As a Digital Marketing Consultant, one of my missions is to help e-commerce expand in new markets. Of course as an Italian I’m usually hired by companies that want to enter the Italian market. But why should a UK firm look into the “Bel Paese” market?
Here is a list of 5 reasons why Italy can be a fantastic opportunity for e-commerce companies that want to expand overseas.
1) Italy is the fourth country in EU for users connected online
Italians are connected! Italy has more than 30 million active users (June 2010) and this data is the fourth largest in EU.
The top 7 countries in EU for number of active users online are:
- Germany 65.1 M
- UK 51.4
- France 44.6 M
- Italy 30 M
- Spain 29.1 M
- Poland 15.3 M
- Netherlands 14.9
This means the market is huge and is always growing at impressive rates.
2) Italy is the 7th biggest economy in the world
Even if all Europe was seriously hit by the economy turn-down things are getting better day after day and Italy is one of the countries that is reacting better to the crisis. It’s still not “gold time” and probably it will not be for a long time, but the market is mature for online businesses.
Italy is the 7th economy of the world and the 4th in the EU very close to the United Kingdom. The buying power is one of the strongest in Europe and very similar to the UK’s.
3) E-commerce turn over in Italy is growing rapidly
The e-commerce turn over in Italy is growing, even if it’s still far behind UK, Germany and France.
0,8% of retail sales in Italy came through e-commerce in 2009. If we compare this with the UK retail sales online we can understand the incredible opportunity of growth that the Italian market has in the next years. UK retail sales online in 2009 where 9,5 % of the total, against the 6,9 % of Germany and 4,9 % of France.
4) Banks in Italy are promoting prepaid credit cards for shopping online
One of the reasons why Italian are still not buying online as much as the British or the French is because they are scared of using their credit card. I have to remember that Italy has never had a great feeling with credit cards. Even now that we are in the digital era many Italians still don’t use credit cards – or ever had one!
The good news is that banks are stimulating online commerce through new top-up credit cards. It’s very easy to get a top-up credit card and it’s easy to use and with little risks for the user because they have little credit (just the one that you decide to top up). These cards are usually issued by Visa or MasterCard, so they are accepted from all online payment gateways.
5) Market is not as competitive as the UK’s
The number of online shops and websites in Italy are growing very rapidly but the market is still not so crowded. This means SEO is relatively easier and online advertising channels are a bit cheaper.
The 2009 online advertising expenditure in Italy was £ 756 million against the £1.75 billion of the UK.
Of course Italy is not the Eden of e-commerce, there are some threats and not only opportunities like in every market.
Some of them can be:
- Shipping cost (shipping overseas is not cheap)
- Understanding Italian’s needs
- Convincing Italian’s to trust your site is hard
- Payment methods (Many Italians are still very skeptical on paying online)
Said this, I believe that Italy is an opportunity… with its risks. But a not challenging game will never be a good game…
Data source: Internet World Stats and Casaleggio e Associati.