For this overview, we’ve included the following countries under the definition of Eastern Europe and the Commonwealth of Independent States (CIS): Bulgaria, Estonia, Latvia, Lithuania, Romania, Russia, Ukraine. In all the markets covered by this overview, e-commerce growth is in double figures. Eastern and Central Europeans are buying online in increasing numbers – a trend driven by increased convenience, particularly as logistics networks become more efficient and ubiquitous, and home delivery more readily available.
Eastern Europe is a highly diverse region, economically, culturally and in almost every other way. Its growing e-commerce markets are ripe for investment, with consumers hungry for bargains and for leading brands. But any successful strategy must be built on a detailed knowledge of the local and regional markets and must factor in a high degree of localisation.
The Local Payment Culture
Credit cards are the most common payment method for online purchases in Eastern Europe, with 31% of the market. Cash has 27%, E-wallets have 24%, bank transfers 14% and various other methods 4%. The card market is divided between Mastercard with 44%, Visa 42%, and minor and other schemes with 14%.
These averages are useful, for instance, in highlighting the importance of alternative payment methods throughout the region, but they also conceal a great deal of variation between markets. In Estonia, for instance, cards are used in 18% of all online transactions, whereas in neighbouring Latvia, it’s 43%.
The E-Commerce Market
E-commerce in Eastern European and CIS markets is growing at an average rate of 19%, 3.6% of all retail sales are made online, and the average online consumers spends $705 a year. In the main, the growth in e-commerce is driven by the same factors as in other markets – the increasing ubiquity of high-speed Internet, consumer price sensitivity and the improvement in delivery networks.
Within these countries, 47% of the population has shopped cross-border in the past year, with a strong preference for the Russian and German markets. Russia, as ever, stands apart from this. There, a hunger for consumer goods in remoter regions is relatively under-served by high-street stores. In 2018, 62% of Russians shopped cross-border with China the most popular market.
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PPRO Country Insight Bulgaria
The latest consumer data for Bulgaria show consumer confidence flatlining throughout much of 2018 but up 2.3 points on the end of 2017. According a report by the EU Commission, wages in Bulgaria are growing faster than productivity is rising, one of a few countries in which this was the case.
PPRO Country Insight Estonia
Sometimes it feels as if Estonia, a nation of just 1.3 million, is trying to turn itself into a sort of online Switzerland. Having digitised almost every aspect of its own society – Including voting, applying for a driving licence, or filing taxes – it is now attempting to recruit new, and entirely virtual Estonians from abroad.
PPRO Country Insight Latvia
Latvia is one of the three Baltic republics which gained independence from the Soviet Union in 1991. Historically, the country is Lutheran but is now largely secular. Just over 60% of the population speaks Latvian, a Baltic language closely related to Lithuanian. Around a quarter of the population speak Russian. The country’s population is just under 2 million.
PPRO Country Insight Lithuania
Once part of what was, at the time, Europe’s largest state – Polish-Lithuanian Commonwealth – Lithuania is now a small, Baltic republic. Its population of just under three million is around 80% ethnic Lithuanian. The largest minority are ethnic Russians.