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How to find e-commerce success in France

Why enter the French market?If you’re looking to reach a big consumer audience, in a retail market with similar trends and rules to other European markets, and where e-commerce continues to grow from strength to strength, France should be high on your list of prospects for sales success.

Large e-commerce marketFrance is the third-largest e-commerce market in Europe, and the sixth-largest in the world, according to Ecommerce Foundation, providing both scope and scale for retailers looking to expand.

Andgrowing...French e-commerce continues to grow – up another 14.6 per cent in 2016 – despite a sluggish economy.

ComparablelegislationLegislation is comparable to most EU countries, making France reassuringly familiar for many companies.

EuropeanneighboursFrance already has many long-term business relationships with its European neighbours.

HealthycompetitionThe increasing popularity of online marketplaces is breaking the hold of the dominant French retailers and opening up the country to more competition, which in turn is widening the opportunities for international companies.

PaymentinfrastructureOnline payment in France is well-established, with 85 per cent choosing to use bank cards.

French-speakingmarketsTargeting France opens the door to an extra 5 million consumers in neighbouring French-speaking markets, such as Belgium and Switzerland, where e-commerce is also growing.

AspirationalcustomersImportantly, the French admire – and want to own – other European products.

High purchasingpowerFrance is the second-largest consumer market in mainland Europe – with more than 25 million households. Close to 67 million people, with a high purchasing power overall, are looking to buy everything from clothes to electronics and other household goods.

72

62.9

55.0

49.5

43.6

55.8

60.8

Overview of French market As one of the “big three” players in European e-commerce alongside the UK and Germany, France represents a €72bn opportunity – and despite sluggish performance in the economy at large, the potential for online shopping just keeps on growing.

In fact, the size of the e-commerce market in 2016 was up 14.6 per cent compared to the previous year, according to FEVAD, the French e-commerce and distance selling federation – defying predictions that growth in the now mature market would slow to 10 per cent. That growth is being fuelled by the rise in the number of retailers offering goods online – which has doubled over the past five years to more than 200,000; the rapid expansion of online marketplaces; and the increasing number of consumers making purchases via mobile devices. Looking at the basics also shows how attractive France can be for European e-commerce companies looking to expand. It’s a large consumer market of close to 67 million people. It has an internet penetration of 87 per cent. And 80 per cent of 25-54 year olds made a purchase online over the past 12 months.

CA e-commerce (millions of euros)Source: Fevad iCE iCM

2010

2011

2012

2013

2014

2015

2016

36.5

30.030.0

36.1

42.6

47.2

50.6

0.4/1%

1/2%

2.2/5%

4.5/8%

7/11%

11.2/16%

Mobile

Computer

The pace of e-commerce growth in France is significant

Together with the UK and Germany, France dominates e-commerce in Europe

According to the Centre for Retail Research, e-commerce in France now accounts for 10 per cent of retail sales – and a higher proportion of GDP than it does in Europe’s second largest e-commerce market, Germany.And perhaps most importantly, French consumers are willing to look to retailers in other countries to find the right product at the right price: according to Eurostat, 27 per cent of French purchases in 2016 were cross-border, made by as many as 41 per cent of online shoppers.

E-commerce sales per region (billions of euros)Source: Ecommerce Foundation, 2017

France82

Sweden14

Norway11

Denmark16

Netherlands24

Belgium10

Turkey11

Spain28

Italy22

Russia28

Germany86

United Kingdom197

« French consumers are willing to look to retailers in other countries to find the right product at the right price »

Retail trends The retail landscape in France shares many of the same characteristics of other European markets, with increasing consumer demands and price competition, as well as the move to multi-channel retailing. But it also has some more unique qualities: most notably the strength of its hypermarkets and department stores.

The traditional strength of mail order catalogues has provided a good basis for the move to e-commerce, but many domestic high-street retailers have been slow to follow this trend. Department store chain Printemps, for example, only moved into e-commerce in 2013 through its acquisition of placedestendances.com; its main site remains non-transactional.Yet the online marketplace is both crowded and competitive. The latest report from FEVAD puts the number of online retailers in France at more than 200,000 – a figure that has doubled since 2011. Clothing and footwear is the dominant product sector and unfortunately spend has weakened across this category recently (down 0.5 per cent in 2015, according to Euromonitor) – but affordable, international fashion brands targeting younger demographics have been among the strongest performers. These include H&M, Inditex and Primark – and, in fact, Primark declared France its “most successful market entry to date” at the end of 2015. Euromonitor is also predicting a return to growth in this sector over the next four years.

The number of online retailers has doubled in five years

Amazon is the top e-commerce performer, but otherwise French brands dominate

Number of sites active merchants (in millions) Source: Fevad iCE

2010 2011 2012 2013 2014 2015 2016

82100

117138

157182

204

Furniture is a surprisingly successful category for online retailers in France, led by Conforama and Ikea but 12 per cent of sales in this sector came from online in 2015, compared to the 6 or 7 per cent achieved elsewhere in Europe. This contributed to the growth in the home and garden sector overall, up 25 per cent in 2015, while online grocery shopping is the other big climber, up 23 per cent.As a result of competition, customer experience is increasingly coming under the spotlight. It needs to be: Forrester Research has gone as far as labelling customer service in France “dismal” – and getting worse – in its latest Customer Service Index. Global retailers can use this to their advantage.

Amazon, for example, was the most acclaimed brand in Forrester’s report, largely based on its wide offer, speedy delivery and its reputation for reliable customer service. Zalando, Alibaba, eBay and Asos have also found favour with French consumers.Nevertheless, retailers should not underestimate the strength of the French online retailers, including pure plays such as Cdiscount (Group Casino), marketplace PriceMinister (part of Rakuten) and Rue du Commerce (acquired by Carrefour in 2016) – as they continue to give Amazon.fr a run for its money.

« Retailers should not underestimate the strength of the French online retailers including pure plays such as Cdiscount, marketplacePrice-Minister and Rue du Commerce »

Top 10 e-commerce sites and applications in France based on visits globally, Q1 2017

Source: Fevad/Médiamétrie

123456789

10

Brands Unique visitors (monthly average)

Amazon 23 499 000Cdiscount 16 659 000Fnac 13 267 000Voyages-Sncf.com 12 124 000vente-privee 11 867 000eBay 11 576 000Groupon 11 179 000Carrefour 10 257 000Booking.com 9 344 000E.Leclerc 9 127 000

Rank

Penetration of e-shoppers within internet usersSource: Médiamétrie – Observatoire des Usages Internet Q1 2017 - All connections

Men

Women

16-24 years

25-34 years

35-49 years

50-64 years

65 years plus

Socio-professional level and above

Below socio-professional level

Retirees

Paris region

Outside capital

84.0%

81.4%

85.9%

94.6%

91.1%

82.0%

74.8%

91.4%

89.2%

75.0%

82.0%

82.9%

Average82.7%

Consumer trends Price is key for many French consumers, especially since the global economic downturn. According to Euromonitor, 80 per cent of French consumers compare prices before purchasing non-grocery items.

It’s no wonder then that online shopping – which offers the opportunity to shop around for the cheapest price – is growing so strongly. It’s increasingly common among nearly 83 per cent of internet users – with little difference between the habits of men and women. That rises to more than 90 per cent among those aged 25-49.Attention to price has also fuelled the growth of flash sales – France’s vente-privee.com is the world’s biggest flash sale site; while shopping around has undoubtedly helped to create the audience for online marketplaces, which have been used by 60 per cent of online shoppers.

The proportion of online shoppers among internet users is high across the board, regardless of age or gender

Greater frequency of purchases is driving continued growth

Frequency of internet purchasesSource: Barométre Fevad/CSA - January 2017, % of e-shoppers.

At least once

a week

2 to 3 times a week

Once a month

Less than once a month

7%

24%

27%

42%

Clothes top the list of products online shoppers buy, but there’s a wide range

Payment: Consumers in France like using bank cards to pay online, keeping payment relatively simple for international retailers to crack. Some 94 per cent of those aged over 15 have a Carte Bancaire – and 85 per cent of shoppers use them as their preferred method of payment online. There are also about 8 million PayPal accounts in France.

The dominance of bank cards is useful for foreign retailers

Cross-border purchases: The French are becoming more comfortable with the idea of buying online from other countries – with this most often driven by price, better conditions and availability. According to International Post Corporation (IPC) research, China, Germany and the UK are the most popular destinations. But take note of a warning from Ecommerce Foundation: a website in a foreign language or badly translated into French has little chance of succeeding.Cheaper goods from China appeal to

the cost-conscious French consumer

Overview of popular product groupsMost popular product groups, in millions of euros, 2016

Source: Eurostat, 2016

Clothing

Books

Home electronics

Cosmetics, Skincare & Haircare

CD’s

Children Articles

Films & DVD

Sport & Recreation

Toys

Car Accessories

Food

Home & Furniture

16.2

12.4

11.2

8.9

7.4

6.2

5.8

5.4

5.4

4.6

4.3

3.9

Online payment methodsPenetration of payment methods among online buyers, 2016

Source: Fevad, 2016

Band cards

Online wallets

Cards*

Other**

Checks

85%

9%

3%

1%

1%

*And other forms of payment**Gift vouchers, transfers/withdrawals, cash-on-delivery

Most popular destinations for cross-border purchases in FranceSource: IPC

China

Germany

UK

US

Belgium

25%

22%

18%

12%

4%

And although FEVAD’s latest figures show average spend per transaction has started to fall (now at €70), that’s more than offset by a growth in shopping frequency. Online shoppers make an average of 28 purchases each year, at a total value of €2,000 – with clothes topping the list of products they buy, followed by shoes and beauty items.

m-commerceThe rise of m-commerce is gaining momentum in France. Partly that’s down to access – as those who own a smart device increased from 49 per cent in 2014 to 62 per cent in 2015. But retailers have responded and now 94 per cent of online retailers in the market offer a mobile site.

There is still a lot of evidence that suggests mobile complements in-store shopping, as people compare prices or hunt out further information, but the number of people who have used their mobile device to make a purchase has risen to 9.3 million – or 25 per cent of mobile users. Nearly €10bn was spent on these devices in 2015.According to a report on SiecleDigital.fr, the number of purchases has increased 89 per cent since then. And Amazon, it says, saw an impressive 50 per cent of its sales over Christmas 2016 generated via mobile.Ecommerce Foundation puts the average at 28 per cent of sales – but it also says mobile accounts for 22 per cent of online e-commerce traffic, and that suggests a slightly higher conversion rate is up for grabs for retailers who offer a simple and compelling shopping experience tailored for smartphones and tablets.Apps are one way to do this. Some 30 per cent of mobile users have already made purchases this way – and the top app in France is flash sale site venteprivée.com. Flash sales are also a big driver of m-commerce overall, according to Euromonitor. As for the products seeing strongest growth, Criteo research highlights fashion and luxury and sporting goods as ones to watch, up 21 per cent and 18 per cent respectively over the past year.

Mobile use in-store encourages the growth in m-commerce

E-commerce apps are growing in popularity

Smartphone usage in retail storesThe usage of a smartphone when shopping in retail stores, 734 respondents, March 2015Source: UPS, 2016

Compare prices

Read product detail

Read reviews and feedback

Contact friends/ family to request

feedback

Scan a QR code

Upload a picture of a product

Search for specific products and alternatives

29%

18%

18%

18%

15%

12%

11%

Top 6 apps in FranceSource: siecledigital.fr

1. Vente-privée

2. Amazon

3. Showroomprive

4. Apple Store

5. FNAC

6. LeclercDrive

Delivery trends New logistics approaches, such as unlimited delivery subscriptions, free delivery and returns and pick-up lockers, are also helping to drive the continued growth in e-commerce in France.

The country already has the highest penetration of click-and-collect for groceries in the world, according to Euromonitor, and recent innovations include expanding into drive-through collection points.The French lead the way in the popularity of pick-up points close to consumer homes, including at post offices, local stores and in lockers in railway stations. In fact, the option is now on a par with home delivery. This highlights the need for retailers to prioritise consumer convenience when considering delivery options – and the importance of offering a choice.Reliability is also as important as speed. French consumers are accustomed to the reliability offered by the postal network and expect online retailers to meet their expectations. This means they often require reassurance about delivery, from being given all the relevant information up front to having the option of tracking their goods. Research from the UK’s Royal Mail highlights that this is far more important in France than it is in the UK – 85 per cent would ideally like to track every order (versus 60 per cent in the UK), rather than just high-value items.

Free returns and tracking delivery are the most important factors for French consumers when considering online purchases

Pick-up points have become as popular as home delivery in France

Reliability matters when delivering the goods

Delivery method preferencesPercentage of online shoppers, delivery methods, 2016Source: Baromètre FEVAD/CSA, 2017

Delivery at home/ workplace

Relay point delivery

Delivery in store (click-and-collect)

Delivery of orders

85%

85%

36%

11%

Online shopping attitudesSource: Fevad, 2016

To be able to return items for free

Kept updated with the stages of delivery

Clear delivery information before I place my order

SItes that offer free delivery

Being happy with the delivery of my goods

Having a clear returns policy

Specify the day I want my goods delivered

To be able to specify delivery time slots e.g. 9-11am

A wider range of delivery options

I can reserve an item online and collect it from the shop

Offered same day delivery options

If my goods were delivered in the evening

77%

France

69%

57%

64%

49%

75%

61%

39%

37%

30%

36%

28%

26%

75%

74%

70%

67%

60%

56%

48%

39%

37%

33%

23%

UK

Reason for satisfactionSource: Royal Mail, Delivery Matters, 2015

Item arrived in great condition

Item arrived when expected

The delivery was fast

I was kept informed of the status

The delivery was free

The delivery person was friendly

Dropped off somewhere convenient

Delivered by a carrier that I trust

72%

France

67%

65%

53%

35%

43%

49%

14%

38%

64%

55%

50%

33%

25%

25%

18%

UK

« French consumers are accustomed to the reliability offered by the postal net-work and expect online retailers to meet their expectations »

It also found that French consumers are most influenced by the offer of free returns. And although overall returns numbers in France may appear low at six per cent, this rises to 20 per cent in some retail categories, such as fashion – and 40 per cent of French consumers think existing returns procedures are overly complex.

Find out more on www.asendia.co.uk

Asendia services Asendia’s cross-border e-commerce solutions are here to help you grow your business internationally. Through its parent company La Poste, Asendia knows France inside and out, so we’re well placed to offer advice on how best to succeed in France.

Asendia can provide different solutions to deliver your small goods (up to 2 kg) in the most cost-effective way and with priority lead times. Goods from outside the EU will profit from efficient postal clearance solutions and we will minimise the customs and VAT charges for your low value goods.Our shopper-friendly Fully-tracked Goods service provides full tracking visibility and you can choose whether or not to require a customer signature upon delivery.Country-tracked Goods is a budget-friendly service, offering basic tracking information. Our Standard Goods product offers the most cost-effective delivery solution, perfect for small goods that don’t require tracking. You can minimise costs further by choosing longer lead times through our Economy option.

Low-value Goods

Asendia offers you expert knowledge and tailored Direct Mail solutions to help you grow your e-commerce business faster.

Our solutions help you acquire new customers,keep existing ones, and increase the business you do with them by raising the profile of your products and services across borders.

Our Premium Goods service for parcels weighing up to 30kg aims to ensure the best experience for both senders and recipients and is designed with e-commerce in mind. It offers delivery, return and tracking options to suit your preference and the greatest convenience for your customer.With direct access to all of La Poste’s services, Asendia can provide you with solutions tailored to your needs. La Poste offers an excellent delivery and pickup network for efficient consumer delivery, based on its longstanding experience as national postal operator. Thanks to its Colissimo service, La Poste remains the preferred delivery solution for French consumers. Asendia offers three core services within the Colissimo network of La Poste to suit your needs:

Mailbox Delivery: The parcel is delivered to your recipient’s home address and does not require a signature upon delivery. If delivery is not possible, the recipient has a range of choices for alternative delivery or can choose to collect the parcel from a conveniently located post office. This delivery service is widely used across France by leading e-commerce companies. Personal Delivery: The parcel is delivered to the recipient’s home address and a signature is required. Again, if delivery is not possible, the recipient has a range of choices for alternative delivery or can choose to collect the parcel from a conveniently located post office.

Pick-up (PUDO) point delivery: The recipient is notified of a pick up point to collect the parcel. They can choose from around 10,000 post offices, 7,500 convenience stores with longer opening hours, and more than 1,000 locker stations that are accessible all year round.

Asendia can also provide tailored customs clearance solutions to help minimise your duty costs.

Direct Mail solutions

Premium Goods

Sources: FEVAD and Ecommerce Foundation (unless otherwise referenced).

WE SUPPORT YOUR BUSINESS AS IT FLOURISHES INTERNATIONALLY As our world becomes increasingly connected,choosing the right partner to help meet logistical and technological challenges is vitally important; for building relationships across borders and for winning potential customers, businesses and new reader markets.

Formed in 2012 as a joint venture between La Posteand Swiss Post, Asendia is one of the world’s leading international mail and goods shipping providers and offers a remarkably diverse range of services aimed at empowering your business.

Our vision is to make cross-border commerce easy and reliable, all around the world.

over 1100experienced

EMPLOYEES

WithA local presence in

15COUNTRIES

Serving 220COUNTRIES

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e-commercedirect mailpress & publishingbusiness mail

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