The Czech Republic is one of the youngest nations in Europe, making it all the more surprising that it is emerging as one of the growing markets in European e-commerce. Whilst the powerhouses of Britain, France and Germany are starting to slow down in their markets, newer and smaller nations such as the Czech Republic are finding new ways to stay relevant in the e-commerce market, visible by their improvement in J.P. Morgan’s Global Payments Trends Report for this year.
To give more insight into the country’s business, the number of online shops went from 3,900 to around 40,000 in 2017. Its e-commerce market now worth a total of 4.4 billion euros, and is estimated to increase at a rate of 16% each year until 2021.
The sites that make up the majority of the Czech online stores would be domestic ones, whereas shopping services of other countries tend to be very unpopular. Due to this, online shoppers have higher expectations for delivery times, 75% either expecting or choosing same-day delivery, yet only 6% would consider purchasing a premium service for this need. That said, local brands hold the advantage of not needing to import goods or add additional shipping prices, leaving non-Czech brands with a need to update their business model if wishing to remain relevant in this territory.
The Czechs have made sure not to ignore the advantages of mobile commerce either, with it now making up 54% (or 2.4 billion euros in sales) of e-commerce within the country.
Despite all this, there are still some problems the Czech Republic will face. Cash is currently the most popular way to make payments within the country, making up 45% of transactions, which puts the country behind many other markets in that area. Focusing purely on cash will limit merchants when it comes to matters such as payment delays or additional required costs.
Whilst credit cards aren’t very popular, debit cards have shown some usage with an annual growth rate of 19.2%, making it apparent they will be seen as a fine second option when some businesses need more flexibility than cash-only payments.
Despite having some problems to tackle, this rising star nation in e-commerce seems set to show how well a small nation can function in the market with the proper steps in internalising it in the most efficient manner.