The boom of e-commerce in Spain
This is a golden age for the e-commerce in Spain. After a take-off which lasted a decade, the Spanish e-commerce market is now a worldwide leader. What are the reasons for its success? Why should companies and entrepreneurs launched their e-commerce activity there? Here we give you the keys to understand the e-commerce Spanish market and its opportunities.
E-commerce, the future of business
E-commerce, also known as electronic commerce refers to commercial transactions (buying or selling services and goods) pursued online. It includes the transfer of money and data to buy goods and services on the internet. In 2017, the world online sales in BtoC reached $2 304 billion and is expected to rise to $4 500 billion by 2021. About the half of the world population using internet will buy online in 2019. E-commerce is a highly concentrated market with two giants : Amazon, the American e-commerce platform and Alibaba, its Chinese competitor. China is the biggest market for online sales, followed by the United-States and the United-Kingdom. However, some countries benefit from excellent performances like Spain. E-commerce is a growing sector there as the country is the leader in the South of Europe and the fifth country of Europe in the e-commerce ranking. The Spanish e-commerce turnover increases constantly rising from 23,9 billion in 2016 to 28 billion euros in 2017.
Why is e-commerce so popular in Spain?
Although Spain is the twelfth biggest world economy and the fourth biggest one in Europe it is important to remind that the country was severely taken down by the 2008 economic crisis. Back then, the unemployment rate reached the 26%. Even if the situation has been getting better since the end of 2013 with the unemployment going down to 15%, this period had etched into the Spanish memory. Thus, the e-commerce is a good answer to the crisis because it increases the purchasing power of the Spaniards. The price is what motivates them to buy online. Indeed, 71% of the internet users use a price comparator website.They enjoy the low prices and the free-charge deliveries of online buying. This can also be explained because of the internet penetration rate in Spain as 80% of the population uses internet. With its important number of internet users, Spain represents 40% of the e-commerce in the South of Europe. E-commerce is, as everywhere else, a concentrated sector in Spain with a few major platforms. Amazon is the first one, then comes ebay, Alibaba known as Aliexpress in Spain and El Corte Inglès, a Spanish platform that has established itself as the fourth biggest actor of this market. In terms of sales volumes, fashion comes first with 34% followed by the electronic device (30%), books (19%) and then sports, leisures and cosmetics with 16% of the online sales each. However, in terms of turnover, travel agencies and companies related to tourism come first as the amount of the transactions are off course more important than the other goods and services.
Why should a company choose Spain to set up its e-commerce activity ?
Spain is bursting with assets for e-commerce. The retail sales market represents 200 billion euros a.k.a 15% of the GDP but only 4% is made by e-commerce. Thus, there is a real opportunity in doing e-commerce in Spain. The e-commerce in Spain appears to be a solution for more and more entrepreneurs because it is easy for them to set up their activity in Spain as usually small structures and the medium companies are allowed to benefit from an advantageous VAT policy. Rising to 21%, this VAT rate confers to the companies an important competing advantage, allowing them to extend their margins or to adjust their prices to the most aggressive competitors. The banking facilities should be taken into account as well. Many banks in Spain offer solutions for e-commerce. Not only is it easy to open Internet Merchant Accounts but the opening is very fast as it can be done within one or two weeks. It is relevant to underline the important amount of buildings available at extremely competitive prices. Also, if one issue of the e-commerce is usually the delivery, there are plenty of transportation companies that deliver marchandises at a low price. The marketing campaign are also usually cheaper than in the other european countries. Spain can open a few doors as Spanish is the second world language and offers possibilities to reach the e-commerce in South America as many South-american companies have their European headquarters in Spain.
Tips and tricks to set up an e-commerce company in Spain
When it comes to buy something on the internet, the Spanish customer has basically two main reasons for not going to the end of the procedure, because of the price or the payment options. The Spanish online customer is interested in paying goods and services at the lowest price possible. Thus, offering discounts on your website is always a good idea. Ideally, the delivery charge must be free because the Spaniards are used not to pay for the delivery. As regards the payment options on the websites, the Spaniards are quite mistrustful towards payment facilities. Most of them prefer the credit card payment with Visa or Mastercard or paying with Paypal which they consider to be more secured. Guaranteeing security in payment transaction is extremely important. Another key factor is the communication with the customers on the website. While looking at the products, the Spanish customers like to be able to have some opinion and advice on the things they buy. It is interesting to put some clients’ opinions on the products because the customer feels reassured as he goes through his shopping session. A Chatbot enabling the customer to discuss with a professional sailor and to receive advice is also very appreciated by the clients. The Spaniards are also keen on social networks. So offering payment options on Instagram or Facebook is something to take into account. At ESCadrille, we provide our clients, from entrepreneurs to big companies, with tailor-made services for their website. We are fully committed to help you develop your e-commerce strategy. Check our services for our website and communication here : develop a communication strategy and increase performance through digital transformation
Spain is now an unmissable actor of the e-commerce in Europe. The Spanish market is thus a strategic target for the enterprises wishing to develop themselves in Spain but also internationally.