French e-commerce to hit €90bn

9 April 2014
PARIS: The French e-commerce market is forecast to reach €90 billion in 2020 with traditional retailers playing a major role, according to a new report.

E-commerce in France to 2020, from analysts Xerfi-Precepta, said that online sales were expected to grow by almost 60% between 2014 and 2020, when they will account for some 6.5% of total household consumption.

But the rate of growth is slowing: from 14% in 2013, it is projected to fall to 11% in 2014 and 10% in 2015, before dipping into single figures in subsequent years.

A number of reasons were put forward for this development, including a decline in average basket size, an increase in the number of individual transactions and the likelihood of the total universe of online shoppers reaching its limit.

Physical stores still account for over 90% of retail trade, however. Xerfi-Precepta also noted that traditional distributors took 35% of the total sales of the top 30 e-commerce players and said their influence would only grow, boosted by acquisitions such as that of online pure player Mistergooddeal by electrical retailer Darty.

Pure ecommerce players had struggled to achieve profitability, said Xerfi-Precepta and suggested that many were changing their business model to a B2B one and were becoming service providers for other e-tailers.

The report expected that stores would increasingly be made the hub of the buying process, with online-to-offline activations and the digitisation of bricks-and-mortar outlets.

Xerfi-Precepta further considered that the e-commerce potential for local shops, numbering 600,000 in 36,600 French communes, was "huge". It foresaw unions of local artisans and merchants creating online trading platforms to offer home delivery or collection from stores or lockers.

It admitted, however, that they could just as easily be overtaken by the major ecommerce players.

Those markets that had pioneered online retail – books, CDs and home appliances – were expected to be rather less buoyant in future, with widespread restructuring likely as businesses merged or closed.

But for relative newcomers to ecommerce, such as medical goods, jewellery, DIY/gardening, sporting goods and food, the outlook was more optimistic.

Data sourced from Journal du Net; additional content by Warc staff
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