Czech Republic eCommerce
The sudden closure of retail shops in 2020 inspired the Czech Republic to make significant strides in eCommerce development.
With the sudden closure of retail shops in 2020 due to the Covid pandemic, the Czech Republic made signficant strides in eCommerce development. E-shop revenues rose by 26 percent compared to 2019 and reached a record almost $9 bln (CZK196 bln) in sales. New companies launched e-shops and retailers without in-person sales switched to building their online presence. The number of online shops increased by 8 percent to almost 46,000 e-shops in 2020. The share of online sales rose to over 16 percent of total retail sales.
Over 60 percent of Czech e-shops are built on commercial platforms, while about one third use open source solutions. There are over 200 agencies offering e-shop solutions in the Czech Republic. Eighty percent of the agencies use proprietary platforms to build e-shops, which diverges from the United States and Western Europe where third-party platforms and frameworks – often open source – are used more often.
In 2020, the top categories sold on Czech e-shops included electronics (36 percent), followed by home & garden products (around 20 percent), and clothing & accessories (13 percent). The fastest growth of 65 percent was recorded in the health and beauty category, which also includes disinfectants. Food purchases were the second fastest growing category. It is no surprise that the most purchased item online last year was a protective mask.
The most popular payment method for Czech customers – in 36 percent of the cases – included payment card purchases while around 25 percent of payments went through bank transfers. Again, thanks to Covid, cash on delivery purchases were discouraged, but remained somewhat popular with 28 percent share in 2020.
On July 2021, the European Union will introduce a reform to the VAT obligation for B2C e-commerce sellers and marketplaces which include launching one-stop-shop to EU VAT return and ending the low-value import VAT exemption. The aim is to boost cross-border online trade and promote trade across the EU’s digital single market by reducing compliance obligations. The impact on the Czech e-commerce scene is still unknown.
In 2021 Czech eCommerce is expected to encounter double digit growth, although probably slower than in 2020. With the recent uptick in cybersecurity attacks, more focus will be placed on security. Trends will include faster delivery solutions, a wider range of goods and further increase in mobile purchases which is already used for more than half of the purchases.
For more information contact Office.Prague@trade.gov.