1/3 of those ordering on this marketplace account for half of all online orders. In 2021, 88% of Germans used the offer on amazon.de, while 5% on amazon.co.uk and amazon.com. Customers notice many advantages associated with shopping with the American e-commerce giant, including:

More attractive prices than competitors - 63%

Faster delivery - 43%

Availability - 42%

Ease of use of the platform - 41%

Membership in Amazon Prime guaranteeing short and efficient delivery times - 35%.

About 700,000 sellers operate on the German version of the portal, including about 90,000 local entrepreneurs, and twice as many come from China. From 2019 to 2021, their number nearly tripled from 240,000 to 691,000. Many of them engage in multi-channel selling. Despite such significant competition, there are niches that can be filled. The most important step before deciding to enter this marketplace is to analyze market potential. Such an analysis can be prepared by a professional Amazon agency, which will advise based on data regarding a specific category whether it is worth taking the risk.

Summary

The German e-commerce industry is benefiting from the growing popularity of online shopping. Year by year, the number of sellers and customers on sales platforms, online stores, and people ordering products through social media is increasing. Despite changes in the top 5 categories enjoying the most interest, it can be assumed that in the coming years, a large portion of consumers will continue to buy home furnishings, cosmetics, electronics, gardening items, toys, jewelry, and clothing online.

In 2021, as many as 58% of Germans made spontaneous purchases. Younger people and women are more likely to engage in unplanned spending. These customers prefer ordering clothing, books, furniture, and decorations. Men tend to place unplanned orders for televisions and MP3 players as well as other electronic equipment. Most transactions involved products that had the best bargain price. However, keep in mind that for many of them, other factors are also important, primarily the appearance of the offer and sustainable production.

Amata Borys-Chudek

Go2Market Crew

Sources:

E-Commerce-Markt Deutschland 2021, https://de.statista.com/

https://d39w7f4ix9f5s9.cloudfront.net/14/03/1d4e69a448dab348e9acddff3a0b/kmu-report-deutschland-2021.pdf

https://www.bevh.org/fileadmin/content/05_presse/Pressemitteilungen_2022/26012022_PM_PK_final.pdf

https://etailment.de/news/stories/Deutsche-kaufen-gern-und-spontan-13509?crefresh=1

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