What makes the Czech e-commerce market unique?
While global e-commerce markets are often dominated by a few major players, the Czech online retail sector presents an entirely different picture. It is a highly fragmented market, creating a unique competitive landscape where various platforms vie for consumers’ attention.
Mall.cz, one of the key players in the Czech market, was acquired by Allegro in April 2022, marking a significant step towards market consolidation. This acquisition is pivotal for Czech e-commerce as Allegro, a leading e-commerce platform in Poland, is introducing higher customer service standards, advanced logistics, and innovative technological solutions to the Czech market. As a result, Czech consumers gain access to a broader range of products and services, enhancing the market’s competitiveness and dynamism¹.
Other popular platforms among Czech consumers include Alza.cz and Heureka. Alza.cz is known for its electronics and technology offerings, while Heureka acts as a price comparison aggregator, helping consumers find the best deals across multiple online stores. This diversity of e-commerce platforms highlights the varied shopping preferences and needs of Czech consumers².
An intriguing feature of the Czech market is the relatively weaker position of Google in the e-commerce search context. This could be attributed to local consumer preferences, with many choosing alternative ways to search for products and shopping information, such as local search engines or directly visiting trusted online stores³.
The fragmented nature of the Czech e-commerce market suggests there is ample space for diverse marketing strategies and innovations, both for local entrepreneurs and international firms looking to establish a presence. This opens avenues for exploring how best to connect with Czech consumers, accounting for their unique behaviours and shopping habits. With its distinctive structure and consumer dynamics, the Czech e-commerce market is a fascinating case study within the global e-commerce landscape, offering valuable insights into how market diversity can shape online retail strategies⁴.
Growth forecast for the Czech e-commerce market
Analysing available data and forecasts, the Czech e-commerce market shows significant growth potential. Between 2023 and 2028, the compound annual growth rate (CAGR) of Czech e-commerce is expected to reach 9%⁵. This impressive growth is driven by an increasing number of internet users in the Czech Republic and the rising popularity of online shopping.
Forecasts from ECDB.com indicate that the number of e-commerce users in the Czech Republic will reach 7.4 million by 2027, a substantial increase from current figures. The market’s value is expected to grow to USD 11,521.7 million by 2028, reflecting the strengthening purchasing power of Czech consumers and their growing engagement with online retail⁶.
These predictions underline not only the rising market value but also the increasing share of e-commerce in total retail sales, supported by technological advancements, improved accessibility, and the convenience of online shopping. Further development of digital infrastructure and investments in logistics will be crucial to maintaining this growth trajectory and unlocking the full potential of the Czech e-commerce market.
Czech consumer preferences and payment methods
The Czech e-commerce market reflects distinct shopping preferences and payment methods, which are crucial for understanding the shopping dynamics in this country. An analysis of consumer habits shows that Czech shoppers value the convenience and variety offered by online platforms, with price transparency and product availability being particularly important to them.
Payment methods
Cash on Delivery (COD) remains one of the most popular payment options in the Czech e-commerce market. Statistics show that 88% of shoppers use this method, and nearly 40% consider it their preferred payment choice – a significantly higher percentage than in countries like Poland, where only 6% prefer COD.
This method is attractive for both traditional delivery and pick-up via parcel lockers, where consumers can pay in cash or by card. The absence of a COD option can deter up to 20% of potential customers, highlighting its importance in the Czech e-commerce landscape⁷.
At the same time, growing trust in digital payments is evident, with an increasing number of Czech consumers using payment cards and e-wallets. This signals a dynamic shift in shopping behaviour, where security and speed of transactions are becoming more valued⁵.
Challenges and barriers in the Czech e-commerce market
The growth of e-commerce in the Czech Republic faces a variety of operational and regulatory challenges that can impact the efficiency and reach of businesses in this sector.
Regulatory barriers
- Compliance with local regulations: Businesses must adhere to strict rules regarding data protection, cybersecurity, taxation, and customs regulations. Staying updated with these laws can be challenging, especially for newcomers.
- Frequent legislative changes: Dynamic changes in regulations require constant process updates, which can lead to additional costs and demand continuous attention.
Operational barriers
- Logistics and distribution: Ensuring effective logistics in the Czech Republic can be challenging due to the country’s geographical and infrastructural specifics, including difficulties in reaching remote regions quickly and higher delivery costs for less accessible areas.
- Courier service availability: Limited delivery options can affect the time and cost of product delivery to customers, a key factor in the competitive e-commerce environment.
Proposed solutions
- Investments in technology: Implementing modern IT solutions can enhance cybersecurity, optimise logistics, and improve tracking systems.
- Partnerships with local providers: Collaborating with local logistics firms can significantly increase distribution efficiency while reducing delivery time and costs.
- Legal education and consultation: Regular legal consultations and participation in training on local regulations can help businesses stay compliant and minimise the risk of legal obstacles.
Understanding and addressing these barriers can enable businesses not only to survive but also to thrive, gaining a competitive edge in the Czech e-commerce market.
Final thoughts
The Czech e-commerce market is characterised by rapid growth and a strong focus on modern technology. While cash-on-delivery payments dominate, there is a notable rise in the adoption of digital payment methods, reflecting increasing consumer trust in online transactions. The development of logistical and technological infrastructure will be key to overcoming operational challenges and improving delivery services.
Businesses should continuously monitor and adapt to local regulations to minimise legal risks and build consumer trust. Expanding internationally can open new opportunities, positioning the Czech Republic as a gateway to other European markets. Effectively leveraging these trends will allow businesses to succeed in this competitive e-commerce environment.
Sources
1. https://elogy.io/en/czech-republic-ecommerce-market-trends-2023/
2. https://ecommercedb.com/markets/cz/all
