Czech Republic - Country Commercial Guide
eCommerce

Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.

Last published date: 2022-01-30

Overview

According to the Czech Association for Electronic Commerce, in 2020 the eCommerce market was worth just over $9 billion. This reflects a growth of about 27% from 2019, with the largest market segment is fashion, which accounts for 29%, then electronics with 28%, and toys, hobbies and DIY with 23%.  The Czech eCommerce market is among, if not the fastest growing within Europe .

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% 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 as well as online grocery delivery 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, offering everything from contact lenses to car tires.  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), buy via smartphones, while the financially strongest group (ages 25-45) uses smartphones as well tablets, followed by the remaining population mainly using 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 that 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 in areas such as computers and software; telecommunications; consumer electronics; chemicals; hi-tech; automobiles; transportation; industrial supplies; stone, glass and jewelry; textiles; wood; animal products; etc.  Sterkh, Pauls Trading, No Logo, Profod, and Suprotech are among the leading companies. Sales-channels include: direct sales, email marketing, search engine marketing, social & display ads, search engine optimization, public relations, offline ads, existing platforms, and affiliate marketing.

Cross-Border eCommerce

Interest in cross-border eCommerce is growing among Czech customers. The decision to buy through 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 billion), Poland ($12.7), Slovakia ($9.2 billion) and China ($8 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

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 eCommerce web services can be found at Shopify. Czech companies use the above-mentioned non-Czech websites.

Online Payment

While access to the full spectrum of credit cards is available in the consumer banking market, cash-on-demand remains the most popular payment method.  45% of consumers will choose to pay cash on delivery, while roughly 30% of payments were made via bank transfer. During the Covid pandemic, more online and brick-and-mortar retailers were insisting on cashless payment, which could bring about significant changes in the post-pandemic economy.  Electronic banking, as well as mobile banking, is also becoming more accepted, and payments through direct bank transfers are also popular.

Mobile eCommerce

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 roughly 54 percent of all e-commerce transactions.  The widespread adoption of increasingly powerful smartphones with larger screens and access to faster and more reliable connections speeds is improving the eCommerce experience. Meanwhile, more and more retailers are optimizing their sites for mobile shopping.

Digital Marketing

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 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. In 2020, companies spent over $800 million on online advertising.  Banner advertising and search engine advertising together accounted for the majority of the digital marketing strategies employed by firms.