Expansion is stalling as businesses and consumers face persistent financial issues
Italy’s ecommerce market is far from mature—but it’s already struggling to maintain momentum, recent data suggests. According to the April 2014 Casaleggio Associati report, “E-commerce in Italy 2014,” business-to-consumer (B2C) ecommerce sales, including mobile and travel, reached €22.3 billion ($29.73 billion) in 2013. The rate of growth plunged compared with 2011 and 2012, however, when the market grew by 32% and 12%, respectively.
The development of ecommerce in Italy seems to have been hit hard by the economic downturn there. And that squeeze is continuing. Economists had hoped that results in late 2013 and Q1 2014 signaled a return to GDP growth for the country, but in mid-May 2014, a preliminary quarterly report from Istituto nazionale di statistica (IStat) suggested that the economy contracted by 0.1% between January and March.
Italy has always had a strong cash-based economy, with many transactions taking place outside standard channels such as credit card payment systems, so computerized shopping and buying isn’t a natural fit for all consumers. In addition, the unemployment rate has been worryingly high—12.7% in March 2014—meaning little disposable income in many households. But the recession also brought a major obstacle for many retailers: They just didn’t have the resources to fund robust, sophisticated expansion onto digital platforms. Without those online options, consumers have had less incentive to alter their shopping habits. Casaleggio noted in its analysis that brick-and-mortar retailers were moving online, though, in order to “combat the crisis” and acknowledged that integration between the internet and point of sale would be key for multichannel players.
There’s a long way to go before Italian ecommerce takes on the breadth and depth of, say, the UK’s digital shopping landscape, with many product sectors well represented. In Italy, over half (54.0%) of 2013 B2C ecommerce sales to consumers belonged to the “leisure” category. The bulk of this (46% of the total) was spending on online games, including bets on gambling sites and apps as well as replayed gambling winnings. Tourism—including travel and accommodation—accounted for 27.0% of the total.
eMarketer estimates that the number of digital buyers in Italy—people ages 14 and older who make at least one purchase via any digital channel during the year—will continue to rise by single digits each year through 2017, when the digital buying population will pass 18 million. But the proportion of internet users and of the wider population buying online or via mobile phone or tablet will remain markedly lower than in the UK, for example. In Italy, we expect the share of residents buying online this year to be just 28.2%—compared with 72.7% in the UK and 52.9% across Western Europe as a whole.