Are you looking to expand your e-commerce business to Germany? It’s certainly one of the most attractive markets in the EU.
Based on the number of people online regularly, disposable income, and growing interest in online shopping, Germany offers one of the biggest market opportunities in Europe. We believe that e-commerce companies that have unique products, have validated the German market, and take a long-term strategic approach to the market can succeed in a big way despite there being significant competition.
Basic E-commerce Stats For Germany
E-commerce is a big part of shopping in Germany, and over 50% of ecommerce in Germany happens on international websites.
Germany Market Size:
- 59.87 Billion Euro in 2015
- 5th Largest ecommerce market in world
- 2nd largest ecommerce market in Europe behind the UK
Internet Access: 68 Million
Online Shoppers: 37 Million
Largest Online Industries: Clothing, Electronics, Books
Growth: The German e-commerce market grew from 24.6 M Euros in 2012 to 52.79 M Euros in 2015, and is estimated to be at 62.45 M Euros by the end of 2016.
Success Factors Unique To Germany
There are some important cultural differences you’ll need to be aware of and plan for when looking to be successful in Germany. There is one very important umbrella factor that impacts all aspects of e-commerce ranging from your website, the products you sell, the payment options you offer, to the logistics and delivery companies you work with – and that factor is TRUST.
There are many elements of trust that matter to the German consumer. As a whole, Germans are skeptical of new and unfamiliar companies and brands. That means that Germany is not really a great test market, so you’ll want to have your products, processes, and services well defined before trying to launch in Germany. You’ll also want to be diligent on your product and market fit research prior to going live.
One good way to test out the market at a lower cost and develop a loyal following is to start in local online marketplaces like Amazon Germany or one of the many European-based marketplaces. There are many marketplaces to consider across Europe, as you can see in this fantastic map from Bundesverband Onlinehandel.
In order to earn trust, here are some important areas to be trustworthy in.
Commitment To The Market
It may take some time to gain the traction you’re looking for in Germany since your company will be unknown initially. Over time and with great products, strong ratings and reviews, clear payment and return policies, people will begin to trust you.
We highly recommend testing which aspects of localization lead to higher conversion rates. The companies that are succeeding in Germany have taken the time to localize for that specific market. Localization can include partial or full translation of landing pages or the entire site, localized look, feel, and user experience, local pricing, local address and phone number, localized product mix, localized online advertising, localized SEO, email, customer support, and even logistics such as local delivery services.
One powerful way to signal that you’re not committed to the market is having an ecommerce site that has not been at least partially translated into German. Having the price for a product listed in a foreign currency is one of the top reasons for shopping cart abandonment around the world, and this is especially true in Germany.
If you’d like some help with localizing your ecommerce site, Globig’s Expansion Planner software guides you in localizing your products, ecommerce web and mobile site.
Reduce Risk For Your Customers
What are some of the most common perceived risks that keep shoppers from completing their online purchases?
German online shoppers worry that:
- your company is not legitimate and you are a scam
- you don’t follow ethical business practices
- your product isn’t high quality or that the value for what they paid is too low
- your shipping prices are too high
- your return address is in another far away country
- you are not transparent with pricing early in the sales process
- you won’t guarantee and stand behind the products you sell should they need to return it
- it will take too long to receive your product
- their credit card data isn’t safe
- their personal data isn’t safe
- they will get spam emails going forward
- they will be taken advantage of
- they will be made to look foolish for trusting you
- finding and communicating with customer support will be frustrating
…and the list goes on.
Here are some ways to reduce these risks and help people get over their fears of purchasing from you.
- Provide a guarantee or money back offer for a limited time. See what competitors do and match or surpass their guarantees
- Tell the story about how your company got started, share who you are, have a personality that identifies you as special and trustworthy.
- People in the EU are used to having the final price listed on a website instead of the pre-tax and pre-shipping price, as is common in the U.S. Present your prices as inclusive of shipping and tax and be clear about that fact.
- Provide a clearly stated warranty and return process should the product break down.
- Become a member of Haendlerbund in Germany, which is a local trust mark you can use on your website once you qualify.
- Have a local German return address or at least a location in a country nearby. Germany is often a logistics hub for EU countries.
- Quality shipping is an expectation by German shoppers. Offer different shipping types including free shipping and handling, next day, and 2 day.
- Use a local carrier in Germany such as DHL. Each state will have several great local delivery options.
- Follow the online regulations for ecommerce in Germany, such as having a Cookie and Privacy Policy (See the Globig.co Knowledge Base for Germany to get the details on ecommerce, cookie policy, privacy policy, and other important regulations).
- Follow regulations on data privacy, data transfers, and email marketing.
- Allow customers to select how and how often they would like you to communicate with them via email or push notifications on their mobile phone.
- Have legitimate product reviews and ratings on your products.
- Have customer service representatives and live chat available who communicate in their language and their business times.
- Feature product endorsements from well-known people and testimonials from real Germans who love your company.
- Work with legitimate and secure shopping cart systems. Use their secure shopping icons as proof to reassure new customers.
- Provide alternative payment options such as pay upon ‘Invoice’ and direct debit.
- Make sure your marketing is localized and relevant, pay attention to regional holidays. There are significant differences in holidays between the north and southern Germany. You can get more information in the Globig.co Knowledge Base for GermanyKnowledge Base for Germany about holidays and cultural expectations.
Germany is a large and highly attractive e-commerce market. If your product appeals to the German consumer, with planning and following the suggestions we’ve outlined for you in Part #1 of E-commerce in Germany article, you are on your way to success as an e-commerce business in Germany.
In Part #2 of E-commerce in Germany, we’ll review payment options, supply chain logistics such as shipping into and out of Germany, warehousing, VAT, and important back office issues.
More E-commerce Resources For Germany
https://solvers.ups.com/assets/UPS_Pulse_of_the_Online_Shopper.pdf
201 Global Retail E-commerce Index
How to market in Germany
https://platform.globig.co/knowledgebase/DE
E-commerce In Germany
Worldwide E-commerce Revenue Stats
