E-commerce Export Magazine: Czech Republic23.8.2022
The highest number of e-shops per inhabitant, strong competition and demanding customers – this is how we could characterise the Czech market in brief. Does this frighten you? If you want to establish yourself in Central and Eastern Europe, the Czech Republic is one of the key countries for doing so, and it offers plenty of opportunities if you’re ready to grow. Let’s take a look at them more specifically.
The Czech Republic as a gateway to Central Europe
The Czech Republic at present has a population of more than 10.5 million people, and up to 81 % of the population regularly use the Internet. Annual growth in e-commerce was 17 % in 2021. The Czech Republic has high potential on the European e-commerce market not only due to its advantageous location (next door to big players such as Germany), but also because of the high profits and existing infrastructure. Payment is made in the country’s own currency – the Czech crown (1 euro = 24.34 Czech crowns).
Together with the experts we could at present characterise the Czech market as too saturated, with a relatively stable situation in individual segments, with high competition and an extremely high standard in the area of services and deliveries to customers.
Size of the e-commerce market
In the ranking of countries with the largest e-commerce market, the Czech Republic occupied the 43rd place in 2021 with revenues of more than 4.5 million euros. At present there are more than 46,000 e-shops, and more than half of them are built on commercial platforms and about one-third use open source solutions.
The most common is particularly the sale of physical goods to private end users, mostly via a smartphone, tablet or computer. Over the long-term the top-selling categories are electronics, followed by home accessories and clothing. Food and cosmetics are mainly among the gradually growing segments. Czechs are lovers of gardening, too, so it’s no surprise that this segment is also extremely popular.
Growth in the past, growth in the future
Based on statistics, there is a high assumption that the growth of the e-commerce market will continue in the coming years. Year 2020 was particularly crucial for the Czech market, when the pandemic situation helped lead to growth 26 %. The total annual growth rate is estimated at 11 %, which should lead to a total market volume of up to 8.9 billion euros by 2025.
Despite the prevailing opinion that the Czech market is already saturated, it still offers many opportunities for growth and success. There is still interest in investing in e-commerce. We cannot forget two other key facts: there are not yet any dominant markets (Amazon-style) and many foreign players (such as About you or Wolt) repeatedly prove that you can win quickly here.
Biggest players on the Czech market
Even Czech e-commerce has favourites that move the market the most. For 2021, the following e-shops occupied the top five positions:
- Alza.cz – main category: electronics and media
- Rohlik.cz – food and personal care
- Mall.cz – furniture and appliances
- Czc.cz – electronics and media
- Datart.cz – electronics and media
E-shops from the first three rungs of the ladder together account for 35 % of online revenues in the Czech Republic. Even the five main segments have their specific winners.
- Clothing, fashion – Zalando.cz, Hm.com, Bonprix.cz, Eobuv.cz
- Electronics and media – Alza.cz, Czc.cz, Apple.com, Datart.cz, Mall.cz
- Toys and hobbies – Alza.cz, Mall.cz, Hornbach.cz, Zoohit.cz, Sportisimo.cz
- Food and personal care – Rohlik.cz, Notino.cz, Tesco.cz, Drmax.cz, Alza.cz
- Furniture and appliances – Alza.cz, Ikea.com, Mall.cz, Okay.cz, Moebelix.cz
One of the fastest growing e-shops in recent times is, for example, Zalando-lounge.cz, whose sales in 2021 increased by 167 %. Other champions of rocket growth on the Czech market are Soliver.cz and Vochoc.cz.
How the Czech customer behaves
You can obtain a typical Czech customer in several ways. If we had to name the three most important elements on which a customer in the Czech Republic makes a decision, they are quality, price and comfort. Let’s take a more specific look at individual trends in the behaviour of Czech customers, which you should not underestimate.
Popularity of comparators
Customers tend to look for the best possible price before placing an order; they use comparators and usually look carefully at each offer to find the best one. Czech customers often look for the cheapest alternatives in foreign markets, too, especially in China.
Rapid and reliable delivery
Aside from price, delivery – its speed, reliability and flexibility – is exceptionally important for Czechs. Therefore, many e-shops try to offer a wide range of different delivery and pick-up options. Speed is key – customers are used to waiting 2–3 days for their orders, but in the capital they consider same-day or next-day delivery to be the standard.
The option of picking up an order at a store for free is also important; e-commerce experts point out that if customers cannot find a free pick-up option nearby, they often decide to shop elsewhere. We should also remember product availability – up to 30 % of customers will leave a site if they do not see the desired product marked as in stock or available.
The quality of communication with the customer is also important – automatic e-mails regarding the current status of an order or accurate information about delivery are a must. Any gap in communication or waiting may cause the customer to choose another e-shop in the future.
Ecological and sustainable
Like customers in Slovakia, the ecological aspect is becoming ever more important – many Czech customers want ecological packaging and sustainable delivery, and more and more people prefer local brands and stores, too.
Czech customers also like to order goods from abroad. Aside from the already mentioned China, the leaders are Germany, Poland, Slovakia and the Netherlands.
Popular payment methods in the Czech Republic are credit cards, online bank transfers, mobile payments and electronic wallet payments. You can also choose from a wide scale of different payment gateways in the Czech Republic, but before choosing, don’t forget to consider compatibility with the accounting system and CMS in addition to the price.
|Payment gateway||Price list of payment gateway services|
Logistics of the Czech market
Another trend is visible on the Czech market – online shops come with their own fleet. Not only big players like Mall Group and Rohlik, but also strong local brands know that having their own fleet increases their flexibility and performance in logistics, and increases credibility with end customers.
The Czech Republic plays an important role in European logistics. Its location in the vicinity between Germany, Poland, Austria and the not-so-distant Hungary confirms its advantageous position. The advantage of the Czech Republic compared to Central European countries is the high level of resources it has to carry out logistical processes.
Comparison of delivery companies
The most popular delivery companies in the Czech Republic are Zásilkovna, Česká pošta, DPD, PPL and GLS.
Among the most well-known Fulfilment services in the Czech Republic are Balíkobot, Expandeco, Skladon, Zásilkovna or Shipmall.
The general rules of e-commerce in the Czech Republic are intended to improve consumer protection and prevent misleading behaviour by traders. The Czech amendment also focuses on digital products (software or SaaS solutions), the relationship and advertising of suppliers and partners, and the conditions for returning, exchanging and claiming goods and services. Several competences are transferred from the Czech Trade Inspection to the courts. As the expert also advises in a Facebook post, you should first study the new rules in detail and implement the changes gradually and strategically. For more detailed information, feel free to check out the full amendment to the law.
- All personal data of website visitors within the EU are managed on an opt-in basis. (General Data Protection Regulation).
- The website operator is obligated to inform users in advance of the scope and purpose of the processing of personal data.
- It is also obligated to offer users the option of refusing the processing of personal data.
Products, services and marketing
- Double quality of products is generally prohibited. Previously applicable in the food sector, under the new amendment this prohibition is now applicable to all sectors.
- The amendment puts a stop to artificial likes, false star ratings and the deletion of negative reviews. From now on, all reviews used must be verified and the method of verification must be communicated.
- The new rule also applies to the calculation and communication of discounts – you are now required to calculate the discount amount from the lowest amount you have sold the product for in the last 30 days.
- The unobtrusive adding of products to the online cart is also over; the customer no longer has to pay for them.
- The text on the button that the customer uses to submit the order must now be clearly worded so that the customer is agreeing to pay for the product.
- You must deliver the goods no later than 30 days from the date of purchase, unless you and the customer explicitly agree otherwise.
- You no longer need to send a printed version of the warranty, invoice and terms and conditions with the product; a digital version to the customer's email will suffice.
- The period of liability for defects is also changing. If a customer discovers that a product is defective from the factory, he or she can contact the manufacturer with the problem up to a year after the purchase.
The Czech Republic had up to 9.66 million internet users in January of 2022. As for the rate of Internet penetration, its level among the entire population has reached the level of 90 %.
According to the analysis, the number of social media users increased by 660 thousand between 2021 and 2022. Facebook is currently used by 4.85 million users in the Czech Republic, LinkedIn by 2 million and Instagram has 3.60 million registered users. The Czech Republic registers up to 1.5 million active users on the TikTok platform.
The Czech Republic has a large share of the online market, with 81 % of the population using Google. In relation to search engines, up to 15 % of Czech market users prefer Seznam.cz. As part of an SEO strategy, aside from the Seznam search engine, one should remember that Google is popular especially among young people, so the number of its supporters will likely increase. The Skilk advertising system from Seznam is used in the Czech Republic for PPC. It offers several types of campaigns which are partially similar to those offered by Google Ads.
Ranking of the largest comparators in the Czech Republic
- Heureka.cz – wide spectrum of products
- Zbozi.cz – wide spectrum of products
- Srovnavame.cz – wide spectrum of products
- Glami.cz – fashion and accessories
- Favi.cz – home and decoration
- Biano.cz – home and decoration
Current market trends
This strategy is definitely a trend that is growing and is beneficial in particular for brick-and-mortar stores that are seeing a decline in profitability in an offline environment. The omnichannel strategy has future potential. It offers many benefits that help a business growth, such as the ability to achieve higher accessibility, increase sales and traffic, or integrate all customer contact points.
A combination of affiliate marketing and influencer marketing
Affiliate marketing in combination with influencers can be beneficial for both parties. Affiliate marketing brings more completed purchases, while influencer marketing addresses a greater number of potential sellers, while also taking care of the good name of the brand and increasing trust in a product. It should not be forgotten, however, that working with influencers is expensive and the results only come after a long time. You can read more detailed information about cooperation with influencers in the article on Influencer marketing.
This software application is not new in the Czech Republic, but it fits perfectly into our current trends. The fact is that people, especially younger generations, increasingly prefer communication in the form of text messages. Chatbots are a great advantage, because they save the customer time when solving a problem, increase brand awareness and, above all, provide customers with immediate feedback.
Are you interested in operating on the Czech e-commerce market? If you want to rocket your business further, don’t hesitate to contact us.