This week, we’ll be analyzing the French online retail market trends and sharing our insights into the local market. But before all, let’s go over a few facts about the French economy and demographics in general.
French economy and demographics in a nutshell
- Population: 67Mn
- GDP: $677Bn
- GDP/capita: $41,287
- Urbanization: 81%
- The service sector employs 70% of the workforce
- Welcomed 90Mn tourists in 2018
E-commerce in France
In 2018, $101.5Mn was spent by online shoppers, according to a Fevad report. This number accounts for 9.3% of the total retail sales.
The Internet penetration rate is around 92%, and 3Mn people started using the internet since 2018. While on the other hand, e-commerce penetration is at 69%. These numbers indicate that there is a lot of room for growth. Statista forecasts a 75% penetration rate for 2023, meaning, roughly 4Mn new users will enter the market.
Trends in the local market
The most purchased product category is fashion as of January 2019. By 2022, the fashion category will value $22Bn.
Furniture, household appliances, and groceries experienced the fastest growth among all the product categories.
As e-commerce growth continues, businesses started converging their digital and physical stores, resulting in the ‘phygital’ trend. These hybrid stores attract more attention than pure online or offline stores.
57% of online shoppers prefer payment via credit and debit cards, and more than half of them use Cartes Bancaires. PayPal comes next with 25%.
Home delivery is the most preferred delivery method (83%), but pick-up points close to customer home address become more and more popular (66%).
The click-and-collect stores, which provide a hybrid solution to delivery costs and speed, especially for grocery shopping gained popularity in the local market.
Advantages of doing business in the local market
First of all, the country is located at the center of Europe, and naturally, at the heart of global trade routes.
Logistics facilities are highly developed in the country, therefore, transportation is not an issue for businesses.
Most recent OECD economic snapshot point to a sharp rise in the purchasing power, and a general increase in internal demand.
80% of the consumers compare prices before buying non-grocery products, and they can be integrated into the market.
Tips on e-commerce in France
There is a shift from PCs to mobile shopping and any e-commerce retailer should develop/upgrade mobile their platforms for more satisfying user experience.
The French government imposed an additional 3% tax on online retailers, but small businesses are exempt from it.
Companies that make €750Mn ($832Mn) globally and have €25Mn sales in France will be collected a 3% tax.
The finance minister of the French State, Bruno Le Marie stated,
“We’re being confronted with the emergence of economic giants that are monopolistic and that not only want to control the maximum amount of data, but also escape fair taxes. It’s a question of justice.”.
The tax targets big companies and raises dissent among American technology giants like Amazon, but it also helps SMBs stay in the competition.
French economy grows and the growth is driven by the increasing internal demand. The rising purchasing power of French citizens and the advancements in technology create a fertile business environment. Our insights on the market:
- Fashion will be the leading product category and will value $22Bn in 2022.
- Click-and-collect stores gain popularity as they offer a solution to the costs and the time consumed by home delivery.
- Hybrid stores attract more customers than pure online and offline stores.
- 3% tax levied on big companies level the playing field for small businesses.