Hungarian e-commerce can take to a new level

Domestic Hungarian online retail turnover reached HUF 781 billion (€2 265 million) in 2019, an increase of 17 percent compared to the previous year - according to the joint e-commerce research of Reacty Digital and eNET. According to the forecast, the turnover of domestic e-commerce may exceed HUF 1,700 billion (€4 930 million) by 2024. The frequency of domestic online purchases has been growing steadily for years, with clothing being the most popular product category while accommodation booking is the most popular service. Shoppers choose shipping and payment methods more consciously, if the online store does not offer a suitable one, they may refrain from making a purchase.

The turnover of domestic web stores increased by 17 percent in 2019

Domestic online retail was HUF 781 billion (€2 265 million) in 2019, an increase of 17% compared to the previous year. The product categories with the largest online traffic are computer technology, clothing / sportswear, and consumer electronics. The average cart value of online purchases approached HUF 20,000 (€58) in 2019, with the construction / renovation category responsible for the largest, while online food ordering for the lowest value.

The coronavirus affects all areas of the economy. While retail sales growth is expected to slow down in the short term, online commerce will have a historic chance, with some branches booming and expected to stabilize at a higher level than before (e.g. food, household goods, etc.). According to the realistic scenario of Reacty's medium-term forecast, domestic e-retail turnover will be around HUF 950 billion (€2 755 million) in 2020 in Hungary, and by 2024 the current turnover may increase up to 2.2 times and exceed HUF 1,700 billion (€4 930 million). The pessimistic approach estimates a 1.6 times growth by 2024 compared to 2019, and the optimistic forecast is that it will grow 2.4 times by 2024. The e-commerce / retail ratio is expected to increase from the current 7.6 percent to 10.4 to 11.6 percent within five years, depending on the scenario.


Hungarians are buying online more and more often, but mainly at a lower value

Nine out of ten Hungarians aged 18-79 have already bought something online. In recent years, the proportion of buyers on a weekly or monthly basis has been increasing, so orders are becoming more frequent. In most cases, these are low-value orders (below HUF 5,000 (€15)), and as the value increases, the frequency of purchases decreases. Convenience and affordability have been important arguments for online shopping for years, but this year the role of safety has also increased significantly as a result of the pandemic.

The most popular product categories purchased online are clothing / shoes / bags (57%), mobile phones and accessories (56%), and toys / gifts (52%). Among the services purchased online, accommodation booking stands out (60%), followed by tickets (cinema, exhibition) (44%) and insurance (37%). The number of product categories ordered is also increasing, with the average customer having already bought online from seven product groups at least once in their lifetime.

In recent years, more and more people are ordering products and services from the health and wellness, home appliances, and beauty and cosmetics categories. Meal delivery and online food purchase increased significantly in 2020, which was mainly due to the epidemic situation.

Hungarians are also increasingly buying services via the Internet, with the average customer having already bought four types of services online at least once in their lifetime. Young people and those with higher education order products and services online from several categories.

Online shoppers are more conscious about choosing payment and shipping methods

Since last year, the proportion of those not buying a product in a particular online store due to payment or delivery methods that are not suitable for them has increased 1.5 times. 60 percent of 18-79-year-olds have not started shopping or left their cart because they could not find a suitable payment method, while in the case of delivery methods this proportion was 49 percent.

When shopping online, cashless payment (primarily by credit card through a bank system) is preferred by most (45%), but cash on delivery is still popular. But even in this case, there is a shift towards cashless payment, more and more people pay by card at the courier if they have the opportunity to do so. An average web store offers four types of payment options, the most widely available being cash on delivery and bank transfer, which shows that the payment methods offered and those favoured by consumers are not always compatible.

The cost of delivery plays a prominent role in the choice of delivery method, however, 83 percent of online shoppers agree that home delivery is a service, so it is understandable if a fee must be paid. Courier delivery (80%) has been the most favoured for years, with staffed pick-up points (38%) and postal delivery (36%) also being popular. The popularity of parcel lockers (27%) has been growing slowly but steadily in recent years. An average domestic web store offers three modes of delivery for its customers. Courier home delivery is available in nine out of ten webshops, and every second webstore also allows for in-store pick-up.

Many people try ordering from abroad, but the order frequency is declining

Half of online shoppers prefer domestic web stores, though the proportion of those who have already ordered from a foreign store is increasing moderately (58%). Ordering from abroad is more common among men, younger people, and frequent online shoppers. The three most popular foreign online stores are eBay (58%), AliExpress (49%) and Wish (48%). Although more and more people try ordering across borders, the frequency of purchases is steadily declining. While in 2018, almost two-fifths of those buying from abroad ordered at least once a month, in 2020 only a quarter of them did so.

In the case of foreign purchases, the lower cart value (usually below HUF 3,000 (€9)) is even more typical, the most popular category among adult Internet users is mobile phones or accessories. Getting cheaper products or buying things that are not available in Hungary are still the most important reasons behind ordering from abroad. Domestic online stores were given a chance, as orders from abroad fell in parallel with the outbreak of the coronavirus pandemic. If Internet users found a similar product offer and prices here in Hungary, some of them could stay with Hungarian solutions even permanently.

Briefly about the background of the research:

Population research: Reacty Digital conducted its research between March 24 and April 7, 2020, involving 914 people aged 18-79 on the Véleményem Van ( online research community. The data is representative of the Hungarian population aged 18-79 by gender, age, and region.

Webshop research: conducted by Reacty Digital in March and April 2020 among Hungarian webshops. Services sold online are not included in the research. The 2019 e-retail traffic estimate was produced by Reacty Digital and eNET in June 2020.

Forecast: A medium-term, 5-year forecast of retail traffic volume is made from macroeconomic data and Reacty Digital and eNET’s own micro-level research.

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