Entering the Western Europe market: all you need to know
Having the courage and ambitions to expand your business to Western Europe? Great, then you’ll probably need in-depth information on the specifics of e-commerce and payments in this region. We’ll explain to you all the details of the Western European market and share some tips on how to enter it quickly and effectively.
Western Europe market trends and specificities
Let’s start with general information. Western Europe has a population of 196 million. The urbanised population is 80% of this number. While determining which countries geographically fall under Western Europe is still a controversial issue, we will stick to the following list: Belgium, France, United Kingdom, the Netherlands, Austria, Ireland, Luxembourg, Monaco, and Liechtenstein.
While e-commerce has just started to gain traction in other regions, the Western European e-commerce market is quite mature. This can be explained by the fact that the large expansion of the internet took place here earlier than, for example, in post-Soviet countries of Europe. Western European countries currently have the highest internet penetration rates in Europe, starting from 92%, which means online shopping is available to almost everyone in the region.
Currently, Ireland is the country with the fastest-growing e-commerce in Western Europe (26% e-commerce growth rate). The rest of the countries lag behind in this indicator, but only because e-commerce was established there earlier. France ranks second after Ireland with an e-commerce growth rate of 13%, followed by the UK with 11%. By the way, the UK has the strongest e-commerce market in Europe — 95% of the UK residents are e-commerce consumers. Also, the Brits spent €52.4 billion on online purchases in 2020.
There’s not much information about e-commerce development in such small-sized countries as Luxembourg, Monaco, and Liechtenstein. However, the high solvency of local consumers makes these countries a tasty morsel for businesses.
What about the most popular e-commerce segments? Nothing unusual here. Clothing and footwear are in the greatest demand among Western Europeans. Then comes cosmetics/skincare and home electronics. The pandemic has also forced more people to buy groceries and pharmaceuticals online. The trend towards online shopping is growing every year, and even the categories of goods that consumers used to buy in physical stores have become extremely popular in e-commerce.
Times are changing, but shopping habits in Western Europe after the pandemic are unlikely to return to their origins, which means that e-commerce will only grow, and more brick-and-mortar stores will move online. Considering that the Western European e-commerce market is already well-established, it is not surprising that consumers’ expectations about the quality of goods, speed of delivery and convenience of payments are quite high. But if you can offer all these things, you are guaranteed to win customer loyalty and successfully gain a foothold in Western Europe.
Preferable payment methods in Western Europe
Despite rapid innovation in online payments, consumers in Western Europe remain loyal to traditional payment methods. The latest e-commerce and payment research shows that debit and credit cards are still the most popular e-commerce payment options in Western Europe, in particular in the UK (preferred by 56% of local consumers), France (55%), and Belgium (51%). The exceptions are the Netherlands and Austria, where bank transfers are preferable.
While traditional payment methods are still in vogue, digital wallets are rapidly strengthening their positions in the top three most popular payment methods among Western Europeans. Thus, e-wallets are used by 25% of e-commerce consumers in the UK, 22% in Ireland, and 20% in Austria. There’s no doubt that this figure will grow significantly in the coming years.
Here’s a list of the leading payment options in Western European e-commerce:
- Mastercard (in the majority of countries)
- Visa (in the majority of countries)
- Cartes Bancaires (France)
- Bancontact (Belgium)
- iDeal (Netherlands)
- PayPal (Monaco, UK, Liechtenstein)
Even if traditional payment methods remain relevant, more and more consumers in Western Europe choose the convenience and robust security of mobile payment solutions. As the older generation adapts to smartphones, this type of payment will become firmly rooted in e-commerce. To make their business accessible to everyone, the merchant will need to set up all payment methods preferred by their target audience.
How to reach the Western European market faster
You already know a lot about the specifics of e-commerce and payments in Western Europe. Now that it’s time to enter the market with your product, a logical question arises: How to quickly adapt to local consumers’ payment needs? Here’s some meaningful information for you.
Western Europe has been having a well-established e-commerce market for many years now. However, local consumers are still hungry for marketplaces with quality and affordable products. Quality of service and delivery also matters. Due to the fact that Western Europeans make online purchases mainly from large foreign marketplaces, delivery delays or payment problems can often occur. Payment issues or inability to pay in their preferred payment method may discourage consumers from online shopping. That’s why creating the best payment experience is the key to gaining a foothold in the highly competitive e-commerce market of Western Europe.
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