Cross-border e-com sales up 32% YoY in Europe in 2023: Survey

European webshops garnered €107 billion (~$115.27 billion) in cross-border turnover in 2023, while the business-to-commerce (B2C) online turnover for goods in the continent saw a 13 per cent increase, reaching €741 billion (~$798.24).

In this sixth edition of the survey backed by FedEx Express and Poste Italiane, IKEA continued to lead the top 500 list of European cross-border e-tailers.

Among the top ten, Ikea was followed by Zalando, H&M, Lego, Zara, Jysk, Lidl, Decathlon, Adidas and Notino.

These top 10 entities represent 19 per cent of the total sales of those in the top 500 list, with IKEA achieving €5.2 billion (~$5.6 billion) in cross-border turnover.

The report highlights a decrease in turnover, underperforming amidst an unstable macroeconomic environment, logistical challenges and intense competition from the United States and emerging Chinese brands like Shein and TEMU, Cross-Border Commerce Europe said in a release.

The gross merchandise value (GMV) of the top 500 saw an 18-per cent decline to €50 billion (~$53.86 billion) in 2023.

The UK’s cross-border sales have fallen to a historical low. The challenges include Brexit-related value-added tax regulations, import duties and logistics complexities. Consequently, Germany has now surpassed the United Kingdom as the leading cross-border market in Europe.

There is a noticeable shift within the top 500, with an 8-per cent increase in brand manufacturers like Lego, Nespresso, Adidas and Philips enhancing their direct-to-consumer channels. Despite these changes, pure players and marketplaces remain stable, holding 42 per cent of the top 500. Fashion, jewellery and footwear continue to dominate with a 39-per cent share.

The top 500 European marketplaces are losing ground to US and new Chinese contenders, including marketplaces and social media apps, unable to match the scale and agility of these emerging giants, the report notes.

Faced with aggressive pricing and an overwhelming array of products from Chinese e-commerce platforms, European companies must prioritise quality, reliable delivery times, community engagement and localised services, the report suggests. These elements are crucial for maintaining a strong position in their respective markets amidst fierce competition, it notes.

The influence of Shein on major European fast fashion retailers such as Inditex (Zara) and H&M appears to be significant, yet these companies are holding their ground.

Zara’s strategy of closing underperforming stores aligns with broader industry trends, similar to those adopted by H&M. Inditex is focusing on enhancing its digital and hybrid offerings, while expanding its more successful outlets, showing resilience against the rising Chinese influence.

Social commerce platforms like TikTok Shop and Instagram are not just trends; they represent the most significant market disruption since the advent of the Internet.

It is imperative for European sellers to embrace social commerce to remain competitive in the evolving retail landscape, the report adds.

Fibre2Fashion News Desk (DS)