In a few areas, the Internet era and new technologies have proven to be as significant as in retail and it seems that the popularity of shopping from the comfort of your own home has also arrived in the traditionally cautious Czech Republic. These changes are very strong.
While only 5% of Czechs shopped online in 2004, we are now comparable to a European-wide average of about 53% in terms of online shopping. We still lag behind the record setting English (81%) and the Danish (79%), but this situation may not last too long. Jan Vetyška, the head of the Association for Electronic Commerce (APEK), said in an interview with Hospodářské noviny that sales in the first half of the year exceeded the threshold of 50 billion and that it can be expected that it will exceed the annual threshold of 100 billion for the first time ever with the addition of pre-Christmas purchases. In some areas, for example in the availability of e-shops, we are even in first place. 35% of Czech companies with more than 10 employees offer the possibility of ordering goods and services online, which is almost double the European average. Thanks to new specialized Internet services, creating e-shop and administering them has been greatly simplified, so their number can be expected to rise further in the future. The popularity of online purchases is growing so fast that economists are beginning to seriously address the question of whether to close down brick and mortar stores like in the US, where Internet retail industry giants like Amazon are seriously threatening the traditional pastime of shopping in the nation’s shopping malls. Why have we become addicted to Internet purchases?
Why do we shop?
When we marvel at the fact that the Czech economy is improving and people are generally buying more, we find that one of the main reasons for the growth of online stores is that we have got used to it. This is particularly true for older generations that grew up in the pre-Internet era, and online purchases and online payments that just until recently were considered to be risky. It may not seem to be the case, but Czechs take the risk of online fraud very seriously, and a SC C survey carried out for the Czech Banking Association has revealed that we consider making a purchase in an unsecured e-shop to be risky business. Because of this wariness, seniors have so far been the least frequent users of online stores. According to last year’s data of the Czech Statistical Office (CZSO), about 60% of respondents in the age group from 16 to 44 regularly shop on the Internet. For people over 55, it is only half, and for seniors over 65only less than 10%. However, these figures are likely to change as the literacy rate among Internet users is rising and the reputation of e-shops and the fear of online payments are declining (this year, for the first time in the Czech Republic, more transactions were made by credit card than cash on delivery). After reducing this mistrust, one can assume that older people will use on-line purchases very often. Why? The latest survey entitled State of E-Commerce in the Czech Republic, 2016 shows that besides the ability to compare products and their prices quickly and easily, the convenience of home shopping on Internet is the most appreciated. It is precisely the elderly who appreciate the opportunity to make bigger purchases and having the goods delivered to them at home. We have all loved it and we are using it more and more often. The range of goods we buy is also increasing according to this.
What do we buy?
The existing charts of goods purchased online have always been dominated by electronics, home appliances and home, flat and garden goods. However, the composition of the assortment has started to change over the last few months. Jan Vetyška of the Association for Electronic Commerce said that while the popularity of food shopping grew most with a rise of up to 50%, people also enjoyed buying drugs, cosmetics, drugstores and pet supplies. Compared to the past when purchases were made on the Internet in bulk or we were looking for a way to save money, we are increasingly buying daily consumer goods, which saves our time and effort. This is also explained by the fact that in the Czech Republic for the first time in history, more women shop online than men.
Will we keep shopping?
Shopping in e-shops is a matter of course every day. How will it look in the future? It can be assumed that the number of users will continue to grow and that the stores themselves as well. This is shown by the fact that there are a lot of e-shops in the Czech Republic but they are relatively small. The survey of the Czech Republic portal showed in the data that the annual turnover of the vast majority of e-shops (over 90%) does not exceed CZK 50 million. Yet analysts point out that this is a healthy situation in comparison to the markets dominated by several giant e-shops, which helps contribute to competition and gives room for rapid development. Even the operators themselves see the future positively. A full 40% of Czech e-shops are planning to expand to foreign markets, especially in the east to countries such as Ukraine or Romania, where the e-shop market is still unsaturated and where it is easier enter the market. In short, shopping on the Internet has settled in and Czech e-shops are doing well, even so much so that almost half of their operators do not even think about setting up a brick and mortar shop, and half of the retailers who have shops have given up on plans to build new branches thanks to online sales. We do not have to worry about the disappearance of classic shops, but the Internet will play an increasingly important role in our consumer behaviour.
What an e-customer looks like
- The 25-34 age category shop online the most, with purchasing age (and positive attitude to modern technology) declining.
- APEK statistics in 2015 indicate that we purchase the bulk of goods and services from domestic e-shops (72%). We order 20% of goods in Europe and 8% come from the rest of the world.
- According to the statistics from the Zboží.cz portal, the most frequently purchased items are footwear, clothing and fashion accessories and tickets for cultural or sporting events.
- Online purchases are most frequently made 4-8 times a year and spend between 11,204 and 56,000 CZK per year.
Source: The Czech Republic in data http://www.ceskovdatech.cz
Senior project manager
Leisure, Regional & Special Projects