Hungarian online retail sales reached HUF 1 046 billion (€3 018 million) net in 2020, crossing the 1 000 billion psychological barrier for the first time, according to a survey of e-retailers conducted by Reacty Digital with the professional support of Olcsóbbat.hu. The forecast predicts a further 91-161 percent growth by 2025, depending on the economic environment and consumer habits. Last year, for the first time, cash lost its dominance in online retailing as a result of the epidemic.
One in ten forints spent in domestic online shops
The net turnover of HUF 1046 billion (€3 018 million) in 2020 represents a 34 percent increase compared to the net turnover of HUF 781 billion (€2 265 million) in 2019. Considering the growth rates of previous years, this corresponds to roughly two years of growth in a single year. Computer equipment was the largest product category in terms of turnover, followed by clothing and sportswear, and consumer electronics.
At the same time, the average cart value of purchases decreased by roughly HUF 5 000 (€14) (from HUF 19 860 to HUF 14 910 / €57 to €43) compared to 2019. This is presumably due to an increase in the number of online purchases. People were forced to stay at home and ordered smaller value items online that they would otherwise have bought in an offline shop but were unable to do so in 2020 due to the lockdown. As a result of the closures due to the coronavirus outbreak, online stores have seen a surge in sales both in March 2020 and March 2021 that was previously only seen during the Christmas period in Hungary. Thanks to this, one in ten forints was spent online by Hungarians in 2020, with e-retail accounting for nearly 10% of total retail sales.
The cashless era for online shops has arrived
In terms of the delivery methods, home delivery by courier is unbeatable, but in terms of payment, 2020 was an interesting year. Last year, online shoppers paid 54% of the value of their purchases without cash (e.g. at the courier by debit card or online card payment) according to online retailers, so for the first time in Hungary cash lost its dominance in e-retail in 2020. The epidemic was able to achieve a breakthrough that experts have been waiting for many years.
Longer-term prospects
Depending on how long the epidemic will be with us, how the economy will rebound, and how long the digital transformation in consumer habits will last, there are several scenarios for the future of e-retail sales. In the optimistic scenario (i.e. if the epidemic ends in 2021, the (global) economy recovers quickly and consumers switched to online shopping prefer to stay online in the future), e-commerce sales could grow by up to 161% by 2025, taking the net e-commerce turnover to more than HUF 2 700 billion (€7 791 million) (current prices). However, online turnover is expected to grow even under the pessimistic scenario (i.e. if the epidemic is prolonged, the economy recovers slowly and consumers return to offline shopping). In that case, online sales in Hungary are expected to grow by "only" 91% , which could mean a net turnover of roughly HUF 2 000 billion (€5 771 million) by 2025. A more realistic scenario between the two extreme forecasts a 137% growth rate and a net turnover of HUF 2 500 billion (€7 214 million) by 2025.
Briefly about the background of the survey: the survey was conducted by Reacty Digital among e-retailers with the professional support of Olcsóbbat.hu, between 22 March and 21 April 2021.