The largest economy on the European continent and second only to Russia in terms of population size, Germany promises significant growth opportunities to young e-commerce businesses.
However, if small businesses are looking to take advantage of expanding their e-commerce in Germany, there are a few factors to bear in mind first.
E-commerce in Germany: what sellers should know
German e-commerce growth has accelerated in the past few years, partly aided by the pandemic, but also due to widespread smartphone penetration amongst the public. Germany ranks second in terms of e-commerce popularity, just behind the UK.
Sellers do need to be careful however, as some reports claim that as high as 50% of e-commerce orders get returned by German customers, so it’s important to ensure that you have a robust returns system in place.
E-commerce in Germany also comes with an unexpected complication relating to preferred payment options. German customers have traditionally paid for services via invoice. With increasing smartphone usage across the country, e-wallets are becoming gradually more popular. But in 2021, 22% of customers still prefer to pay via invoice, so e-commerce sellers should partner with a payment provider that can easily enable this service for customers.
It’s also worth noting that a reported 43% of e-commerce shoppers regularly purchasing online are between 20-39 years old, so promotions targeting young professionals and first-time parents are worth testing out.
Best sites for e-commerce in Germany
Although some of the most popular online marketplaces aren’t unique to the German market, a few most certainly are. According to a 2019 ranking by the EHI Retail Institute, the top three German online marketplaces are:
- Launched in 1998
- Revenue of €10,490,800,000 EUR
- The success of the site is largely attributed to its emphasis on the German language, which makes consumers feel more comfortable when shopping online.
- Launched in 1995
- Revenue of €3,359,600,000 EUR
- A rare example of a 20th-Century retailer that has made a huge success of transitioning into the e-commerce space, the Otto company was initially incorporated in 1949.
- Launched in 2008
- Revenue of €1,621,800,000 EUR
- Starting up right in the middle of the financial crisis, Zalando’s emphasis on free delivery and a 100-day right of return saw it become a huge fashion platform.
Importing products into Germany
The German government lists three significant considerations businesses must take into account when importing products into Germany.
- Restrictions: if the goods you’re looking to import are restricted by the German authorities.
- Duties and taxes: if you’re shipping goods from a non-EU country, there may be duties and taxes to pay. Excisable goods (alcohol, tobacco and mineral oils such as petrol) are subject to their own taxes.
- Procedures: unless otherwise specified, all goods must be entered for a customs approval procedure.
Once items have been successfully imported to Germany, they are free to be sent around the EU.
Importing from the UK
Rules have changed considerably in light of Brexit. Although the EU signed a Free Trade agreement with the UK which is now in effect, there are some significant differences importers should consider. The EU-UK Trade and Cooperation Agreement provides detailed guidance on the rules and regulations you'll need to be aware of.
Importing from further afield, including Asia
Germany is also bound by Free Trade Agreements signed with other countries, including China, Singapore, Australia and New Zealand. Importers should check the specific regulations that apply to them for each individual country and region.
Making the most of e-commerce in Germany
There are numerous reasons to expand your e-commerce business for the German market. However, successful sellers will need to keep in mind and prepare for the unique preferences of German customers.
If sellers do their research, and partner with businesses that enable easy e-commerce in Germany, there is no reason they can’t expand into a lucrative market. By serving customers in a booming sector, e-commerce sellers can grow their small businesses across German platforms.
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