Coverage

Mintel’s Online Retailing – Europe - July 2016 focuses on the five major economies in Europe, though we do also include estimates for 13 smaller, but important economies in the Executive Summary – the Market section. In total these countries account for around 95% of all European retail sales, excluding Russia. E-commerce is developing at different rates around Europe. Germany and the UK lead the way, but even in some of the major economies, notably Italy, it is still remarkably underdeveloped.

The report provides market size data and forecasts for 18 European countries from 2011 to 2021, and includes profiles of 22 major online/multichannel retailers.

The five major economies are looked at in detail: the UK, Germany, France, Italy and Spain are each covered in separate country sections, which are also available for purchase as individual reports. These countries include extensive consumer research commissioned exclusively for our report(s).

Consumer research

Mintel commissioned extensive consumer research in the UK, Germany, France, Italy and Spain.

In each of these markets, we asked a representative sample of internet users:

  • Which devices (laptop/desktop, tablet or smartphone) respondents had used to buy products online in the last 12 months;

  • Which retailers they had bought from;

  • If they agreed with certain attitudinal statements to do with personalisation, service and delivery, especially Click & Collect.

In the UK, were able to look at these matters in more detail and we also asked people what they bought online and we asked them more about the customer journey.

Market definition

This is a report about shopping online – in perhaps simplistic terms, it is about (almost) everything you can buy in shops. It does not include services or downloads. Nor does it include any B2B activities. Those are covered in a recent Mintel report on B2B e-commerce – UK - June 2015.

Our market sizes and forecasts are for all retail sales transacted online. But we make the distinction between sales by store based retailers and those by retailers who only trade online (or do the majority of their business online). For the former, we think that online is an integral part of the store-based retail proposition and that it is artificial to make a distinction. For the pureplayer, online is the only route to market and every visit to a website has to be paid for through marketing.

One of the features of the development of e-commerce has been the growth of “marketplaces”. These are umbrella organisations that allow small retailers to trade more effectively. The largest is eBay, but a growing proportion of Amazon’s business is also transacted in this way. eBay is not a retailer in its own right, however it may appear so to online shoppers.

There are substantial grey areas in these definitions. For example – should something that is ordered online but collected in-store (Click & Collect) be included. And what about Argos’ “reserve and collect” service – if something is ordered online, but collected and paid for in-store? One should not get bogged down in such fine detail and we think that the answer is that we follow the companies in how they define it and in how they make their returns.

What matters is the overall service to customers and not whether they fit into a neat classification.

Our national market sizes are for online retail spending by consumers in each country so they include any purchases from non-domestic retailers (i.e. cross-border). An exception to this is the UK report, where we use ONS data as the basis of our market size. ONS data is based on returns submitted by retailers in the UK, so will exclude online sales where these are fulfilled by a company based outside of the UK but is likely to include sales by UK companies to any overseas customers.

Market sizes are quoted including VAT.

The online market sizes (excluding the UK and Germany, where we use bevh figures) in Online Retailing – Europe - July 2015 are proprietary Mintel market estimates. The basis for these estimates is described in the Executive Summary – the Market section.

Methodology

This year we follow the methodology developed in 2015 to calculate the size of the e-commerce market in individual European countries in order to more accurately reflect the size of the market.

For most markets in Europe there is very little data about the e-commerce market. But some things are clear. One can tell, for example, from those figures published by retailers and from Eurostat data where a market is quite underdeveloped. We have therefore used data from well researched markets (such as Germany and the UK) to help us estimate the size of the less developed markets.

Financial definitions

The definitions used in this report for company performance are:

  • Sales: Turnover as reported by the company, excluding VAT.

  • Operating profits: The profit made on trading after all associated costs and depreciation, but before any exceptional charges and financing costs.

  • Pre-tax profits: Operating profit less finance costs and any exceptional charges, but before tax and dividends.

  • Operating margin: Operating profits as a percentage of sales.

Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland.

VAT rates

VAT rates were raised in many countries during the downturn, but there have been no further changes since France edged up its rate from 19.5% to 20% on 1 January 2014.

Figure 1: VAT rates around Europe, 2011-16
01-Jan-11 01-Jan-12 01-Jan-13 01-Jan-14 01-Jan-15 01-Jan-16
% % % % % %
Austria 20 20 20 20 20 20
Belgium 21 21 21 21 21 21
Czech Republic 20 20 21 21 21 21
Denmark 25 25 25 25 25 25
Finland 23 23 24 24 24 24
France 19.6 19.6 19.6 20 20 20
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Abbreviations

B2B Business-to-Business
B2C Business-to-Consumer
C2C Consumer-to-Consumer (sales)
CAGR Compound Annual Growth Rate
COICOP Classification of Individual Consumption According to Purpose
CPI Consumer Prices Index
DACH Germany, Austria, Switzerland region
DC Distribution centre
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