Entering the Central & Eastern European market: business and payment trends
E-commerce continues to take shape in Central and Eastern Europe, opening up many opportunities for business expansion. So, before you solemnly enter these countries with your product, studying the basic payment norms and specificities of the Central & Eastern European market is essential. We’ll help you with this.
Let’s take a closer look at the general trends in Central & Eastern European e-commerce and what payment methods local buyers prefer.
Central & Eastern Europe e-commerce market overview
The countries of Central & Eastern Europe are very different politically, culturally and economically. Accordingly, people’s ways of life and payment preferences also vary greatly. The pandemic has also had a huge impact on the e-commerce and payments world, forcing businesses to quickly rethink their approach to selling and switch their focus to online. In their turn, customers learn how to shop without brick-and-mortar stores.
As of 2020, the e-commerce growth in Central & Eastern European countries was estimated at 17% in Bulgaria, 30% in Romania, 11% in Russia, 26% in Ukraine, 17% in the Czech Republic, 11% in Germany, 16% in Hungary, 11% in Poland, 9% in Slovakia, and 13% in Switzerland. This means Romania now has the fastest-growing e-commerce market in Central & Eastern Europe, while Austria, Slovakia, and the Netherlands are lagging behind in this aspect. However, such low growth rates in the countries mentioned above compared to other European countries indicate that the e-commerce market was already formed there earlier. For example, let’s look at the online shopping rates in a couple of European countries over the year — 25.4 million consumers shop online in Poland and 61.2 million in Germany. Besides, German consumers spent €62.8 billion on online purchases in 2020. In this regard, Germany now has the strongest e-commerce market in Central & Eastern Europe.
Despite the closed borders and the inability to travel during the pandemic, airlines and hotels remain the most popular e-commerce segment almost in all Central & Eastern European countries. Clothing and footwear ranked second. Plus, people’s demand for online grocery and pharmaceutical purchases had grown significantly. This can be easily explained by the fact that during the most active spread of the virus, it was safer for people to get products delivered to their homes than going to the physical store.
In addition to the coronavirus, such a rapid development of e-commerce was also influenced by the digitalisation and the introduction of the 5G network. Most Central & Eastern European countries have a digitally mature population which determines the high demand for both online shopping and digital payment methods.
Popular payment methods in Central & Eastern European countries
Globally, by 2024, digital/mobile wallets as a payment method in e-commerce are expected to grow to 51.7%, while the use of debit cards and bank transfers will decline to 19.0% and 11.1%, respectively. The same situation is in Central & Eastern Europe. Digital/mobile wallets usage is expected to grow from 26.4% in 2020 to 29.9% in 2024, but credit card usage will increase only from 18.9% in 2020 to 19.0% in 2024. That means debit/credit card payments will remain the preferred payment method for a long time to come, but digital payments will spark a big push. On the other hand, bank transfers are still prevalent in Switzerland (56%) and Poland (53%).
What influences the formation of payment preferences among European consumers? First of all, the rapid development of e-commerce and online shopping required new, non-cash payment methods. Although credit and debit cards are still in favour, the younger generation and active smartphone users have already switched to digital/mobile wallets. The next factor is internet penetration, which is still quite low in some countries, such as Ukraine (67.6%), Bulgaria (71.0%), Moldova (76.1%) and very high in other countries, such as Germany (94.0%). All these factors should be carefully considered before entering such a large and diverse market.
Here is the list of the most popular payment methods in Central & Eastern European countries:
- Mastercard (the majority of countries)
- Visa (the majority of countries)
- PayPal (Bulgaria)
- Paysafecard (Poland, Romania, Czech Republic, Slovakia, Slovenia)
- Maestro (Moldova, Belarus)
- American Express (Croatia, Hungary)
- Przelewy24 (Poland)
- EPS (Austria)
- Mir (Russia)
- Sofort (Germany)
- Privat24 (Ukraine)
How to enter the Central & Eastern European market
As you can see, the Central & Eastern European e-commerce market is versatile, and it’s quite challenging to adapt. Thus, merchants should weigh the pros and cons of entering this demanding market and ensure that rapidly changing consumer needs are met. The critical thing you need to do for successful sales in this region is to provide your Central & Eastern European audience with preferred payment methods. Creating a positive customer experience with multiple payment options will build trust in your brand and help you quickly gain a foothold, even in this competitive market.
Are you ready to go global and offer your products and services to consumers in Central & Eastern Europe? Then it’s time to expand your payment options. Do it with Corefy — a payment orchestration platform that helps businesses set up and manage multiple payment methods at once. Explore our product by trying the demo.