The Netherlands: a European e-commerce hotspot. A consideration for UK businesses?
With a population of just 16.8 million, the Netherlands is among the smaller players on the European e-commerce landscape. However, it has a strong economy and per capita, spending was still £414 in 2016 and is expected to be £482 in 2017, which will amount to e-commerce sales exceeding £10.2 billion.
The Dutch have an excellent technology infrastructure with more homes than anywhere in Europe having broadband speeds of 50Mps and higher. So, it is not surprising that 98% of the population uses the internet. It also has the highest tablet ownership in the world with 51% of people going online via a tablet. But how do consumers prefer to shop online? As 2016 drew to a close, laptops had a 48% share of online sales, with desktop PC’s following at 34%. Just over 16% of all online sales came from mobile devices – both tablets and smartphones compared to 50% in the UK, however with high mobile device ownership this figure is set to increase.
WhatsApp, which started allowing certain brands to communicate with consumers on its platform in 2016, is the most popular social network in the Netherlands closely followed by Facebook. While opportunities on WhatsApp are still being explored, Facebook’s audience segmentation options offer brands the potential to build brand awareness through paid media.
Flexible delivery and digital wallet use on the rise
According to delivery logistics specialist Metapack, the most popular drop-off method in the Netherlands is home delivery, at 92%. From a pick-up point is next at (32%), then click-and-collect (28%). As consumers in the Netherlands demand shorter delivery timescales, international brands need to develop solutions to meet that demand or differentiate their offer so that timescale is not a deciding factor in the purchase. Returns also now play a big part in influencing purchasing decisions, with 47% of Dutch consumers preferring to drop off their return over posting it. A common concern of consumers across Europe is that returns policies are not always easy to find on retailers’ websites.
“We expect our purchases to be delivered in 1-2 days, everything past that gets annoying. The latest innovators are letting consumers decide where they want their parcel delivered, not just when. So, if you are sitting in a restaurant and your parcel is ready, they will deliver it to you there, rather than to your empty home,” said Marnix, Oban Local In-Market Expert (LIME), The Netherlands.
One payment method stands out for consumers in the Netherlands – online payment service iDeal has a 56% market share compared to 5% for Paypal. Compatibility with the Dutch equivalent of PayPal is therefore essential, but credit and debit cards are still a popular choice, followed by direct debit.
Adjusting to e-commerce in the Netherlands
The Netherlands is a small country with a limited internal market, making online purchases from international retailers is extremely popular. Cross-border e-commerce is prevalent with 46% of internet users buying a product from a foreign country – most likely Germany, the United States or China – in 2015. Of the products most sought after, clothing and fashion items are the most popular, with home appliances and books and electronics close behind.
The best performing websites include Bol.com, AliExpress, and Amazon – all of which are general retail destinations – and Zalando and H&M, who specialise in fashion.
Non-native brands that have adapted to the Dutch marketplace
A fairly recent phenomenon, it’s only since the 1990s that foreign brands have performed well in the Netherlands. Swedish companies, H&M, Bjorn Borg and IKEA can thank local knowledge for their continued success in the lowlands. Spanish clothing giant Zara is a recent addition to the Dutch retail landscape, opening three stores in the last five years.
Key takeaways before going to market:
- iDeal must be a payment option – an extremely popular PayPal alternative in the Netherlands.
- Delivery and returns influence purchasing –offer clear and easy information on delivery and returns on your website to manage expectations.
- Largest percentage population tablet ownership in the world – ensure that your customer experience is seamless across all devices.
Contact us today to see how we can help your business explore new markets like the Netherlands.