Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
The Czech eCommerce market is among the fastest growing within Europe. According to the Czech Association for Electronic Commerce, the market was worth $8.3 billion in 2021. Approximately 54 percent of the total Czech population shops online. eCommerce now holds a 16 percent share of total retail in the market.
eCommerce is widely used in the Czech Republic due to the availability of online shopping for a variety of goods, particularly among local merchants who have carved out a niche for themselves in the eCommerce sphere. Competition is very strong among local Internet retailers in the Czech Republic, and unlike other European countries, only 15 percent of Czech consumers have purchased items from outside the borders. Mobile platforms dominate the space. Alza.cz and Mall.cz are among the dominant players for a wide range of consumer goods. Online food delivery apps have made a strong showing, particularly in light of the Covid crisis.
Current Market Trends
Virtual shopping is gaining in popularity with several Czech firms attracting clients with cost savings and home delivery. Some global Internet marketplaces are active with localized sites but most major U.S. firms are still absent from the market. The youngest generation (ages 16-24), purchase products and services via smartphones, while the financially strongest group (ages 25-45) uses smartphones and tablets. The remaining population mainly uses desktops.
B2B (B2C) eCommerce
The Czech government strongly encourages B2B and B2C eCommerce. These are conducted through well-known business platforms and strategic partners. An eShop can be operated by both Czechs and foreigners. Both need to obtain a trade license from the Czech Trade License Office, unless they are registered elsewhere in the EU. Both also need to be registered with the Czech Commercial Registry. Foreign entities with an established eShop elsewhere in the EU, may wish to use a Czech Republic address. The operator of an eShop needs to determine which legal jurisdiction governs relationships with its customers to ensure they fulfill all statutory obligations (e.g. rights and obligations of the parties to the contract, customer claims in the case of defects or limitation periods, etc.). There are no market barriers and the infrastructure is integrated with that of other EU countries.
The Czech Republic offers many ebusiness opportunities for worldwide buyers and sellers, including computers and software, telecommunications, consumer electronics, chemicals, automobiles, industrial supplies, glass and jewelry, and animal products. Sterkh, Pauls Trading, No Logo, Profod, and Suprotech are among the leading companies. Sales-channels include direct sales, email marketing, search engine optimization, and public relations.
Interest in cross-border eCommerce is growing among Czech customers. The decision to purchase via foreign online stores is most often based on lower prices, and on access to products not available in the Czech Republic. The markets most often mentioned for cross-border eCommerce include Germany ($42.7 billion) and China ($8.7 billion), followed by other EU countries and the United States. Customer support and site trustworthiness are important for Czech customers. For cross-border eCommerce, the most sought after items include digital products and electronics, followed by clothes, jewelry/watches and cosmetics.
eCommerce services include legal, accounting and consulting services; trade and tax compliance; PR and marketing; and business opportunities (B2B sales). Lists of trade lead contacts for manufacturers, distributors, wholesale agents, buying offices, importers, and exporters are available at Scalefast while eCommerce web services can be found at Shopify. Czech companies use the above-mentioned non-Czech websites.
According to the J.P. Morgan’s Global Payments Trends Report 2021, business and consumer payments are almost evenly split. Cash accounts for 32 percent of payments while card and bank transfer accounts for 30 percent 28 percent respectively. The ongoing trend of cash payment preference can be attributed to the continued popularity of paying for online orders at cash machine-style terminals also knownas SuperCASH. People between the ages of 25-34 are the largest group that purchases online. In 2020, 91 percent of the group shopped online, compared to 66 percent in 2019. During the pandemic, the proportion of older people who shop online also increased. Online grocery shopping among this population grew by 760 percent.
Mobile devices are a key platform for digital content and communications and they are rapidly gaining ground in the retail and commercial domains. This development is driven by the huge growth in smartphone sales. Mobile transactions account for roughtly 53 per cent of all eCommerce transactions. The widespread adoption of increasingly powerful smartphones with larger screens and access to faster and more reliable conections speeds is improving the eCommerce experience. Meanwhile, more and more retailers are optimizing their sites for mobile shopping.
Czech digital marketing began in 2004. Only 43 percent of companies invested in Internet advertising at that time. By 2012, smartphones had become popular for eCommerce which resulted in a greater use of digital advertising. Alza, the best known Czech eShop, opened its mobile operation in 2012. Digital marketing agencies offer advice, assistance, and eCommerce marketing platforms. To successfully enter the Czech market, a company must be technology- and data- driven. Companies spent over $1.2 billion on online advertising last year. Still, this accounts for only 25 percent of total spend on marketing. Display advertising and serach engine advertising account for almost half of the digital marketing strategies employed by firms.