Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
The eCommerce Innovation Lab (EIL) is a national office within the U.S. Field that positions the U.S. Commercial Service as a pacesetting resource for U.S. businesses through empowering client-facing staff with a baseline understanding of digital trade, enabling quicker response to client needs by providing value add digital client counseling. This helps ITA to adapt alongside industry to remain ahead of the curve on client service, trade promotion, and trade policy development through more knowledgeable and effective collaboration.
Our office has created a U.S. Field-based client digital strategy counseling process that focuses on these key concepts:
- eCommerce is a sales channel that crosses all industries that sell or promote brand awareness online. eCommerce as a sales channel is part of a businesses’ B2B and/or B2C digital strategy;
- A digital strategy addresses the basic needs of a business required to succeed in cross-border ecommerce sales channels. Our counseling process focuses on identifying these needs;
- eCommerce Key Performance Indicators allows businesses to understand where their digital efforts are paying off;
- eCommerce Business Service Provider Directory (BSP) provides the much-needed follow-up to our digital strategy recommendations that will help the client to succeed in overseas markets;
Italian consumers are increasingly embracing digital services and the market is becoming more sophisticated. The digital evolution and growing internet penetration rates are fueled by investment in infrastructure from the Italian Government and key operators. Nevertheless, Italy still lags behind in fixed broadband and many SMEs lack funds to upgrade infrastructure. In Italy only 19% of SMEs have connection speeds of 100 Mbit/s or higher. E-commerce in Italy is developing rapidly and has registered annual double-digit growth since 2014. Although the Italian digital economy trails other major European countries, e-commerce is poised to continue its upward trend with Business-to-Consumer (B2C), Business-to-Business (B2B), and Consumer-to-Consumer (C2C) transactions all posting solid growth. Turnover from e-commerce in Italy was estimated at 48.5 billion EUR in 2019, totaling a 17% growth over 2018. The sales of goods and products online increased by 15% in 2019 for a total market value of $36 billion, while services sold online will grow by a factor of 7%.
Current Market Trends
The number of Italian web shoppers is constantly increasing. In 2019, 7% of all Italian retail sales were completed online, up from 6% in 2018. Sales are increasingly being conducted from mobile devices, which now account for roughly 40% of all digital sales. The main factors fueling growth of e-commerce in Italy are:
- improved Internet access infrastructure and wider broadband connection availability;
- one of the world’s highest rates mobile and smartphone diffusion, which will enable business and consumer segments to take advantage of new technologies for e-commerce transactions;
- increasing recognition of e-commerce as a tool to serve and support customers more cheaply and efficiently;
- improved transaction security; and
- Italian legislation recognizing the legal validity of digital signatures and digital contracts.
Domestic e-commerce (B2C)
The B2C e-commerce market in Italy generated $36 billion in 2019, an increase of 14% over 2018. The number of Italian web shoppers is constantly increasing and 93% of the Italian population is now online. Despite the positive trends, in absolute terms the Italian B2C e-commerce market was still only worth one third of the market in the United Kingdom, half of the German market and two third of French market in 2019. About 80% of online shoppers make at least one purchase per month with an average annual expenditure of $755 per user per year.
The 2019 Milan Polytechnic University E-commerce Report estimates that the total sales from Italian websites to foreign consumers totaled $29.5 billion. Of the l sales originating from .it domains, 85% were sold domestically while 15% were sold abroad. On the other hand, Italian imports of foreign goods and services online reached $8.1 billion. According to Postnord’s 2018 E-commerce in Europe Report, the most popular foreign e-shops used by Italian customers are located in the United Kingdom (19%), China (18%), and Germany (16%) In terms of foreign e-commerce sales, Italian companies sell to the European Union with 21% selling online in France, 18% in Germany, and 14% in the United Kingdom. Outside the EU, 14% of Italian companies sell to the United States, 6% to Asia (5% to China, 2% to Japan, and 4 % to other Asian markets), and 3% to South America.
ECommerce B2B transactions accounted for $463 billion in 2019 with a 14% increase in value from 2018. Transactions between businesses and central/local government only accounts for 15% of all B2B transactions in Italy.
Despite its rising trend, digitalization rates among Italian firms is quite low, and the majority of small- and medium-sized companies are far from embracing a digital transformation process which would improve and cut the costs of B2B relations. In 2019, about 50% of ecommerce B2B transactions were between producers and resellers. About 120,000 companies used B2B tools in 2019 (EDI – Electronic Data Interchange, Extranet, and B2B Portals) in their relationships with clients and suppliers. 250 eProcurement platforms are used in Italy by large enterprises to manage the electronic orders of clients and suppliers.
In addition, the obligation of delivering electronic invoices to the Italian Public Administration (PA) has resulted in a push towards digitalization for both private and State-owned companies.
The most common B2B e-commerce model is e-business, which entails the digitalization of corporate processes in conjunction with clients and suppliers (supplier selection, management of customer orders, after-sale services, etc.). In addition, over the last few years web portals for B2B e-commerce (like e-commerce B2C models) have become increasingly popular, as well as B2B Marketplaces.
B2B e-commerce applications and e-procurement are registering continued growth. The most active players implementing B2B solutions are in the automotive, pharmaceutical, consumer goods, electronics and consumer electronics sectors. Specialized B2B applications in key “Made in Italy” sectors are also gaining momentum; there is an estimated 350 B2B platforms across different industries. Virtually all major Italian industrial groups utilize e-procurement and forecasts indicate that in the next few years up to 80% of all company purchases will be online.
For information on public sector e-procurement, see the “Selling to the Public Sector” section below.
eCommerce of Services
International B2C retailing platforms have a strong influence on the Italian eCommerce market. Popular eCommerce websites in Italy include: Subito.it, Aliexpress.com, Zalando.it, Autoscout24.it, Groupon.it, Yoox, and Pixmania. Furthermore, Banzai Srl, Italy’s leading e-commerce operator controls ePrice.it and Saldiprivati.it.
Many companies in Italy offer successful omnichannel digital solutions and international eCommerce sites which are multilingual, multi-currency, multi-collection and multi-brand. These types of businesses support brands in managing all aspects of their own e-stores, including retail strategy, activity planning, communication, web marketing, store management, customer care, invoicing, and payment collection. These channels offer opportunities for U.S. small- and medium-sized companies interested in selling to the Italian market.
eCommerce Business Service Provider Ecosystem
Popular marketplaces, offering products in a wide variety of categories, including: www.amazon.it, www.ebay.it, www.mediashopping.it, www.aliexpress.it, www.subito.it, www.dmail.it. In addition, there are a range of online marketplaces specialized by sector. The following list is a selection and is not meant to be comprehensive.
- Travel and tourism: www.edreams.it, www.expedia.it, www.it.lastminute.com, www.trenitalia.com, www.italotreno.it, www.volagratis.it, www.tripadvisor.it, www.opodo.it, www.kayak.it , www.skyscanner.com, www.trivago.it, www.booking.com
- Information technology and consumer electronics: www.eprice.it, www.euronics.it, www.monclick.it, www.mrprice.it, www.mediaworld.it, www.unieuro.com, and www.trony.it
- Fashion: www.yoox.com, www.zalando.it, www.saldiprivati.com, www.privalia.com, www.vente-privee.com,
- Books, music and video: www.amazon.it, www.ibs.it, www.unilibro.it and www.lafeltrinelli.it
- Couponing: www.groupon.it, www.groupalia.it are among the most important sites.
- In addition to these marketplaces — mostly B2C — there are many B2B marketplaces and virtual malls specialized by industrial sector.
- Web Resources
- Acquisti in Rete – AiR (“Public Procurement Online”) — The AiR portal provides access to a fully functional e-procurement platform https://www.acquistinretepa.it/opencms/opencms/menu_livello_I/header/Inglese/PROGRAM
- Netcomm — Italian E-Commerce Consortium http://www.consorzionetcomm.it/
Google is the most popular search engine, primarily the Italian version (www.google.it), but also in its .com version in English. The other most popular search engines are www.yahoo.it, www.virgilio.it, www.libero.it, http://it.msn.com, www.bing.com, and www.tiscali.it.
U.S. companies can contact each search engine to submit their sites for listing free of charge but can also subscribe to special advertising services for a fee. U.S. companies may also hire local firms specialized in “web positioning” and search engine marketing services for website optimization. Although not required, it is advisable for any U.S. company that wishes to rank high on a local search engine to translate at least keywords and some text into Italian.