Expansion directions for cross-border e-commerce: Italy

While Italy might first come to mind for its delicious pizza and pasta or vacation photos from Rome or next to the Leaning Tower of Pisa, it is important to remember that it is one of the largest economies in the European Union. Italy, which we will focus on in today’s edition of our newsletter, is not only an attractive destination for tourists but also a country worth considering for entrepreneurs planning expansion in the cross-border e-commerce model. Last year, the value of online product sales in Italy exceeded 35 billion euros.

What product categories are most popular in Italian e-commerce? Which e-shops have recorded the highest revenues in recent years? Answers to these and many other questions can be found in the article below. Enjoy the read!

Market analysis

Italy’s highly developed and urbanized (71.66% in 2022) social market economy ranks third in the EU in terms of GDP. According to data published by Statista in 2023, the top three economies were:

• Germany – 4.12 trillion euros
• France – 2.8 trillion euros
• Italy – 2.09 trillion euros

In Eurostat’s per capita ranking, Italy, with a population of nearly 59 million, ranked 11th. This means that the average Italian generated 35.35 thousand euros last year.
At the same time, it’s worth noting that, according to World Bank data, the unemployment rate in Italy has been decreasing almost annually since 2014, when it peaked at 12.68%. After six years, it dropped to 9.16%. In 2021, there was a slight increase (9.5%), but the following year saw a drop to 8.09%. In comparison, the lowest unemployment rate since the beginning of this millennium occurred between 2004 and 2009, ranging from 6.08% to 7.87%. The World Bank also provides data on the percentage share of various sectors in employment in Italy (2022):

• Services – 69.34%
• Industry – 26.87%
• Agriculture – 3.79%

This distribution has remained stable over the years. For comparison, a decade earlier, the values were 68.72%, 27.58%, and 3.69%, respectively. To complete the picture, here is the percentage distribution of age groups in society: in 2022, 63.52% of Italians were of working age, 24.05% were over 65, and 12.43% were younger. These readings have been relatively stable since 2012, although, as in other European countries, Italy is experiencing an aging population.

Now, let’s look at the crucial statistics of import and export over the last few years. A positive trend in Italian cross-border sales, currently with a surplus of over 32 billion euros, is the increase in both values. Below are the export results presented by the World Trade Organization in billions of euros:

• 2022 – 657.04
• 2021 – 615.64
• 2020 – 499.79
• 2019 – 537.72
• 2018 – 549.53

And for imports:

• 2022 – 689.26
• 2021 – 567.42
• 2020 – 426.87
• 2019 – 475.01
• 2018 – 503.24

E-commerce characteristics

As in other European countries, the number of e-commerce users in Italy is steadily increasing. According to Statista, in 2020, 13.78 million people in Italy shopped online, and now it’s nearly 19.5 million, which represents one-third of the population. This number is expected to grow to 25.18 million by 2029. Along with this growth, the revenue from this market segment is also increasing. At the end of the last decade, it was 10 billion euros, growing steadily by a few billion annually until 2020. The following year saw a significant jump from 48.2 to 64.1 billion euros, with another 11 billion added, bringing the 2022 total to 75.9 billion euros.

What devices do Italians most often use to shop online? According to a report published by Statista in December 2022, the percentage distribution was as follows:

• Smartphone – 69%
• Desktop computer – 35%
• Laptop – 32%
• Tablet – 25%
• Smart TV – 9%

Following this trend, the most popular online payment methods, according to a multi-choice survey by the same institution, were:

• Online payment gateways like PayPal or Google Pay – 52%
• Credit cards – 45%
• Debit cards – 37%

Other methods included prepaid cards/vouchers (32%), direct debits (23%), and cash on delivery (20%).

As you can see, the Italian market confirms that mobile devices are the future of e-commerce. Therefore, it is becoming increasingly important to optimize e-shops for Responsive Web Design (RWD) to ensure a convenient shopping experience across devices.

Which companies in Italy most extensively use online sales channels? According to ISTAT (the Italian National Institute of Statistics), the leaders are editorial offices, with 84.5% utilizing e-commerce. The next spots are occupied by accommodation and food delivery companies (38.8%) and telecommunications (36.7%). Other sectors include:

• Food/beverage/tobacco production – 33.7%
• Courier services – 32.9%
• Audio/video production – 30.8%
• Retail – 29.4%
• Information services – 17.3%
• Manufacturing – 15.1%

Given these industries, it’s no surprise that Salesforce Research data shows that 65% of companies active in e-commerce invested in website development in 2022, 59% in social media, and 57% in marketplace platforms. Other areas of investment included digital sales materials (48%), telephone or email order systems (39%), and mobile apps (31%).

How did these investments translate into revenue in different channels? A year later, the percentage share was as follows:

• Websites – 40%
• Marketplaces – 28%
• Social media – 13%
• Mobile apps – 8%
• Others – 11%

Cross-border e-commerce

The value of cross-border online sales in Italy is growing in line with the overall e-commerce market in the country. Its percentage share of total B2C e-commerce turnover increased from 28.7% to 39.2% between 2019 and 2022. The exact values during this period are as follows:

• 2019: €4.4 billion
• 2020: €5.7 billion
• 2021: €9.5 billion
• 2022: €10.7 billion

We will also look at the foreign markets where Italian companies most often sell, as well as the regions from which Italians most frequently order products. According to data presented by Casaleggio Associati in March 2023, companies from the Eternal City mostly chose to start e-commerce in Germany (34%) and France (31%). Nearly one-third of Italy’s e-exports went to the Spanish market (28%), and just over one-fifth (21%) to the UK. Switzerland (16%), the USA (15%), and the combined Scandinavian countries (13%) also exceeded 10%. On the other hand, which countries do Italians order the most products from? A staggering 38% of packages came from China, followed by Germany (18%) and the UK (12%).

Largest online stores

It will likely surprise no one that the winner in both the ranking of the largest sales platforms and overall e-stores in Italy is Amazon.it. Of course, the market hosts a vast number of players, mainly vertical (i.e., specializing in specific product ranges). Examples from the fashion industry include vinted.it and zalando.it, which hold top positions with a share of 9.5% and 7.67% of the traffic generated by this e-commerce sector. In the electronics category, the undisputed leader is the Apple Store, visited over 6.7 million times per month (notably, the second place goes to Mediaworld, but its figure of around 4 million only emphasizes Apple’s dominance). In the beauty sector, the biggest players are Notino and Sephora, with results of 1.39 and 0.83 million, respectively. Considering the achievements of these companies, one might wonder if they pose a threat to the position of the global e-commerce giant in Italy, but hard data consistently provides a clear answer. Here are the sales figures for the largest e-stores:

• Amazon: $5.9 billion,
• Shein: $1.23 billion,
• Apple: $719 million,
• Unieuro: $587 million,
• Mediaworld: $585 million,
• IKEA: $391.8 million.

We already know that the vast majority of e-commerce takes place on platforms, so what is their percentage share of online traffic? Amazon.it accounts for just over 42%, while the second place eBay holds only around 10.2%.

The next three spots go to (8.77%), temu.com (3,91%) and aliexpress.com (3,88%). For an even more precise representation of these values, let’s look at the number of unique users of the largest marketplaces in the first quarter of the year from 2019 to 2023:

Amazon:

• Amazon: $5.9 billion
• Shein: $1.23 billion
• Apple: $719 million
• Unieuro: $587 million
• Mediaworld: $585 million
• IKEA: $391.8 million

eBay:

• Q1 2023: 18.1 million
• Q1 2022: 17 million
• Q1 2021: 17.8 million
• Q1 2020: 19 million

Subito:

• Q1 2023: 12 million
• Q1 2022: 11.7 million
• Q1 2021: 11.1 million
• Q1 2020: 9.2 million

For comparison, during the same period, Shein recorded 10.4 million, and ETSY only 5.7 million.

The statistics for the most downloaded shopping apps look quite different—this is the only ranking where Amazon does not occupy the first place, which in this case went to Temu with nearly 12 million installations. The second position went to the leading platform’s app (3.46 million), and the third to Wallapop (2.37 million).

Now let’s focus on Amazon from the consumer’s perspective. What are the main reasons they choose to shop on this platform? According to Statista, the most important reason is the wide catalog of products (7.3 out of 10), followed by trust in products (shopping safety) – 6.2 points. Let’s also look at the frequency of transactions – according to data presented by Remazing in 2022, as many as 19% of users placed at least one order per week, and another 34% reported shopping several times a month (but below one transaction each week). 26% of consumers described their frequency as “once a month,” and another 16% – “once every few months.” The smallest group (3%) orders products once a year or less.

Finally, let’s look at marketplaces from the perspective of sellers. According to Casaleggio Associati, 34% of companies choose to sell on Amazon, while 18% choose eBay. The third spot went to ManoMano (7%), followed closely by Facebook (6%). Due to the low share of other sites, I won’t list them all, but I will leave a link to the full ranking. Simultaneously, as many as 36% of businesses operate exclusively on one platform. The largest group (41%) trades on two or three marketplaces. Only 12% of entrepreneurs run their business on four or five platforms, and an identical group declared sales on a larger number of platforms.

Is it worth considering e-export to Italy?

Yes – it is the third-largest economy in the European Union with high purchasing power. As early as 2022, cross-border e-commerce accounted for nearly 40% of e-commerce in the country, and almost one-third of Italians shop online. Additionally, the undisputed leader in online sales is Amazon, which has an extensive logistics network in Italy through Fulfilment by Amazon, making expansion much easier and securing sales with regard to the two most frequently cited reasons by Italians for shopping on platforms. Nevertheless, as Damian Wiszowaty, CEO of Gonito, recently stated, the method of trial and error – entering foreign marketplaces in a test mode – is not a recommended approach by experts. Therefore, when planning to enter a new market, remember that the decision should be based on a thoroughly conducted analysis of the potential of the specific product category.