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19 March 2020

Can Belgium compete against foreign e-commerce players?

The newly launched E-commerce Barometer 2019 confirmed a positive trend in Belgian e-commerce. The Belgian e-commerce market accounted for no less than 8.2 billion euros of online revenue in 2019, representing a sharp increase of 17% compared to 2018. This significant growth trend first set in 3 years ago. Due to strict measures limiting offline operations in response to the current corona crisis, we expect the number of online sales to grow even faster.

But how does our performance compare to our neighboring countries?

Our neighboring countries are also on a growth trajectory. A look at the table below tells us that we still achieved a stronger growth percentage compared to some neighboring countries, which means that Belgium is certainly on the right track. This positive trend clearly shows that e-commerce is becoming a fully-fledged part of the economy and therefore has a significant impact on it. It has changed the overall profit and cost structure of companies and brought about a shift in the interaction and engagement between buyers and sellers.Belgium versus neighboring countries

Belgium: catching up on its delay

Behind this boom lies the hard work put in by Belgium. We’ve had to catch up, since we had a slow start compared to our neighbors. There are several possible reasons why:

  • First, building a user-friendly e-commerce website was more difficult than it is now. With the lack of expertise and tools, the entire process was slowed down. Today, it is possible to easily create a user-friendly website because of the various available supporting tools.
  • Secondly, the Belgian market is quite small and multilingual. The market is divided up into 4 different language communities (Dutch, French, German and English for expats) which makes it extra hard for online merchants, and even Belgian stores, to operate in Belgium.
  • Thirdly, legal issues proved to be a big hurdle. The Belgian government was not geared to the legal requirements linked to e-commerce, with nightwork, for example, not being legal until recently.

These elements made operating in Belgium as an online merchant less appealing and has caused us to be behind a bit.

Players in the world of e-commerce: Belgium as #19

Countries like The Netherlands, France and the UK have built an active e-commerce landscape in the past 15 years, whereas Belgium only started to catch up in the last 5 years. But how do we compare to our neighbors? Let’s have a look at how our European and non-European neighbors are doing.

E-commerce market revenue 2019: ranking of Belgium and other countries

Belgium is today #19 in terms of turnover, behind our neighboring countries that have larger markets and thus a higher national demand. If we compare Belgium to other countries of our size, then we seem to be doing slightly better – we’re positioned behind Sweden, but ahead of countries like Portugal, Switzerland and Norway.

Following the lead of foreign e-commerce players

Some of the largest e-commerce players can show Belgium how things are done. We summed up 5 areas of potential growth:

  1. The growing use and ease of the internet

There are some markets to watch who have seen incredible growth in the past few years and are predicted to keep this up – examples are Thailand, South Africa and New Zealand. They have a strong population of internet users who are familiar with the use of online shopping, mobile and digital technologies in general. A growing internet penetration in the European market and worldwide therefore offers, next to growing internet literacy, an opportunity to develop (cross-border) e-commerce. With millennials representing an increasingly significant part of the active population, we expect this to continue rising.

  1. Frictionless buying experience

Several possible solutions might remove friction in the buying process. One has to do with the final stage of the online purchasing process: payment. In The Netherlands, consumers mainly use iDeal, while Belgians prefer to use online bank contact. Often checkout pages require a lot of input from the customer, which can form a real barrier. By optimizing the last steps in the buying process, a brand can help make the experience seamless for its customers. It seems that the public is ready for a new way of paying and that this might be the opportunity for Belgium to boost its e-revenue.

In addition, many online shoppers expect a flexible free return policy, although it’s a major cost factor for e-commerce businesses. Innovations to reduce the number of returns for businesses are legio: ASOS developed a new feature called “See my Fit”, an AR-tool that provides customers with a unique preview of how the product looks in different sizes and on different body types. Customers get a personalized experience and are more informed, which results in fewer returned articles and a higher online profit.

Besides a flexible return policy, consumers also expect a quick service. One way of doing this is fast or even same day delivery. Next day delivery is a crucial success factor: sales increase by 25% if a company is able to deliver the next day.

  1. Meaningful shift to convenience

The consumer mindset is shifting towards convenience: he wants a product that is in stock, immediately available and the cheapest out there. This goes to show that, when it comes to e-commerce, price and quality are not the only things that matter for consumers. The urge for convenience is changing the way consumers shop.  

An important shift within convenience is mobile shopping. Businesses shouldn’t ignore this when working on their e-commerce. Or take a look at the growing popularity of “one-click in app purchasing” where consumers can make “one-click” purchases with the payment information they entered the last time. These are all techniques to delight the customer through convenience.

  1. A little bit of luck: the geographical location

A central location ensuring fast distribution can have a big impact. Let’s look at Germany for example, one of the first to embrace e-commerce. What it has in common with Belgium is that it is attractively located: it’s considered the gateway to Europe and has some of the most advanced transportation infrastructure in the world. Taking these similar advantages into account, Belgium can leverage its small size and central location and embrace it as a perfect opportunity to grow in cross-border business.

  1. A positive attitude leads to positive online behavior

The view of e-commerce and how it is presented in the media can also determine the growth of e-commerce to some extent. Media coverage in Belgium on the topic of e-commerce is rather negative compared to other countries. The Belgian news often reports on the downsides and potential dangers of online shopping while the media in general seems skeptical and protective when it comes to the subject of e-commerce. A more positive image of online shopping would help improve customer perception and, possibly, create a more trusting environment for e-commerce.

The real growth is yet to come

Belgian e-commerce is on the right track with still a real potential for growth. It’s important to highlight that businesses need to enhance every aspect to ensure a complete end-to-end online shopping experience. (Cross-border) e-commerce provides a beautiful opportunity for a small country such as Belgium and making these comparisons with foreign countries will help us keep track of the different developments and opportunities out there.

Implementing best practices adopted by our successful neighbours will ensure that Belgian e-commerce can fully benefit from the positive predictions for the coming years. While Belgium may not be able enjoy the same success as its neighboring countries overnight, with the help of experts it is possible to work step by step towards yet another positive result. There is no doubt that Belgian e-commerce will still be a success story in the coming years.

For a full picture on the Belgian e-commerce landscape, take a look at our E-commerce Barometer 2019.

DISCOVER THE E-COMMERCE BAROMETER 2019

References: 
World Retail Congress, Ecommerce News, Ecommerce DB, Eurostat, Emarketer, Statista, Ecommerce Europe, Wordline, SafeShops.be, Scalefast, Oberlo, Comeos, Semantic Scholar.

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