The current economic situation in Ukraine

Despite all the difficulties, Ukrainian e-commerce is not giving up – and its potential is greater than many people think.

The economic situation in Ukraine continues to have an impact on e-commerce there. Revenues in the sector have fallen by 87% since an estimated five million people have fled the country. The war has forced half of Ukrainian businesses to close completely, and the rest are operating at reduced capacity.

Nevertheless, it is essential that the industries remain productive and generate tax revenues for the state. Ukraine is therefore attempting to restore the normal functioning of the economy even in this difficult situation.

Trends even suggest a return to previous figures. Between 2024 and 2029, an average annual growth of 22,87% in revenues is expected, which would lead to a market volume of approximately €4,559 million by 2029.

What do Ukrainians buy the most?

Despite the present situation in Ukraine, statistics show a gradual revival of shopping activities there. Some indicators – the frequency of food purchases for example – have already returned to pre-war levels. Electronics and household appliances grew by 25% and clothing and footwear by 14% compared to 2022–2023. The largest investments are directed at medicines, children’s goods and durable or ready-made food.

Since people are spending more time at home – from everyday activities to entertainment – shopping online is growing.

Advertise where they’ll find you

Ukrainians are still very active on price comparison sites and marketplaces. The leading platforms are hotline.ua, ek.ua, maudau.com.ua, moyo.ua and bereg.ua.

Regarding revenue share, Google Ads (34%) is the most effective, followed by organic search (22%) and Direct Traffic (13%). Facebook Ads achieve only 2%; therefore, it’s worth considering price comparison sites or the online grocery segment.

What are the advantages of expanding into Ukraine?

Ukraine is a market with huge potential and a large population, and it engages with almost all industries. As with any expansion, both advantages and disadvantages need to be considered.

Transparent tax system

One of the strongest drivers of Ukraine’s offer for foreign e-shops is its transparent tax regime.

When entering the Ukrainian market, you are free to choose a tax regime based on your income. Small businesses have a simplified system available that significantly simplifies record-keeping. What’s more, the country offers:

• e-resident status,
• the possibility of registering as a Group 3 entrepreneur without the need for a physical presence in Ukraine,
• a unified tax in the amount of 5% of income,
• full automation of taxation and accounting for e-residents.

Available labour force

You can find specialists for almost every position in Ukraine. Average wages are lower than in many European countries, which allows you to lower operating costs and increase margins.

Competitive advantage

Because of the war, many e-shops are worried about expansion; this gives you a significant competitive advantage. Businesses that dare to invest into this risky but promising market can gain more market share and strengthen their brand. Furthermore, entering at a time of low competition will allow you to more effectively build customer relationships, localise services and create long-term strategic benefits.

What are the disadvantages of expanding into Ukraine?

Political and economic instability

Investment, consumer confidence and spending are all falling, slowing economic activity. Supply chains are disrupted, which leads to supply problems and rising costs. The ongoing loss of jobs is at the same time worsening the social and economic conditions.

Transport and logistics problems

Restrictions on movement and increased risk for carriers cause delays and higher costs. Transport routes can be blocked or dangerous, so longer and more expensive alternatives are often necessary. Strict security measures and higher insurance premiums are in the end reflected in the price for customers. Flexibility and innovative logistics solutions are therefore essential.

Employee health and well-being

War significantly worsens the health and psychological state of employees. Limited access to healthcare and a lack of medicines make their work even more difficult, and this reduces overall performance.

What are the disadvantages of expanding into Ukraine?

Political and economic instability

Investment, consumer confidence and spending are all falling, slowing economic activity. Supply chains are disrupted, which leads to supply problems and rising costs. The ongoing loss of jobs is at the same time worsening the social and economic conditions.

Transport and logistics problems

Restrictions on movement and increased risk for carriers cause delays and higher costs. Transport routes can be blocked or dangerous, so longer and more expensive alternatives are often necessary. Strict security measures and higher insurance premiums are in the end reflected in the price for customers. Flexibility and innovative logistics solutions are therefore essential.

Employee health and well-being

War significantly worsens the health and psychological state of employees. Limited access to healthcare and a lack of medicines make their work even more difficult, and this reduces overall performance.

Steps to successful expansion

Market research and competitive analysis

As with any new country, first dive into the data: map the market size, the expected growth and the most important segments. Find out who your Ukrainian customers are; what their pain points are, and what they expect from an e-shop.

At the same time, analyse competing projects and highlight their weak points – this is where you can gain an edge.

Targeted localisation of content

Your website, marketing materials and customer support should speak authentic Ukrainian that respects local customs, traditions and holidays. It’s not just a common translation, but a complete adaptation of tone, vocabulary and visual presentation, so that you inspire trust in your customers.

Let’s add a CTA in the sense of: Do you want to manage your expansion to Ukraine with full data certainty and without unnecessary “blind” testing? Get in touch with us – we’ll prepare a comprehensive, numerically-based expansion analysis tailored to your e-shop.

Partnering with local players

Local partners will provide you with valuable information about the preferences and shopping habits of Ukrainian customers, thanks to which you can precisely target your offer and marketing.

They will also help you navigate legal and regulatory requirements or provide efficient logistics and distribution – this will shorten delivery times and increase your clients’ satisfaction.

OpiTip: After the war started, Ukrainians learned to save and plan their purchases in advance. By cooperating with local players, you’ll strengthen your credibility and visibility in the market and thus increase the chance that they will buy from you.

Optimising logistics

In unstable conditions, choosing a flexible and secure logistics strategy becomes crucial. Choose reliable local carriers with experience in different regions of Ukraine.

Also consider partnering with local sellers to create distribution points – this will help you reduce transportation costs. Don’t forget to have backup solutions ready – such as temporarily relocating your distribution points or quickly adjusting courier routes – in case the security situation deteriorates.

Marketing and brand building

Creating a strong marketing strategy is key for increasing your brand awareness and attracting customers in the Ukrainian market. Begin by analysing the market and identifying your target audience. Understanding the needs and preferences of Ukrainian consumers will enable you to adapt your marketing activities to be as effective as possible.

OpiTip: Ukrainians are online more than ever, especially during a war. Therefore, focus as much as possible on online communication. Invest in PPC campaigns on Google and social networks; these can quickly increase the visibility of your brand. Likewise, email marketing can be an effective way to stay in touch with customers and inform them about new products and promotions.

If you are considering expanding into Ukraine, it is essential to have sufficient information and support for the successful implementation of your plans. Do you want to learn more about expanding into the Ukrainian market? We’ll help you every step of the way to success.