E-commerce in Europe and Ukraine: bottlenecks and growth points
10 April 2025 09:42
In the period between 2024 and 2028, global revenues from e-commerce will grow by 27%, while growth in Europe will be the lowest among the main regions. This is reported by the Ukrainian Council of Shopping Centers with reference to data from the analytical portal ECDB, informs "Komersant Ukrainian".
Compared to the major markets of Asia and America, which make up two-thirds of the global e-commerce market, with a projected revenue growth of 43% (from 2648 billion to 3778 billion dollars) until 2028, respectively, the growth rate in Europe does not seem so unpredictable. Especially considering that it is the third largest e-commerce market in the world.
However, the forecast sees a gap between Europe and the rest of the world, with Africa as well as Australia and Oceania expected to achieve revenue growth of 53% and 37% over the next four years, although these two markets are much smaller compared to Europe.
What are the characteristics of the European e-commerce market
In Europe, e-commerce growth is driven by high penetration rates in leading economies such as the UK, Germany and the Netherlands, where rates are already above 80%.
In addition, smaller but rapidly growing markets in Southern and Eastern Europe such as Greece, Portugal and Poland present significant opportunities for future growth.
The level of market concentration differs significantly between European countries.
The distribution of net sales in the largest European e-commerce countries shows a significant difference between the top 250 top and bottom ranked stores.
In the UK, Spain and Italy markets, at least 40% of all net sales are concentrated between the top 5 retailers.
Among retailers, the market leader in the e-commerce sector in Europe is Amazon. In Germany alone, Amazon generated $15.8 billion in revenue in 2023.
Fashion is the most profitable e-commerce category
Generating $149 billion in revenue last year, the fashion industry was slightly ahead of the growth of the electronics and leisure sectors, which reached $145 billion in revenue.
The top-selling fashion items were apparel, accounting for 59% of revenues, footwear at 23%, and bags and accessories at 18%.
While a rebound in consumer confidence contributed to last year’s growth, the surge in thrift shopping has pushed platforms like Temu to capture more market share.
Thanks to competitive pricing strategies, such platforms are particularly popular among frugal consumers, offering goods at significantly lower prices than traditional European retailers, which in turn has caused concern among local e-commerce players.
What about the development of e-commerce in Ukraine
About 11 million online shoppers who make an average of 17 online purchases per year for the amount of UAH 1,300 – such figures characterize the e-commerce market in Ukraine. This is stated in a study from Promodo agency.
In total, during 2024, Ukrainians bought online goods and services for a total of 239 billion hryvnia. The figure is 25% more than in 2023.
How preferences and expenses of buyers are transformed
According to Promodo analysts, in the second half of 2024, revenue in the electronics category increased by 18% in UAH and 8% in USD. Due to blackouts and abnormal heat at the beginning of the half-year, there was an increased demand for climate control equipment, portable charging stations, which influenced the growth of the segment.
Revenue in the Food & Alcohol category grew by 53% in UAH and 41% in USD over the same period. This was driven by a significant year-on-year increase in traffic due to investments in advertising, as well as one of the highest inflation rates in the market. While in 2023 the category dynamics were influenced by alcohol revenue, now it is influenced by food products.
Revenues of the Pharmacy Products niche grew in e-commerce in hryvnias by 12% and in dollars by 3%. The reason for the moderate performance was a significant increase in the price of medicines.
In addition, the revenue in the “Auto Goods” niche for the second half of 2024 grew by 9% in hryvnias, while in dollars remained unchanged. The number of purchases sagged by 10%.
In the “Clothing and Footwear” category, revenue during the second half of 2024 decreased by 4% in hryvnias and by 11% in dollars. The worst season in terms of profitability was summer, analysts note. Seasonality in the niche, compared to 2023, shifted by almost a month. Ukrainians tend to buy clothes online, but for a smaller average check than offline. Players from the economy segment have increased their market share.
Main trends of Ukrainian e-commerce in 2025
The Shop-Express team at the PaySpace Magazine online portal has identified 10 trends of the year. Let’s recall a few of them.
– Direct sales through own online stores will contribute to building direct contact with customers, especially in the B2B segment. A significant advantage in 2025 will be the ability to set individual prices for different types of customers in an online store.
– One of the main criteria for customers to choose an online store is fast and free/low-cost delivery of goods. In addition, buyers favor those sellers who provide a convenient returns process. Businesses that implement these options gain a competitive advantage and customer loyalty.
– In modern e-commerce, customer retention is becoming a priority for businesses. In 2025, the focus is shifting to creating long-term customer relationships, and repeat sales are becoming a major driver of profitability.
– Artificial intelligence is changing the way we approach customer interactions, allowing companies to create a unique experience for each customer. Thanks to data analytics in 2025, developments in artificial intelligence will enable an even greater depth of personalization.
– In 2025, the trend of building a unique brand will gain momentum as it becomes vital to stand out in an increasingly competitive marketplace.
