Experts expect a further decline in e-commerce sales this year. Because Amazon, Otto, Zalando and Co. are now also increasingly feeling the effects of the slump in consumption.
For a long time there seemed to be only one direction for online trading: upwards. But that’s over. Meanwhile, online giants such as Amazon, Otto and Zalando are increasingly feeling the effects of the slump in consumption in Germany.
According to the study “E-Commerce Market Germany 2023” published by the Cologne retail research institute EHI, the 1,000 online shops with the highest sales suffered a decline in sales last year for the first time since the study began in 2008.
This year, the experts expect “the downward trend to continue,” as the head of the e-commerce research department, Lars Hofacker, reported. The only question is how big the minus will be.
Significant decline in sales
The fact is: According to the industry association bevh, sales in e-commerce were already around 13.7 percent below the previous year’s level in the first six months of this year. For the entire year, the EHI experts expect, in the best case scenario – with a trend reversal in the second half of the year – a decline in sales of 4.2 percent in online retail. In the worst case scenario – with further sharp declines in sales in the rest of the year – nominal – i.e. not price-adjusted – net sales could also collapse by a whopping 16.9 percent to 64.6 billion euros.
The EHI is not alone in its gloomy assessment. The bevh also recently forecast a decline in sales of more than 5 percent for 2023. According to an industry survey by the association, only about one in five online retailers expect to put the crisis behind them over the course of the year. The German Retail Association (HDE) is the only one who is somewhat more optimistic. In its forecast for online retail, which was published in May but is still valid, it still expects a nominal increase in sales of 5.8 percent.
The truth is, however, that the industry has experienced unprecedented growth in the past Corona years, which at least somewhat puts the losses into perspective. According to EHI, in the first Corona year 2020, sales of the 1,000 largest online retailers increased by 33.1 percent and in the second Corona year 2021 by another 16.1 percent. Despite the slight decline in 2022, sales last year were still a good 50 percent above the pre-Corona level.
Amazon ahead of Otto and Zalando
According to the EHI study, Amazon remains the undisputed number one among the largest online shops in Germany, followed by Otto and Zalando. What is striking, however, according to EHI, is that last year, unlike in the past, the market concentration in German online trading fell slightly again for the first time. Many large online shops in particular would have had to cope with a decline in sales in 2022. Many smaller shops, on the other hand, were able to increase their sales despite the adverse circumstances.
Specifically: While the sales of the ten largest online shops fell by a total of 9.7 percent, the smaller online shops in the bottom 500 places in the ranking grew by 7.3 percent, bucking the industry trend, according to EHI.
According to the EHI study, Amazon continued to dominate the online marketplace market last year, with eBay and Otto following far behind. Overall, the top 10 online marketplaces also struggled with sales losses last year, the EHI reported.
Source: Stern
