Ecommerce & retail in Spain

Vivian Hendrikse
With online sales in Western Europe having increased by 15.6% from 2015 to 2016, and by another 14.2% in 2017, ecommerce is the fastest growing retail market of our time [3]. What is more, this growth, corresponding to online spending for retail, is not expected to cease to exist. Retail is defined as sales of merchandise to the final consumer, excluding cooked food, restaurants, automobiles and vehicle fuel. Ecommerce therefore captures all online purchases within the retail sector, meaning purchases that included a transaction made using the internet or at distance [3]. Being not just the fastest growing, but also the largest retail market makes ecommerce an important market to acknowledge and explore. In this blog, the Spanish online retail market is investigated and current trends and developments within the sector are identified.
 

Spanish retail market in past decade and the rise of ecommerce

As Spain was hit by the financial crisis in 2008 and had to deal with a tremendous unemployment wave in the years thereafter, the Spanish retail industry suffered from a large drop in both value and volume (see graph). Though an improvement of the market slowly appeared again in 2012/2013, value and volume of the Spanish retail industry have not reached the same levels as before the crisis [5]. Of course, the Spanish economy is still growing. However, analyses show that the improvement of the market as it is observed in the graph is mainly caused by the rise of ecommerce. In fact, the ecommerce industry was one of the few Spanish sectors that reflected a double digit-growth in 2011 and 2012 [1]. What is more, the impact of the growth of the ecommerce sector on the retail industry in general is magnified by a rise in the size of ecommerce relative to retail in general. The percentage of ecommerce of the total retail industry in Spain doubled in the period 2013 to 2018 (from 3.5% to more than 7%) [3].

Retail sales in Spain [5]

Spain’s current ecommerce environment

There are currently three main trends that drive the Spanish ecommerce market [4]: first, logistics are massively enhanced by offering products online, which increase (worldwide) sales for many Spanish sellers. Second, when it comes to the usage of smartphones, Spain is considered to have one of the highest smartphone penetration rates in Europe, enabling further ecommerce growth [4]. Third, the final trend that arises due to market progression is the integration of (big) data analytics, artificial intelligence, and chatterbots. This is now the most relevant trend for industry participants, as it is the most recent one and consequently leads to many innovative developments and jobs within the sector. In terms of market environment, there are about 23.6 million ecommerce users in Spain, approximately half of its population, and this number is expected to grow to 29.2 million in 2021 [1]. Of the online transactions, more than a third are made by using Credit cards (34%), followed by cash (32%), electronic bank transfer (20%) and eWallet (14%). The most significant payment option in Spain is 4B, which has 20 million cards circulating in the country. After that, credit and debit cards of Euro6000 are also commonly in use [1]. Of the online purchases, the majority is done via the most popular websites of Amazon, Carrefour, eBay, El Corte Ingles, Mediamarkt, PC Componentes, Vente-Privee.com, Zalando, and Zara [2,3].
 

Future outlook and possible investment opportunities

As a market is rising, investment opportunities rise with it. In the retail sector in general, more and more investments are made: the Spanish retail market alone received 3.9 billion euros of investments in 2017, which was the largest investment volume in any sector of that year and a rise of 31% of investments in the sector compared to the year before [2]. As for the ecommerce sector specifically, it is hard to assess the total investment made as investments in online payment, websites and online stores all fall within its scope. The opportunities per sector within ecommerce are summarized on several websites (one example: link), confirming the wide variety of options to invest in (B2B, ecommerce services, ecommerce intellectual property rights, cross-border ecommerce, etcetera) [4]. Next to that, 75% of all investors in the Spanish retail and ecommerce sector are international investors [2]. Thus, when considering ecommerce in Spain as a next investment move, many opportunities can be considered.
 
 

Sources:

[1] Ecommerce in Spain. Ecommerce news. Available Online (link) [Last Accessed: 11.09.2018]
[2] Retail: What does the future hold for a sector in transformation – Spain February 2018. JJL Spain. Available Online (link) [Last Accessed: 13.09.2018]
[3] Online Retailing: Britain, Europe, US and Canada 2017. Centre for retail research. Available Online (link) [Last Accessed: 12.09.2018]
[4] Spain – Ecommerce, update 12.07.2018. Export.gov. Available Online (link) [Last Accessed: 12.09.2018]
[5] Tobias Buck (May 16, 2016), Spanish Retail: Deep Cuts in Stores, Financial Times. Available Online (link) [Last Accessed: 13.09.2018]

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