Within the current context, Romanian e-Commerce does pretty well. According to the GPeC blog, the internet penetration rate at the end of 2015 had increased by 56% over 2014. There are 11 million internet users aged between 16 and 55. Moreover, StartUpCafe states that in the same time frame, Romanian eCommerce increased by 24%.
European-wise, it’s the 4th growth. We’ll expand on this further down, so keep on reading to see how local and continental trends link. Especially if you want to break into the Romanian market.
A couple of our strengths are IT processes and development platforms. Regarding logistics and user behavior, though, I’d dare say that we’re somewhat behind international trends. But catching up, nonetheless. Hence, the necessity to write an article FOR online shop owners that actually serves CONSUMERS.
According to the Romanian Online Shops Association, there are approximately 10000 registered stores. But only a bit over 2000 out of them are active, generating traffic and orders.
Here are the 10 trends that shape Romanian eCommerce.
Romanian e-Commerce is Practiced at Global Standards
In a recent Cart Abandonment article, we showed why we’d lose prospective customers. Worldwide customers have the following demands:
- FREE shipment and returns
- 100% money back, no questions asked guarantee
- Fast delivery. Yesterday, if possible.
Do they sound familiar? Put your customer’s shoes on and tell us now. Exactly! International requests, domestic requests – no difference. Only, this as far as we go with similarities.
What does this tell us? As customers will maintain their standards, marketers and developers will work to comply. It’s as simple as that.
Do We Practice m-Commerce? Yes/No/Maybe?
Mobile! Mobile! Mobile! Each time I open Chrome, at least half the articles I read approach this topic! It’s redundant. There’s always someone around me hunting Pokemons, uploading selfies on Instagram or laughing at Facebook gossip.
Factor in the following points:
- Google sanctions unresponsive design and
- According to GPeC, mobile usage has known a dramatic growth in both 2015 and 2016.
Following the global trend, there are still quite a few “unresponsive websites”. Worried about the negative impact on SEO, though, more shop owners resort to development companies.
But we still choose desktop screens over mobiles. More than half the traffic generated by the biggest Romanian shops comes from mobiles. Another interesting statistic says that we research from more SIM cards than we register. Which makes sense if we think of the rhythm Romanians buy SIM cards.
The only mention is that we don’t complete transactions. We use 1.4 million phones to complete orders. More than that, we have 10 million smartphones we use for both research and buying.
Gender wise, women buy a bit more on their mobiles. Men buy 77% on desktop and 23% on mobiles. For women, the ratio is 70% – 30%. (Information Source: Ecompedia)
Mobile bridges online with brick-and-mortar. For people between 25 and 34, it’s crucial that they interacted with your store from their phones. For the times they’re not willing to come to your physical store, they expect an intuitive, easy, rapid experience online. This means mobile-responsive.
e-Commerce, m-Commerce & Social Commerce in the Romanian e-Commerce
According to Ecompedia, people between the ages of 25 and 34 generate the greatest part of e-Commerce. The 35 – 44 segment is somewhere in the middle. Since they’re the ones habitually visiting your brick-and-mortar, eShopping for them is not critical. The 18 – 24 age group registers the lowest number of online transactions.
On the other side, Romanians use the internet for socializing, NOT buying. Two of the determinants for this are the lack of systems’ optimization and automation (long and fractionated buying process) and our reluctance to modern payment tools.
All in all, if you’re an eShop owner, direct social commerce might be a development opportunity to pay attention to on the Romanian market.
Automated and Optimized Systems Foster Romanian e-Commerce Growth
In Romania’s total trading, eCommerce counts for only 5%. Considering other regions have registered up to 4 times this rate, it’s safe to say that there’s a lot of development potential here. The eMarketer Report shows that, in 2015, the global online sales reached 7.4%.
So, it’s up to eShop owners to set up systems and possibilities to ease consumers’ efforts. I’m specifically talking about buying process automation and logistics, here.
Growing sales without automation is difficult and redundant. For example, not offering the possibility of online payment, or the possibility of using credit, debit cards or other options, or without building automated email cart abandonment recovery campaigns. We’re speeding through this century and, to be relevant, we need to keep up.
Delivery services are another low point of Romanian eCommerce. The multiple consumers’ complaints – related to late, fractionated orders and incomplete deliveries – give us a lot of improvement ground. On the positive side, delivery agents’ flexibility needs to be noted.
I think our challenge of resides in both labor force quality and R&R systems in this sector. But this is another topic.
In conclusion, we can focus on the buying process automation and the delivery services to differentiate, create competitive advantage and increase market share.
Play Your Cards Right – (Credit Cards, that is…)
What concerns me most in current eCommerce trends is our reluctance in using card payment and our financial security stigma.
We have two main challenges here:
- Trust in modern financial tools – reaching low levels both for consumers and shop owners
- Consumer preferences for debit or, lately, credit cards
Online financial security in Romania
We don’t trust our online payment system. This is not new, I know. And it’s because:
- We’re not well informed
- We’re not interested in being informed
- The eShop is not credible (unprofessional design, lack of terms & conditions, unclear descriptions, lack of product pictures, and so on)
Consumer transactions, though, are best protected. For example, let’s take a look at the 3D Secure System. According to Wikipedia, this Visa and Mastercard initiative asks for a supplementary password for each online payment. GoMag (a.k.a. SilkWeb) states that, in Romania, there are 1374 stores and 14.5 million cards registered into 3D Secure. Only, from the latter category, only 1.32 million cards are, actually, active.
Beyond these reservations, though, numbers increase yearly. In 2015, pursuant to GPeC, they looked like this:
Now, what’s truly surprising, is that online businessmen are as suspicious. StartUpCafe mentions that we use cards to pay for only 15-20% of goods and almost 100% services. We can explain this by reasoning that entrepreneurs are, in turn, consumers. When paying by card, you manage and track stats and reports easier, you reduce transaction time and you lower commission fees.
Do we pay with our debit or credit card?
There’s a new dilemma in town: do we pay by debit or credit card? As, expected, we mostly use credit cards in November, on Black Friday shopping. The same GPeC study from above states that in 2015 alone, Romanians have spent almost 100 million euros, that Friday. We sequence most payments in 12 months, due to banks offering this kind of payment plan interest-free. Thus, we differentiate between paying a larger amount on the spot or smaller portions, on the longer term.
Though global consumers are strong in their demand for tools diversity, Romanians are far from that. Nonetheless, there are a few stores accepting bitcoin or mobile payments.
Due to dealing with the banks and not customers, directly, stores confide in credit cards easier. The bank deposits the entire amount and later on collects the monthly payments from the customer. Practically, the banks do all the hard work and we’re the ones being impressed by it. 🙂
Internet Banking Supports Romanian e-Commerce
Since we’re still on the financial topic, it’s quite remarkable how banks have been endorsing dedicated internet banking solutions for entrepreneurs. Banks such as ING or Transilvania have encouraged – through speed, reducing transaction fees, discounts and others – the usage of online apps for different payments.
Banking for an individual is more mobile oriented. Take the ING Mobile App, for example. ING Bazar is a cash-back module offering customers different shopping value percentages back when buying from enrolled partners. For some of them the only condition for them to receive the discount is if they purchase online. There had been stores which have doubled their online sales volume from programs like this. Also, according to Wall-Street.ro, last May, an ING client managed to get 800 LEI from cash-back during the first 3 months from service launch.
We make the distinction between internet and mobile banking in terms of payments an entrepreneur needs to recurrently perform – respectively towards suppliers and employees on top of the usual utilities. Another idea to factor in is whether transactions are local or international.
We Need Qualitative Content to Enhance the Romanian e-Commerce
We sense the costs of building an eShop in Romania a little bit higher compared to other regions. This way, competition is relatively reduced. Still, we gain competitive advantage thanks to the content we produce. I’m talking about product descriptions, reviews and testimonials and other informative materials, as well.
Because there’s a whole lot of content out there – I read at some point that we produce 70% more content with each passing year – not necessarily qualitative content, content marketing has become one of the most popular trends, nowadays. For example, Google Panda (the Google spamming penalties) that support this, have recently been introduced in the general ranking algorithm.
This can also help gain competitive advantage, because, as long as your buyers find every piece of information they need on your site, why search anywhere else?
Toys & Baby Items – Trending Niches in the Romanian e-Commerce
With this opportunity we tap into products and what differences a niche approach does to e-Commerce.
Globally, regardless of the niche, we’d consider, there’s a lot more competition out there than domestically. Thus, we’re going through a time when we need to separate and exploit as many sectors as possible. If only Romanians would whine about what they don’t like. (Yes, I’m being sarcastic)
For e-Commerce, Romanians prefer the following categories in the following order: IT (PCs, mobiles, other electronic devices), fashion and beauty (clothes, shoes, accessories, cosmetics, etc.), home decor (this sector registered a 50% increase over last year) and baby items.
At first, I thought it was an age thing. Or a biological clock thing, for that matter. It wasn’t just a thought. Time has come for my generation to give birth. We mentioned earlier how the 25 – 34 age group generates most of eCommerce. Statistically speaking, it’s that time in our lives when we focus on growing families and kids and rainbows and toys.
For the past few years, the baby items and toys sector witnessed a constant growth. As long as 25 – 34 age group will keep on generating the widest traffic, this trend will keep on ascending.
Music is a Virgin Romanian e-Commerce Sector
When comparing ourselves to the rest of the European market, we can easily observe the differences in the entertainment industry.
Again, Romania has registered the 4th European increase in e-Commerce, respectively a 24% rate in 2015 over 2014. First 3 countries were: Ukraine (35% increase), Turkey (34.9% increase) and Belgium (34.2% increase).
Goods categories wise, European’s preferences rank as it follows: tickets and traveling (77%), music (65%), hotel accommodation (65%), laptops and tablets (36%), mobiles (34%), clothes and shoes (33%).
Romanians, on the other side, have a slightly different perspective. We spend on traveling packages (54.67%), IT&C items (34.45%), decor (12.03%) and baby items (11.48%). Percentages are scaled to our 2015 average wage.
Ok. Lots of numbers, a few colors, but here’s the actual outcome:
- Europeans look towards vacations and how to spend their free time. Romanians, though look for traveling packs that’ll save them money and time, reducing search effort. The solutions we find mean more to us. Data highlights economic differences – the more developed the region, the more will it invest in services.
- The European entertainment market, respectively music, is a valuable opportunity at least as an open market for Romanian artists.
Romanian e-Commerce is about Consumer’s Perception
Till now, we’ve analyzed e-Commerce placement (mediums – desktop vs. mobile, social networks), e-Commerce financial tools and products. Regarding promotion and to whom we address it, let’s see who our customer is in terms of gender.
Consumer wise, buying frequency and volume are driven by perception. Not long ago we’ve debated this in our office. My co-workers suggested this and that’s how we ended up paying more attention to this.
The best example I found was with watches. Men see them as long term investments, so they’re comfortable investing a lot of money in one from time to time. Women, on the other side, wear watches as accessories. Thus, they spend less money, but more often on getting more items. Women tend to spend 5 times less than men, but with 3 times their frequency.
Generally, we’re well aware of men’s tendency to buy utility and women’s impulse to buy aesthetics. The roots of this behavior spring from the prehistoric era. Men were concerned with hunting and survival back then. Women were in charge of domestic care a.k.a. cave care. The main idea is the same. Times and contexts differ a bit.
According to Ecompedia, though we seem to not make these differences online. In 2015, women have bought online 4 times more gadgets and twice more mobiles than in 2014. So, the difference in comparison to men’s shopping favors men by only 3%.
How does this help us? It helps with offering personalized and customized experiences to our users.
Web personalization ensures customer loyalty and indicates how to adapt our promotional strategy for each of them. Even more, it consolidates your business’s voice and identity and points us to the kind of content our visitors want to consume.
Going through all components of the Marketing Mix and approaching this topic both from eShop owners and consumers, it’s safe to conclude that our fundamental needs, as entrepreneurs are as follows:
- Visibility – reaching our customers as fast as possible, on all possible devices and all networks.
- Authority – that means market share. The Romanian online market is somewhat young, which is an encouraging thing due to its growth potential.
It comes with competitive advantage opportunities either by niche laser focus (such as baby items or music) or differentiating at technological level (through making use of modern and diverse payment tools) - Impact – respectively marketing and qualitative content. Both online and offline. And for this, knowing our audience with all of its characteristics (age groups, gender preferences, etc.) and all its perceptions about us, our brands and our offerings is critical.
On top of that, because global markets are ahead of us, it’s easy for us to know our next steps. This is what we’re aiming for, isn’t it? Expanding beyond borders. So, it’s only natural that we kept up with the continental and global market trends.
