Summary

E-commerce (electronic commerce) refers to the selling and buying products and services by transferring funds or information over an electronic network, mainly through the internet. The European e-commerce market has been registering strong escalation over the last few years, thereby offering exciting opportunities for online retailers across diverse sectors. Austria is one of the major consumer markets in Europe, and it is also an essential market for e-commerce. The primary selling medium for distance selling in Austria is the increased online shopping, which also includes smartphone shopping.

Key Highlights
The rapidly increasing urbanization and digitalization are the key factors driving the growth of the e-commerce market in Austria. The increased penetration of internet services and electronic devices like smartphones, tablets, and laptops has given a boost to the e-commerce market.
As a part of e-commerce growth in Austria, the government came up with new policies in 2021. For instance, In July 2021, VAT e-commerce packaging was introduced in the country. Similarly, The national transposition of the Omnibus-directive (New Deal for Consumers) and the directive on certain aspects concerning contracts for the availability of digital content and digital services and on certain aspects with respect to contracts for the sale of goods, and significant upcoming e-commerce regulations at EU-level: DSA/DMA were also introduced.
According to Eurostat, from a survey before 2021, 90% of people aged between 16 to 74 in the European Union used the internet, of which 74% had ordered or purchased goods and services for personal use. Online shopping surged by one percentage point compared with the year 2020.
According to the European e-commerce Report 2021, a significant increase in e-shoppers can be seen in 2020 due to the government restrictions imposed during the Covid-19 pandemic, which compelled customers to shop online. Austria recorded 74% e-shoppers in the same year.


Key Market Trends

Significant Growth in E-Commerce is Expected due to digital transformation


Digitalization is a tremendous opportunity for the current Covid -19 situation. It is revolutionizing the world of the profession, business structures, and value chains, as well as innovation and market structures. Most industries are switching toward using digital modes of retailing for their business. According to World Dank Data, approximately 88% of Austria's population is using the internet as of 2020. Internet usage and access have driven the usage of various electronic devices, which facilitates e-commerce.
The advancement in technologies like the usage of 5G is enabling greater innovation and speed. The European Commission has approved a EUR 3 billion Austrian aid scheme under the Recovery and Resilience Facility (RRF) to support the rollout of passive infrastructure for broadband networks in the parts of Austria where there is no current network able to provide a minimum 100MBPS download speed. This initiative is a part of Austria's strategy to address the growing business needs in the context of the digitalization of the country.
According to Ecommerce DB, the most often offered delivery service provider among online businesses in Austria is Osterreichische Post. Among those who said which service they use to convey their goods, 59% named Austrian Post as one of their options. Furthermore, DHL and DPD are among the top three shipping service providers in Austria, with 30% and 15% respectively.
Cross-border shopping is popular among Austrians. More than half of their online purchases are for things from other countries. Austria is one of the rare countries where local e-commerce sales are much lower than international sales. This is primarily due to the fact that the majority of the most popular merchants are situated outside of Austria and have yet to decide to create a store there. Amazon is a fantastic example in this regard. Austrians buy on the German site, and products are transported from there. Germany, Italy, Switzerland, China, and the Czech Republic are the most popular shopping destinations for Austrians.


Fashion is Expected to Hold a Significant Share


The concepts of e-commerce have revolutionized the fashion industry in multiple ways. Not only can the buyers shop from their homes, but they can also ensure that they can still keep their favored brands in their closets. Online shopping has increased in Austria too. According to the E-commerce news, Presently, 85% of Austrian customers shop online at least once a month, whereas 42% buy products online at least once a week.
Fashion enterprises are one of the most creative and vibrant sectors in Austria. They are present in the everyday life of millions of individuals and act as representatives of Austrian values, such as creativity, culture, innovation, and craftsmanship. According to Meta Triad, the apparel and fashion industry was USD 1.5 trillion in 2020 and is projected to reach 2.25 trillion dollars by 2025. The Austria-based Meta Triads aims to accelerate the digital transformation of the whole apparel industry.
Price remains a significant factor when buying, whether affordable or luxury goods, now that online shopping has become a trend. Third-party online retailers continue to evolve and consolidate the market as well. The Austrian market has many key players in online retailing such as Amazon, Zalando, MediaMarkt, Universal, Otto, H&M, and many more.
According to E-commerce news Europe, Amazon generated a total net sales of EUR 1.1 billion in Austria due to its incomparable pricing. The e-commerce company is followed by Zalando with 328.7 million euros in net sales, followed by MediaMarkt with 144.3 million euros in net sales. This shows that online retailing is growing at a fast rate in the Austrian e-commerce market.


Competitive Landscape

The Austria E-commerce Market is witnessing a rise in competitiveness among companies. The market consists of various major players, such as Amazon, Zalando, MediaMarkt, Universal, and Otto. In terms of market share, these significant players currently dominate the market. However, with increasing innovations in e-commerce, many companies are increasing their market presence by securing new contracts and tapping new markets.


In September 2021, Zalando, Europe's online fashion and lifestyle platform, announced its partnership with Not Just A Label, an international designer platform. The partnership will bring several emerging brands from diverse backgrounds to Zalando Designer, supporting Zalando's commitment to representing diverse brands and founders on its platform.
In February 2022, H&M announced the expansion of its second-hand fashion platform Sellpy in Austria. This platform will provide the circulation of used products across the customers and it is further promoting sustainable consumption.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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