German eCommerce: Expand Geographical Focus For Growth

Deutsche Card Services (a subsidiary of Deutsche Bank) just released their yearly report on eCommerce.  Several interesting findings seem to indicate that there is huge potential upside for German eCommerce businesses, which is great news, but the upside may only exist due to a current geo-centric approach to eCommerce that has limited eCommerce growth potential in Germany to-date.

The report is compiled by analyzing 24 million anonymized transactions that are processed via the Deutsche Card Services platform.  In other words, this report is based on real-life purchasing behavior and not on surveys.  The report does have a certain marketing flavor, hinting at the benefits of a good payment processing partner, but overall does reveal some very interesting findings.

The report shows that the international eCommerce reach of German shops has increase, however slightly, and is still significantly behind countries such as the UK.  For example, while UK eCommerce sites rake in over one-quarter of their sales from non-European consumers, Germany pales in comparison with on 0.3% of transactions being initiated with this same customer group.  Wow.  What is the primary reason for this disparity?  Site language availability, mein Freund!

Keep in mind that this report was researched and compiled by a very respected German institution and the message is all the more clear.  German eCommerce sites must begin to offer different languages in order to attract the international buyers that UK sites currently boast.  As pointed out in a previous post, adding a new language isn’t as technically challenging as it used to be and should be planned, not feared.  Other than the language barrier, here are some additional interesting facts listed from the report:

  • Consumers from countries outside Europe, clearly prefer British to German shops
  • In Germany, women trigger more eCommerce transactions than men
  • National Quirk: German online consumers tend to look for bargains on Sunday
  • Spain is now the third-largest eCommerce market, behind Germany and the UK (apologies to The Netherlands, who not only lost the World Cup Final to Spain, but have also been supplanted by them as the third-place eCommerce market this year)

So what does all of this say about German eCommerce?  Germany remains one of the strongest economies in Europe, so why doesn’t the same follow suit for the German “eConomy“? A couple of factors are key contributors to this fact:

  • The language barrier is an obvious limiting factor.  German sites that want to attract non-European customers must begin to add additional languages to their sites, with English as a priority followed by Spanish.
  • Design concerns and user experience preferences are different from country to country.  I’ve shown German eCommerce sites to British companies, and vice versa, and many times the reaction is very negative.  Let’s face it, different cultures create different opinions of things (for the record, that’s a good thing) and must be carefully measured for effect on non-national audiences.  Understanding user experience at an international level, and how things differ from region to region is very important in designing a site to best serve consumers from across the globe.

All things considered, Germany remains a very strong eCommerce market and things continue to improve year over year for German-based eCommerce companies.  eCommerce sites with a primary focus on Germany as a consumer base could position themselves to blow the doors off current revenue figures, however, by heeding some of the advice in the Deutsche Card Services report.

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