Slovaks Switching Increasingly to Internet Shopping
Internet retailing recorded strong growth in 2012 enjoying increasing popularity among consumers and retailers alike. As the economic situation in Slovakia shows no signs of improvement, consumers are increasingly exploring and welcoming new opportunities to save money.
Searching for goods, product reviews and mostly better prices on the web is becoming increasingly popular as more people trust online shopping. As the number of computer-owning households and internet access increase, consumer demand is also continuing to rise. Furthermore Slovaks are very open towards online shopping abroad, because prices in local e-shops are often considerably higher than abroad. This makes for example the Czech Republic a very popular online shopping destination as practically no language barrier exists between the two countries while Germany and the UK are also popular.
Multiple internet retailing product types recorded value growth of over 20% in 2012. These include apparel, consumer appliances or other internet retailing, where computer hardware and software, for instance, are tracked. Digital gaming through internet retailing was the fastest growing category of 2012, recording growth of 47% to reach sales of €2 million.
Internet retailing is continually taking away business and customers from both bricks-and-mortar retailers as well as other non-store retailers. Within non-store retailing, internet retailing in 2012 was responsible for 71% of total non-store sales in Slovakia. Homeshopping catalogue sales are being affected the most by the rapid expansion in online shopping. M-commerce (internet retailing from mobile phones) is building up in Slovakia as the number of smartphone owners increases. Even so, online payments from mobile phones are not very popular as consumers rely more on other mobile devices, such as tablets. The ability to pay with smartphones in selected stores will be available in Slovakia only from mid-2013.
Traditional bricks-and-mortar retailers feel increasingly threatened by the popularity of online shopping. Consumers visit retail stores simply to try out or see a product, which they then purchase online at a lower price. Traditional retailers are therefore continuing to build up an online presence, either by operating their own internet shops or simply keeping consumers updated by sharing information about special deals, promotions and discounts.
Internet retailing in Slovakia is expected to grow at a constant value CAGR (compound annual growth rate) of 22% to reach sales of €1,274 million by 2017. Slovaks are not expected to significantly change their shopping habits online over the forecast period (2013-2017), even though their financial situation is expected to noticeably improve from 2014 onwards. The continuing improvements in computer literacy amongst consumers as well as increasing broadband internet penetration in Slovak households will positively benefit internet sales.
Even though the majority of Slovak households are already connected to the internet, many consumers are still relatively reserved about shopping online and are exploring it tentatively. Consumer interest in online shopping is seeing dramatic increases as consumers increasingly compare products and prices online. Internet retailing growth in Slovakia is expected to strengthen sales growth in constant terms. Strong internet sales growth will require an improvement in macroeconomic and socio-economic indicators in Slovakia, such as unemployment, which currently plagues the market and which is set to continue rising in 2013. Nonetheless, future growth prospects of internet retailing are very positive, although weakening purchasing power can and will limit sales growth. Consumers in Slovakia do not use loans to finance their shopping needs as is the habit in most Western economies, which is why stable incomes are essential to local consumers. Poor quality services of internet retailers could also be a potential threat to the category as they could severely hamper internet retailing sales growth in the future.
Other internet retailing is expected to record the highest growth over the forecast period with a constant value CAGR of 31%. Other internet retailing encompasses sales which are otherwise not captured in other Euromonitor International projects, such as computer hardware components sold separately, software sales, computer and sport accessories. Consumer appliances is likely to record the second highest growth over the forecast period with constant value CAGR of 21%. Consumer electronics and video games hardware internet retailing is also expected to record solid growth with a CAGR of 14%. All product types of internet retailing are likely to achieve growth during the forecast period.
For further information, please contact:
Julija Maceviciute, Communications Assistant, Euromonitor International
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