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Domestic online stores sold fewer products in 2023 than a year earlier, and the first quarter of this year also saw a continued loss of momentum in Hungarian e-commerce after the strong growth during the pandemic, Világgazdaság reports.
Domestic online stores sold 7.9 percent fewer products in 2023 than a year earlier. The reasons include the steady decline in purchasing power over the past two years and the rise of Chinese e-tailers. In this market environment, domestic businesses are finding it increasingly difficult to compete for online shoppers, as a recent market report by research firm GKID revealed.
On a volume basis, the sector grew by only 6.1 percent in the first quarter of 2024. However, data shows that this subdued growth was not driven by Hungarian online stores, whose turnover has actually declined, but rather by Chinese retailers with their cheap offers and advertising pressure.
As the number of domestic retailers selling abroad remains low, exports may represent an untapped opportunity and a solution for Hungarian companies,
logistics firm Packeta told Világgazdaság.
Major Chinese traders are rethinking logistics after the EU’s 2021 customs regulation change and building faster, duty-free routes for European buyers. This has made Hungarian (and European) shoppers more open to cheaper offerings as purchasing power has declined. Asian traders translated their websites into local languages – with varying degrees of success – and launched an intensive online advertising campaign.
The biggest global players, mainly Chinese retailers, had more than one million Hungarian customers in the first quarter of 2024.
According to GKID, this is a challenge not only for online, but also for traditional retailers. As the research firm points out, a Hungarian e-tailer has two possible futures in the era of global e-commerce: to remain a marginal player in its home market or to grow into a regional player. The Czech and Polish players have been on the path of expansion for years, and this has been a successful solution for them, the report concludes.
Via Világgazdaság, Featured image: Pexels