Title Europe in Global Insights | Explosive Growth in Trillion-dollar Markets

Europe's Explosive Growth in Trillion-dollar Markets

Outlook

Sellers who are struggling in the North American market are gradually turning their attention to Europe. However, due to the complex language environment and relatively high costs, coupled with the impact of emerging markets such as Southeast Asia and Latin America in the past two years, many sellers are hesitant to enter the European market. As one of the world’s major economies, is the European market worth a try?

1. Potential market with high purchasing power and diverse consumer demand

Europe can be said to be one of the largest and most profitable markets in the world. On the one hand, it has a population of over 740 million, and most consumers have high purchasing power. According to statistics, the European Union is the world’s second-largest consumer market, and the UK ranks sixth globally. This makes it possible for European consumers to purchase more high-end products. At the same time, the many national markets in Europe mean a more diverse range of consumer demand, which is a huge attraction for companies that need to expand their business.

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Although the markets such as the UK and France have become crowded in recent years, this has not stopped the rapid growth of e-commerce sales and the rise of other emerging markets in Europe. For example, the largest e-commerce market in Europe, the UK, has seen its e-commerce sales increase to 162.26 billion euros (approximately 140 billion pounds) in 2021; and Spain, which has received much attention recently, as a developed capitalist country, has a per capita GDP of 30,000 US dollars in 2022, and more than 70% of Spaniards have experience in cross-border e-commerce shopping, indicating huge market potential.

Especially since the outbreak of the pandemic, the shopping habits of many European consumers have begun to change, shifting from offline to online, and with the improvement in internet penetration rate, the rapid development of e-commerce and social media have laid a good foundation for the future development of the European market.

Two

Platform Competition: “Strong Dragons” and “Local Snakes”

As the world’s third-largest e-commerce market, the European market has always been a battleground for major e-commerce giants.

Currently, the most popular or highest-visited platforms in various European countries are not local platforms, but American platforms such as Amazon.

In addition, most platforms only focus on a single market or certain specific products, such as Cdiscount and FNAC, which focus on France, Allegro in Poland, Fruugo in the UK, eMAG in Romania, bol.com active in Belgium and the Netherlands, etc., all of which are popular local e-commerce platforms in Europe.

Until the rise of social media in recent years, new ways of shopping have been provided for consumers, with TikTok Shop being the most typical. Although TikTok Shop’s performance in the first stop in the UK was mediocre, it did not affect its subsequent expansion. TikTok Shop plans to gradually land in multiple European countries, including Spain, France, and Italy, by 2023.

Facing platform segmentation and specialization, sellers can evaluate and choose suitable platforms based on the target market and the requirements of store opening, product listing, and payment, combined with different platforms:

● General products can choose Amazon, eBay, Rakuten, Allegro, OTTO, etc.;

● Certain specific categories of products can focus on platforms such as Cdiscount, ManoMano, Zalando, BackMarket, etc.

Three

The Blue Ocean Categories in a Highly Competitive Market

A mature market means high-intensity competition, and currently, various industries in the European market have been divided among major companies. For example, furniture exported from Asian countries is of good quality and low price, and has strong competitiveness in low-priced products, but the high-end market is still dominated by brands from Italy and Nordic countries. Although these furniture items have a high unit price, the degree of customization and personalization is still beyond the reach of most Asian furniture brands.

Overall, clothing, shoes, and accessories are still the most popular categories among European online shoppers, followed by items such as cosmetics, beauty or health products, fitness equipment, and furniture and home decor, but the more popular the product, the more intense the competition.

To successfully enter the European market, it is necessary to refine the industry sector or product category in the early stage, carefully research and analyze local customer preferences and competitors. Unique niche products may have more potential opportunities.

For example, 39% of consumers in Italy like to buy books, movies, music, and game products when shopping online, so it may be a good idea to start with these single-market categories with good performance but less competition. Additionally, Italy has been vigorously developing a circular economy in recent years, and some products that use environmentally friendly packaging will attract consumers to place orders more quickly. Or using the “environmental protection” concept as a selling point may make it easier to gain favor with Italian companies.

Four

PingPong, an indispensable global payment service provider in Europe

Eight currencies are used in the 27 EU countries. If we consider 50 European countries, the number of currencies increases to 29. In addition to different payment and financial regulations and rules between different countries and regions, companies operating in Europe will inevitably face a complex payment environment and additional costs and exchange rate risks. For example, in Spain, nearly 30% of consumers often fail to pay due to strict anti-fraud systems or credit card purchase restrictions.

Many companies have been seeking better solutions to reduce financial costs, shorten payment and collection time, simplify payment and collection processes, cover more user scenarios, and obtain sufficient support when encountering problems. As one of the earliest service providers to provide cross-border payments for global merchants, PingPong obtained a Payment Institution license issued by CSSF of Luxembourg in 2017, which enables it to provide cross-border collection and local payment services for cross-border merchants. In 2020, it upgraded to an Electronic Money Institution license with electronic currency storage and more functions, and obtained the UK EMI license in 2023, achieving a compliant layout in 28 European countries and becoming one of the cross-border payment companies with the widest licensed business scope in European countries, covering 100% of the European market, of which 81% of customers can provide exclusive end-to-end, highly controllable and customizable services. Based on global compliance, efficient localization operation, and perfect partner network, PingPong continues to seek to provide merchants with more competitive exchange rates and transaction fees, quickly and safely complete cross-border payment and collection, and accumulate rich experience and many loyal customers in the European and even global markets.

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