Cross-Border E-Commerce Expansion: Italy

Market analysis

Italy’s highly developed and urbanized (71.66% – 2022) social market economy ranks third in the Community in terms of GDP. According to data published by Statista in 2023, the podium was taken by:

• Germany – 4.12 trillion euros,


• France – 2.8 trillion euros,


• Italy – 2.09 trillion euros.

In the per capita ranking published by Eurostat, the population of this Mediterranean country, which numbers almost 59 million people, ranked eleventh. This means that the average resident earned 35.35 thousand euros last year.

The World Bank’s data

At the same time, it is worth noting that according to the World Bank, the unemployment rate has been decreasing almost every year since 2014, reaching a record level of 12.68% (2014). After six years it dropped to 9.16%. In 2021, a slight increase was recorded (9.5%), but the next period brought a drop to 8.09%. For comparison, the lowest level since the beginning of the current millennium was in 2004-2009 (respectively: 7.87%, 7.73%, 6.78%, 6.08%, 6.72%, 7.75%). Thanks to the same institution, we also know the percentage share of individual economic sectors in employment in Italy (2022):

• services – 69.34%,


• industry – 26.87%,


• agriculture – 3.79%.

This division is very stable, for comparison a decade earlier the values ​​were: 68.72%, 27.58%, 3.69%. To complete the picture, we also present the percentage share of individual age groups in society – in 2022, 63.52% of the Italian population was of working age, above (+65 years) – 24.05%, and below – 12.43%. Here too, the numbers have remained relatively stable since 2012 However, as in other European countries, we can observe the process of an ageing society in Italy as well.

Let’s have a look at the statistics extremely important to us – import and export over recent years. The good news, confirming the upward trend in Italian cross-border sales (the balance of which currently stands at over 32 billion euros in favour of the former), is the growth of both values. Below, we present the export results provided by the World Trade Organisation in billions of euros:

• 2022 r. – 657,04,


• 2021 – 615,64,


• 2020 – 499,79,


• 2019 – 537,72,


• 2018 – 549,53.

As well as import:

• 2022 – 689,26,


• 2021 – 567,42,


• 2020 – 426,87,


• 2019 – 475,01,


• 2018 – 503,24.

E-commerce characteristics

Similarly to the situation in other countries of the Old Continent, the number of e-commerce users in Italy is growing steadily. According to Statista, 13.78 million people in this country made purchases online in 2020. As of now, it is almost 19.5 million, which is ⅓ of the population. According to estimations, this number will keep growing until the end of the decade, reaching 25.18 million in 2029. The revenue from this market segment is growing along with it. At the end of the last decade it amounted to ten billion euros. And kept growing at a stable rate of several billion per year until 2020. The next twelve months brought the first of the huge leaps – from 48.2 to 64.1 billion euros, and then another eleven billion. Therefore, 2022 ended with a result of 75.9 billion euros.

What devices do Italians use for online purchases most often?

According to a report published by Statista in December 2022, the percentage share was as follows:

• smartphone – 69%,


• desktop computer – 35%,


• laptop – 32%,


• tablet – 25%,


• smart TV – 9%.

This trend is also reflected in the results of a multiple choice survey conducted by the same institution regarding the most popular payment methods on the web. 52% of respondents declared the use of online payment gateways, such as PayPal or Google Pay. Credit cards came second (45%), followed by debit cards (37%). The remaining spots were taken by prepaid cards / vouchers (32%), direct debits (23%) and cash on delivery (20%). We’re not going to list the options that received less than ¼ of the votes. However, here’s the link to the results of the study for the curious readers.



Mobile devices


As you can see, this is yet another market we are discussing that proves mobile devices to be the future of e-commerce. Thus, the importance of adapting your online stores to the requirements of RWD (Responsive Web Design) continues to grow. It is necessary to allow your consumers to shop conveniently regardless of the device.

Which companies in Italy use the online sales channel the most for their development? The clear favourites of the list prepared by ISTAT (It. Istituto Nazionale di Statistica – the Italian Central Statistical Office) are editorial offices, of which no less than 84.5% use e-commerce. The next place went to companies related to accommodation and food delivery – 38.8%. Telecommunications came last with a result of 36.7%. The remaining spots were taken by entities dealing with:



• production of beverages/food/tobacco products – 33.7%,


• courier services – 32.9%,


• audio/video production – 30.8%,


• retail sales – 29.4%,


• information services – 17.3%,


• production of material goods – 15.1%.



Given the above industries, you will certainly not be surprised by the data published by Salesforce Research. According to them, as many as 65% of entities active in the e-commerce sector invested in the development of their own websites in 2022, and 59% in social media activities. Slightly fewer (57%) companies decided to allocate funds to develop sales through marketplace platforms. Places off the podium were taken by digital sales materials (48%), telephone or email order handling systems (39%) and mobile applications (31%).

How did the above actions translate into turnover in individual channels? The percentage share looked like this a year later:



• websites – 40%,


• marketplaces – 28%,


• social media – 13%,


• mobile applications – 8%,


• other – 11%.




Cross-border e-commerce


The value of cross-border online sales in Italy is growing in line with the entire e-commerce market in the country. Its percentage share in the total turnover in B2C e-commerce increased from 28.7% to as much as 39.2% between 2019 and 2022. The exact values ​​for this period are as follows:



• 2019–4.4 billion euros,


• 2020–5.7 billion euros,


• 2021–9.5 billion euros,


• 2022–10.7 billion euros.



Let’s have a look at the foreign markets where Italian companies most often sell and the regions from which residents of this country order their desired products most often. According to data presented in March 2023 by Casaleggio Associati, companies from the country of the Eternal City decided to start e-commerce in Germany (34%) and France (31%). A little under ⅓ of the share in Italian e-exports went to the Spanish market (28%), and a little over ⅕ (21%) to Great Britain. Above 10% were also obtained by: Switzerland (16%), USA (15%) and the Scandinavian countries presented in this report together – 13%. Another question is, from which countries did Italians order the most products? Even 38% of packages came from China (sic!). Germany (18%) and Great Britain (12%) were next in the line.



The largest online stores


It will probably come as no surprise to anyone that the winner in both the ranking of the largest sales platforms and e-stores in general in Italy is Amazon.it. Of course, there is a huge number of entities on the market, mainly vertical ones (i.e. specializing in a specific range of products). Examples from the fashion industry include vinted.it or zalando.it. They occupy the highest positions, with a share of 9.5 and 7.67% in the traffic generated by this e-commerce sector.

In the electronics category, the unquestioned leader is the Apple Store. It’s visited over 6.7 million times per month (it is worth noting that Mediaworld took the second place, while the result of ~4 million only emphasizes Apple’s hegemony). As for the beauty sector, players are Notino and Sephora, with results of 1.39 and 0.83 million, respectively.



Amazon in numbers


Considering the achievements of the above, one may start to wonder whether they do not pose a threat to the position of the global e-commerce giant in Italy. Hard data invariably provides a clear answer. Here are the sales values ​​in the largest online stores:



• Amazon – 5.9 billion USD,


• Shein – 1.23 billion USD,


• Apple – 719 million USD,


• Unieuro – 587 million USD,


• Mediaworld – 585 million USD,


• IKEA – 391.8 million USD.





Traffic


We already know that the vast majority of e-commerce takes place on platforms. What is their percentage share of the traffic generated on the Internet? Amazon.it has a little over 42%, while second place ebay.it only has ~10.2%. The next three spots are taken by: subito.it (8.77%), temu.com (3.91%) and aliexpress.com (3.88%). To present these values ​​even more precisely, let’s look at the number of unique users of the largest marketplaces in the first quarter of the year over the years 2019–2023:

Amazon:


• Q1 2023 – 35,7 million,


• Q1 2022 – 34,4 million,


• Q1 2021 – 33,4 million,


• Q1 2020 – 33,8 million.



eBay:


• Q1 2023 – 18,1 million,


• Q1 2022 – 17 million,


• Q1 2021- 17,8 million,


• Q1 2020 – 19 million.



Subito:


• Q1 2023 – 12 million,


• Q1 2022 – 11,7 million,


• Q1 2021- 11,1 million,


• Q1 2020 – 9,2 million.



For comparison, in the last of the above-mentioned periods, Shein recorded 10.4 million, and ETSY only 5.7.



Shopping apps


However, the statistics of the most frequently downloaded shopping apps look entirely different. This is the only list on which Amazon does not take the first place. Which in this case went to Temu, with a result of almost 12 million installations. Second place was taken by the leading platform’s app (3.46 million), and third by Wallapop (2.37 million).

Let’s now focus for a moment on Amazon from the consumers’ point of view. What are the reasons for which they most often decide to shop on this particular platform? According to Statista, the most important of them is the wide product catalogue (7.3 on a scale of 10). This is followed by the product confidence (purchase security) – 6.2 points. Let’s have a look at the frequency of transactions. According to data presented by Remazing in 2022, at least one order per week was placed by 19% of users. Another 34% declared purchases several times a month (but less than one each week). 26% of consumers defined the frequency as “once a month”, and another 16% – once every few months. The smallest group (3%) orders products once a year or less often.



How many platforms should you use?


Finally, let’s have a look at marketplaces from the perspective of entities selling on them. As stated by the previously cited Casaleggio Associati, 34% of companies decide to sell on Amazon, and 18% on eBay. The last place on the podium went to ManoMano (7%), closely followed by Facebook (6%). Due to the low share of the remaining services, we won’t talk about all of them. However, here’s a link to the full list. At the same time, as many as 36% of business entities conduct sales only on one platform. The largest group (41%) decides to trade on two or three marketplaces. Only 12% of entrepreneurs develop their business on four or five platforms. Identical group declared sales on more platforms.



Is e-export to Italy worth considering?


The answer is yes. It is the third-largest economy in the European Union with high purchasing power. In 2022, cross-border e-commerce already accounted for almost 40% of e-commerce there, and almost ⅓ of the country’s inhabitants would shop online. At the same time, the undisputed leader in online sales is Amazon. It has an extensive logistics network in this country as part of Fulfilment by Amazon, which definitely facilitates expansion. It also secures our sales, regarding the two reasons for shopping on platforms that are most often mentioned by Italians.

However, as Damian Wiszowaty, CEO of Gonito, said in one of his recent speeches, the method of reconnaissance by combat, i.e. entering foreign marketplaces in a test manner, is definitely not a method recommended by experts. Therefore, when planning to start selling on a new market, remember that the decision should be made based on a meticulously conducted analysis of the potential of a given product category.



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