Czech Republic E-Commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Czech Republic E-Commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

In Europe, the e-commerce business has grown quickly over the past few years, giving online retailers in many different fields exciting new opportunities.The Czech Republic is a big e-commerce market and one of the largest consumer markets in Europe. It has grown steadily over the past few years.During the projected period, the e-commerce market in the Czech Republic is anticipated to register a CAGR of 9%.

• Czech consumers are considered sensitive to two aspects: price and quality. Prices are usually quality standards, but the Czechs still prefer cheaper solutions. As with ecological and healthy products, local brands in the country are getting more attention. E-commerce solutions are intelligent solutions that facilitate cross-border shopping, and people in the country look for cheaper alternatives in foreign markets.
• During the COVID-19 outbreak, a significant number of people used online shopping. After the pandemic, the change persisted as e-commerce evaluated consumer preferences and purchasing patterns and provided a variety of incentives, like fast home deliveries, to keep these loyal customers.
• The country has established itself as a dynamic and new field for e-commerce. International traders can retain their own by providing citizens with a more established e-commerce infrastructure than Czech traders.
• Cash payments are still an essential feature of this market. International merchants must focus on providing cards to overcome this, as this method will overtake cash by 2023. The Czech Republic's e-commerce distribution market is developing rapidly. Click and collect is an important feature, but there are also options for quick couriers. Foreign merchants can set themselves apart from their domestic competitors by providing secure and simple digital payment options and fast and reliable delivery.
• The Czech National Bank increased the benchmark interest rate to 7% in June 2022 after the inflation rate hit 16% in May 2022. These factors are preventing e-commerce from providing more discounts or robust promotional offers. Because of rising inflation, the Czech populace has less disposable cash, and they are less inclined to make frivolous purchases. This will affect the revenue that e-commerce platforms make.

• The COVID-19 outbreak and the nationwide blockade had a big effect on retail businesses around the world, especially in-store models.However, e-commerce is one of the few sectors in which consumer interaction is increasing in many segments. With the closure of non-essential stores and the enactment of national closure orders, many companies were forced to quickly adapt and respond to changing consumer priorities. Some markets in the Czech Republic's e-commerce sector have grown significantly.
• A survey indicates that 6 million people in the Czech Republic prefer online shopping. In 2020, 54% of people were using the internet; by 2025, it's predicted to reach 65%. The most demanding area in Czech e-commerce is the fashion business, which generates about 29% of the country's total income. Electronics and media come in second at 28%. The Czechs favor using the COD (cash on delivery) option for payments. Cash payments make up 36% of all e-commerce payments.

• Many individuals are turning to online shopping due to the widespread use of smartphones in the nation. According to a study done in the Czech Republic, young people mostly use smartphones to make online purchases, while middle-aged adults (ages 25 to 45) use both smartphones and tablets. In contrast, the majority of people still use desktop computers.
• Czech consumers are becoming more interested in cross-border e-commerce as a result of the increased variety of things they can purchase that aren't offered locally and the cheaper price points that are offered. Some of the goods Czech consumers buy via international e-commerce include digital and electronic gadgets, clothing, jewelry, watches, and cosmetics. Breuninger, a fashion and leisure retailer with headquarters in Germany, has opened an online store in the Czech Republic and will deliver orders in 3 to 5 days. Following a rise in demand for the brand among Czech consumers, action was taken.
• Awareness towards health and nutrition post COVID-19 pandemic changed buyer preference towards organic and natural ingredients. A report published by the service health department in the Czech Republic showed 81% of buyers shop for organic food through online channels. The frequency of online purchases further increases with the higher income of respondents, from around 72% for respondents with a monthly family income up to CZK 20,000 to 86% for those who earn above CZK 50,000 per month.

The Czech Republic's e-commerce market is moderately competitive, with a few significant regional players. The competition is also increasing with newcomers to the e-commerce industry and is trying to expand the market to gain market share.

In April 2022, more than 40 million euros were spent by Alza.cz on the construction of its new logistic hub. The e-commerce company also made an investment in AutoStore technology, which will reduce delivery times and boost warehouse productivity.

In April 2022, with intentions to expand into other nations and invest in technical improvements that would allow automation of fulfillment centers and electric mobility, Rohlik Group, one of the market leaders in online grocery delivery services, raised 220 million euros. After 90 minutes of receiving an order, the online grocer delivers 85% of them.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support