E-commerce in France shows notable anti-inflation effect: Study

The vast majority of French people engage in shopping both in physical retail outlets and online, with e-commerce showing a notable anti-inflation effect, according to a study by Compass Lexecon and commissioned by Amazon. While in-store shopping remains a highly popular mode for French consumers, 42 million people made online purchases in 2022, representing 80 per cent of Internet users. The study highlights the anti-inflation power of e-commerce and delves into how French consumers view e-commerce, its usage, value, and benefits.

Historical data shows that e-commerce growth exerts an anti-inflationary effect, benefiting all consumers. An econometric model demonstrates that each percentage point of e-commerce penetration growth results in a 0.25 per cent decrease in overall prices and a 0.4 per cent decrease for frequently purchased online products. From 2010 to 2019, this growth neutralised the equivalent of one year’s inflation, saving French households a total of €17 billion (approximately $18.16 billion), as per the study.

French consumers widely acknowledge the advantages of e-commerce in their overall shopping experience. These benefits include a vast choice of products, attractive prices, time savings, reduced travel costs, and anti-inflationary effects. Nearly all online shoppers (97 per cent) enjoy at least one of these benefits, with each benefit being cited by a significant majority (between 77 per cent and 89 per cent) of respondents. Furthermore, 60 per cent of online shoppers believe that e-commerce enhances their shopping experience in multiple ways.

The study finds that consumers in rural areas value e-commerce just as much as those in urban areas. Despite lower incomes and internet quality, rural residents purchase online as frequently as the general population and equally appreciate the benefits of e-commerce. Notably, rural consumers are more likely to recognise the ability of e-commerce to save on travel costs, as they are more dependent on cars, motorcycles, or scooters for shopping compared to urban residents.

When shopping online, French consumers identify the vast choice, attractive prices, and time savings as the main contributions of e-commerce. The vast choice is considered the most important aspect by 25 per cent of respondents, followed by savings from attractive prices (20 per cent) and time saved through reduced trips.