European webshops losing ground to Chinese and US competitors

The value of sales of the 500 most popular European online stores dropped by 18 per cent to 50 billion euros last year. The decline is the result of an unstable macro-economic environment, logistical challenges and fierce competition from US and especially Chinese brands, according to the annual report by Cross-Border Commerce Europe, a platform promoting e-commerce in Europe.

European e-commerce companies are losing ground as Chinese retailers storm the market, the report shows, with European companies unable to match the scale and agility of emerging giants such as Shein and Temu.

In the fight against aggressive pricing and overwhelming supply, the platform advises European companies to prioritise quality, reliable delivery times, social commitment and local services.

The growth of the fashion webshop Shein is affecting H&M and Inditex, the parent company of Zara, though the high street stores remain strong. The impact of "social commerce", with shops on TikTok and Instagram, is also significant.

"It is necessary for European sellers to embrace social commerce to remain competitive"

Cross-Border Commerce Europe calls the phenomenon “the most significant market disruption since the advent of the internet”. “It is necessary for European sellers to embrace social commerce to remain competitive,” it says.

European online shops achieved 107 billion euros in cross-border turnover in 2023, while direct online sales (B2C) in Europe rose 13 per cent to 741 billion. Furniture chain Ikea continues to lead the top 500, followed by Zalando, H&M, Lego and Zara.

Cross-border sales in the UK fell to an all-time low of 27.5 billion euros last year. The UK is struggling with Brexit-related VAT rules, import duties and logistical complexities. Germany has overtaken the UK as the largest cross-border market in Europe, achieving 43 billion euros last year.

^{© PHOTO STEFANI REYNOLDS / AFP}