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Heureka eCommerce Insider: E-commerce grew 80% year-on-year in last year’s first quarter,  but this year it is down 25% from last year

19. 04. 2022 | Adéla Berková

The current decline in e-commerce sales by one quarter compared to the first quarter of 2021 still constitutes growth compared to the pre-pandemic period. Last year’s lockdown and the resulting shift of people’s shopping from brick-and-mortar stores to the internet is to blame for the year-on-year decline, while the mood in society and rising prices caused by high inflation have not contributed either. The average order value at e‑shops reached CZK 1,390 in the first quarter. Customer satisfaction with e‑shops was 95.4%. According to analysts’ estimates, the second quarter will bring more favourable figures and the whole year will benefit from how significantly the market accelerated last year. The eCommerce Insider for the first quarter of 2022 is brought to you by the shopping guide.

The numbers are above pre-pandemic levels

Last year’s first quarter saw e-commerce grow by 80% year-on-year, so this year’s year-on-year decline was to be expected, according to Tomáš Braverman, head of the Heureka Group. “It must be stressed that this year’s figures cannot be compared with last year’s exceptional situation. The year-on-year decline is more modest than last year’s outstanding growth and when we look at the market in the long term, we are still well above pre-pandemic levels. People have not stopped shopping online,” explained Tomáš Braverman, CEO of the Heureka Group. The year-on-year decline is due to a slump in large segments such as electronics, large appliances and kitchen electronics. “This year, retailers offered lower discounts during the January sales. People shopped this segment massively online last year and this year the brick-and-mortar world reopened to them,” explains Braverman.  Apart from the price hikes, the situation in Ukraine has also played a significant role in the trend. “With the outbreak of the war, we have seen a drop of almost a full third in online purchases virtually day-to-day in the data,” Braverman added.

Jan Vetyška, Executive Director of the Association for Electronic Commerce, has a similar view of the market situation: “This year’s first quarter confirms our expectations from the beginning of the year. We are comparing periods that are almost impossible to compare. While last year’s tough lockdown brought dramatic growth in online sales, this year we are comparing a “normal” quarter, still affected by geopolitical influences and inflation, with the extraordinary situation last year. From our point of view, it is important that Czech e-commerce is showing growth compared to the pre-Covid period. Were it not for Covid, the current figures would be in line with prior growth in the range of 10-15% per year.”

Hobby, home and garden are growing, people are going online to save energy

For example, the perfume segment, which declined significantly last year due to the coronavirus crisis, is growing year-on-year, while online sales of heating systems, fireplaces, stoves and fuel, products whose online sale was kick-started by the energy crisis, are also doing well compared to last year. In general, hobby products, which people learned to buy online during the lockdown last year, are growing. Indeed, hobbies, the desire to rest during activities that fulfill us and the need to relax will boost online purchases in the next quarter, according to Tomáš Braverman. “Naturally, market development will depend on how the situation in Ukraine evolves. However, we will definitely be buying home and garden equipment, furniture, hobby supplies and, of course, sports gear. People will be looking for ways to recharge their batteries,” added the head of the Heureka Group.

The entire season will benefit from accelerated momentum

According to Tomáš Braverman, the outlook for the next quarters is already more optimistic. “Market development will of course depend on the situation in Ukraine. Online purchases accelerated at breakneck speed last year and a slight slowdown is therefore in order. However, due to the lockdown, the dynamics of the internet have sped up incredibly and this season will also benefit. A comparison with the non-lockdown period of 2Q2021 will be important,” added Braverman.

The average order value in the first quarter was higher than last year at CZK 1,390

On average, we spent CZK 1,390 per online order placed in the first quarter of this year. “This is CZK 150 or 12% more than in the first quarter of last year,” said Tomáš Braverman, who continued: “Last year’s decline in the average value was affected by the closure of brick-and-mortar stores. People had to shop online more often, and also for less expensive items for everyday use, which lowered the average value. I would say that order value has already reached the long-term average this quarter.” But the truth is that orders tend to be higher during the Christmas season, for example, as people spend more money buying Christmas gifts.

E‑shops maintain high quality, customer satisfaction is at 95.4 percent

What has retained high figures and standards is the quality of Czech e‑shops. It is high even after a stressful and challenging period. The level of satisfaction with e‑shops was the same in the first quarter of this year (95.4 percent). “This metric shows customer satisfaction with the services of Czech e‑shops. Czech online retailers have maintained their quality at a very high level for a long time,” said Tomáš Braverman.

Satisfaction dropped by a few tenths of a percentage point, below 95%, during the first wave of Covid, when e‑shops were not prepared for the shift of customers to the internet. Normally, this indicator decreases slightly with a large number of orders, as complications or misunderstandings are more frequent. “Compared to foreign countries, Czech e‑shops provide customers with really top-notch service and services. Services such as same day delivery, delivery to your floor or the option of choosing from a network of thousands of delivery points are not common in the neighbouring markets,” added Tomáš Braverman.