French E-Commerce sector making ground
The French E-Commerce market continues to make ground on its British and German counterparts. In many ways, it is surprising that France has not made the sort of inroads that we have witnessed with other E-Commerce powerhouses. After all, there is a strong tradition of home shopping in France, a high level of internet penetration, a highly developed logistics infrastructure in place, and of course an affluent middle class with a solid disposable income. Another aspect of this picture that is confusing is why more store based retailers have yet to embrace online retail in the same way stores like John Lewis and Next have done in the UK. And yet, in France, we also have an online retailer in Cdiscount that has since emerged as a major competitor to Amazon in recent years. No mean feat, and one that perhaps suggests that France is more ahead of the curve than some of the facts would have you believe.
The trends for the French digital commerce sector are very encouraging; e-Marketer had online sales growing at around 10.5% since 2010 to reach a market value of around €31.8 billion. Despite a relatively slow start compared with some of the other major E-commerce players in the world, online retail is increasingly becoming second nature to the French. While device ownership had lagged behind Germany and the UK, recent Eurostat statistics revealed that this will soon be a thing of the past with broadband access now reaching the 80% mark. We are also seeing more frequent purchasing from French consumers, with the FEVAD (Fédération DU e-Commerce et de la Vente à Distance) highlighting that the rate of online buying rose approximately 7% last year. As we see the continued development of M-Commerce over the next few years, we can expect to see this trend continue. Another key development behind this trend, is the fact that increasing competition is spurring more and more businesses to establish an online presence. With E-Commerce it really is simple, either you’re in, or your out, and as more and more companies come to accept this, we see a dramatic enhancement of the online shopping experience for consumers.
Of course it’s also a fair assessment to say that France’s relatively poor economic performance of recent times has had an impact on consumer confidence levels. However as we have witnessed in other regions, online retail appears to have this uncanny ability to withstand knocks in consumer confidence and ride the storm, with online spending transactions increasing by 15% over the course of the year. Yes, we saw a decline in the average basket size, but this can also be attributed to consumers diversifying their shopping channels and buying a greater number from a larger selection of outlets. With the French economy gaining slightly more momentum this year, and inflation set to drop, this in turn should contribute to a more successful E-commerce sector in France and an increase in online sales.
A potential development that many French marketplace sellers will be looking out for, is whether the Casino Group follows through with its plans to merge with Nova Pontocom. This would merge these platforms with the online business of Companhia Brasileira de Distribuicao, Casino’s Brazilian subsidiary and one of Brazil’s leading E-Commerce groups. This would be a clear move to disrupt the dominance of the major players; Amazon, eBay, Alibaba and increasingly Rakuten in a bid to create an E-Commerce giant with annual sales of around $4.1bn. In addition, marketplace sellers on these platforms have access to some of the most rapidly developing E-Commerce markets in the world; Brazil, Colombia, Vietnam and Thailand. With both Amazon and Alibaba already launching operations in Brazil, there can be little doubt what the motives behind this move are!