Ecommerce in Italy B2C - Status mid year 2006

Ecommerce in Italy B2c (IT, PC, Consumer Electronics) - Status mid year 2006 online sales - IT and consumer electronics online sales B2c, which in 2005 accounted for approximately 310 millions €, would close in 2006 with a growth of 40% a little more of 430 Millions Euro, being in Italy at the second position (in online sales revenue) after the Tourism, that is the leading component of the eCommerce B2C in Italy: almost 11% of the whole market is represented by B2c IT and CE.

The penetration rate, compared to the total retail sales, is equivalent to 3% and offers considerable opportunity of growth especially if comparing with international levels. In 2006 almost 2,5 million of online orders will be executed by ecommerce websites for IT and CE products. The average “cash slip” (average sales value per order) will be slightly higher of 180€, a drop of 15% compared to 2005 also due to the rise of the “E-bay computer shops”, which average sales is much lower to other online sales companies and due to the rise, in sales, of consumables and accessories.

In 2006 the major part of the market stays concentrated on the hands of the “dot com pure players” companies, running the business according to the “virtual reseller” model and of the few operators of the major retail distribution who invested in online channel.

During 2005 “Monclick” entered the market as the first operator “pure player” but not “dot com”, having the support of the leader of IT and CE distribution in Italy (the distributor Esprinet who owns Monclick at 100%).

In the “virtual resellers” category, the dominant companies, have an aggreagetd market share that is the lowest between all principal sectors of the online sales in general (when considering the market share of the major players). The online sales business is NOT concentred yet. For the major virtual resellers, is more and more difficult to keep a sufficient margin. Only the few initiatives with a dominant market position, e.g. MrPrice and ePrice are able to reach a volume which allows them to have, even if low, a contractual power in front of the suppliers (vendors and distributors).

There are at least three the development directions on facing this phenomenon:

• don’t rely completely on a pure reseller virtual model but try, as much as possible to operate following a mixed logic, accepting to not purchase only after the order has been taken from the final customer, but taking purchasing opportunities with interesting margin;
• extending the range to the product categories not strictly linked to IT, PC and consumer electronic, e.g. the sport and spare time products, bricolage, health, beauty, jewellery, which could grant margin profit definitely higher;
• more focus on “margins generators” cross & up selling (like foreign companies - e.g Pixmania - which are more advanced in this area does.

Major retail organization, even if they can count on better deals and margins, are still struggling to get success in the online sales with the exception of MediaWolrd (Mediamarket) that is already well established.

Until now the competition in online sales has been mainly on price. As consequence the role of “comparators” website (Kelkoo, Trovaprezzi, Costameno, etc.) has been critical to get orders but also further compressing the margins. The competition and success in the coming years will be driven instead by the overall service provided to the customers. And a lot of effort is being placed in this direction by the major players.

Italy ecommerce major players: click here to read the document “ecommerce_Italy.pdf (1 page in english - pdf, 7 KB)”

For more information on Italian and European markets write an email to TrendEurope (European IT Sales and Marketing Agency) info@trendeurope.com and see www.trendeurope.com

Source: Osservatorio B2c Politecnico di Milano Click here to download the full doc (51 pages in Italian - pdf, 2 MB)