All you need to know about DACH eCommerce

What is your experience with DACH eCommerce??

Cross-border trade and localization offer many advantages to emerging markets such as Switzerland, Austria and Germany, which export hundreds of thousands of packages a month to Israeli consumers. According to the United Nations COMTRADE database on international trade, Israel imported US$5.71 billion from Germany in 2021.

Understanding DACH eCommerce is essential for any online retailer to succeed. The excess of information can be overwhelming, in this article we have explored the market in depth and will help to better understand the tremendous potential that exists in the DACH market.

Over 100 million potential customers make online purchases regularly in the DACH market, which consists of Germany, Austria and Switzerland. These are rich countries with a high internet penetration. It is not time-dependent that the eCommerce market in DACH countries grows quantitatively. The reason for this is that it has experienced very accelerated growth in the last two years in eCommerce thanks to the Covid-19.?

eCommerce in Germany has grown to become the third largest market in Europe. German citizens buy 92% of their products online, according to the "eCommerce in Europe 2020" report, while Austria has just over 9 million residents, 85% of whom purchase items online at least once a month. Then there is Switzerland, where 90% of users have purchased an item online at least once a month.

Purchases made online via a mobile device

Statista reports that over 20% of all online purchases in Austria are made using a mobile device, indicating that more than 2.6 million Austrians use smartphones to browse. About half of all German purchases are made on mobile devices. It is estimated that the mobile eCommerce market will reach €54 billion by 2023, according to 摩根大通 . By the end of the year, eCommerce will account for 27% of the overall sector in Switzerland.

Austria's eCommerce market grew by 9.4% per year; Germany's eCommerce market is expected to grow by at least 9% or more until 2023, showing that the DACH countries' eCommerce market is growing broadly.?Over 25% of growth will be achieved in Switzerland in 2022, making it the country that stands out most.

Buying abroad - under certain conditions

German consumers do not shop cross-border as much as Europeans do. Germany's customers only purchase products from foreign stores in 35% of cases. It is due to Germans' distrust of foreign stores and preference for German-language stores. Austria has a slightly different situation. Approximately 50% of Austrian online purchases are made in international stores. Among the DACH region, Switzerland is clearly the leader in cross-border purchases. Over 60% of their online purchases are made in foreign stores.

According to the World Bank, the average annual purchasing power of an individual in Germany and Austria is around 24,000 euros as a result of significantly higher living costs, the Swiss equivalent is 42,000 euros. Although DACH countries have a slow internet speed, they do have good infrastructure, an educated workforce, and a digital infrastructure that connects consumers to the internet.

The eCommerce landscape of the DACH region

Germany

Internet usage is very popular among Germans. The average German consumer spends five hours and twenty-six minutes online each day. Approximately 17.3 billion online minutes are generated each day by all German consumers (16-64) on average. Although Switzerland, Austria and Germany are experiencing similar growth rates in their respective eCommerce markets, each is growing at a different pace.

Austria

Thanks to its strong economy, Austria ranks 23rd in the World Bank's GDP ranking. Almost 5.2 million people in Austria use the Internet to purchase products such as household goods, and textile. A total of 9,000 Austrian retail stores were operated by online retailers in 2017. During the past decade, the number of online stores has tripled. Since the turn of the century, Austria has become one of the nations with the highest online shopping numbers. Not to mention that online sales accounted for 4.3% of the total Austrian retail volume.

Switzerland

Switzerland has one of the largest shares of Europe's eCommerce sales in spite of being one of the smallest countries. The Swiss economy is still developing and finding its place in the European market, despite not being a member of the European Union or the European Economic Area (EEA). 90% of the population uses the internet regularly, and 95% has shopped online at least once. Switzerland's online sales reached 7.4 billion euros in 2017. It is more likely that Swiss people shop online on foreign sites than they are on sites from other DACH countries, unlike the Germans. Despite the disproportionate rise in cross-border sales, cross-border sales increased by 23% in 2017. In addition to lower prices, foreign websites offer a greater variety of products and are less available on local platforms. The majority of Swiss online shoppers shop in France, Germany, and China.

Online payment

As opposed to English-speaking countries that heavily rely on credit cards, German eCommerce favors open invoices. Buyers benefit from this since they do not need to pay in advance. Once the order is sent, the customer has the option of trying the product. They can then return the goods or pay within the agreed time, which is usually between 2 and 4 weeks. When it comes to payment, the most common methods are purchase via PayPal, direct debit and credit cards.?

Many sites accept bank transfers or invoice/buy now pay later. Online customers have the right to cancel orders and return products or services within 14 days, for any reason and without justification.? As a result, Germany is known for its high return rate, especially in the fashion industry, where 32% of product purchases were returned in 2021.

SEO in Germany

Recent studies have indicated that there are more than four billion internet searches per month in Germany. Of these 37% were one word searches, 32% were two word searches and 25% were three or four word searches. As is the case in other countries, the search terms are becoming more and more descriptive and detailed. And that's why longer keywords lead to higher quality results in search engines.

About half of all online searches in Germany are for local information and entertainment options. Not far behind, at 45% of searches is a category described as company, computers and electronics. The third most popular search term is travel, which accounts for 33% of internet searches in Germany.

Germans prefer online content that is descriptive and prefers it to have a local flavor rather than a global one. Indeed, German consumers are very loyal to their manufacturers and prefer to buy products made in Germany. In this regard, they are similar to Japanese customers, who also prefer indigenous companies.

Logistics in the DACH area

There is a significant effect of eCommerce on logistics due to its rapid growth. To meet the changing needs of eCommerce businesses and consumers, logistics and infrastructure are crucial to the success of online sales and delivery of goods. This seems to have been well understood by the countries of the DACH region.

As eCommerce grows, suppliers also seek to improve the quality of their services by expanding their logistics networks. In order to achieve this, they invest in infrastructure management centers. In addition to upgrading existing facilities, new sorting and delivery centers will be established. All these continuous improvements make the DACH region one of the leaders in the field of e-logistics and not only in Europe. In terms of logistics performance indicators, the DACH region is one of the best in the world.

The logistics performance (LPI) is the weighted average of the country scores on six key dimensions: The efficiency of the clearance process (i.e; speed, simplicity and predictability of formalities) by border control agencies, including customs; Three times in a row, Germany has topped the LPI scale compiled by the World Bank of 160 countries around the world. In less than a decade, Austria rose from 22nd to 4th. In 11th place, Switzerland maintains its position. Regardless of how you look at it, these numbers are a dream come true for local eCommerce.

The average German recipient receives 24 deliveries a year - much more than residents of other European countries. The number of packages received in Austria and Switzerland is still relatively low -? Austria receives 14 deliveries a year and Swiss with 9 per person per year. Surprisingly, after the order is completed, according to the eCommerce shipping study 2018, the German online retailer is less interested in the customer; For example, they cannot choose a preferred supplier or delivery time. Only 10% of customers receive information about the estimated delivery time, others simply cannot do anything else just hope that the courier will reach them.

Gaash Worldwide specializes in transporting cargo to Europe and other regions. A wide range of services are available with us, including return, customs clearance, warehousing, distribution centers, and international logistics solutions.

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