French e-commerce grows in the 2nd quarter, but…

For the second quarter in a row, e-tourism is gaining traction and is driving e-commerce results up. Product sales dropped 17%.

The French e-commerce grew by 10% and recorded 35.7 billion euros in revenue in the second quarter of 2022. According to the quarterly barometer of Fevad, presented on September 20, 2022, the sector’s revenue earned 3.3 billion of euros in a year. As in the first quarter of 2022, it is the recovery in transport, tourism and leisure sales that is supporting the positive results of e-commerce. E-tourism sales increased by 68% after posting +135% growth in the first quarter.

Overall, the number of transactions continues to increase (+2.7%) and the amount of transactions is also increasing with an average basket of 67 euros (+7.2%). 14,000 commercial websites were created in one year, a more moderate 7% increase than last year (+16%).

Troubled product sales

Fevad notes that “this return to normalcy actually leads to an unfavorable base effect linked to increased competition with physical businesses.” This quarter, product sales dropped 17% from the sales peak seen in the same period last year. The level of product sales remains higher than before the Covid pandemic with +33% in the sector compared to 2019. overall decline of 16.4% in its turnover in all sectors (clothing, furniture and decoration, technical and beauty products included).

For Fevad, inflation, the energy crisis, the climate emergency and changes in consumption patterns, such as the use of second-hand goods, contribute to these developments. Marketplace sales also suffered from the situation and fell by 11% compared to the previous year, but at a higher level than in the second quarter of 2019 (+29%). Despite the decline in product sales, mobile sales grew 8% year-over-year and 41% compared to the second quarter of 2019, driven by sales in the travel and leisure sector.

Strong price competition

Kantar’s Worldpanel 2022 measures a slowdown in online spending on physical goods in the first half of 2022. Most of the decline is explained by the technical goods, home, culture and fashion sectors which account for 63% of online goods spending. Health and beauty purchases, for example, benefited from the Covid crisis and lost 0.5 point of market share in volume compared to the same period in 2021, resisted better in value (-0.1 point). This drop is linked to the loss of buyers because the sector had recruited during the pandemic (+4.6 million buyers in 2020 compared to 2018). 1 in 3 French people still buy personal care and beauty products once a year on the Internet and customers spend 30% of their spending in this sector online.

For online fashion shopping, spending is stabilizing around 20% market share. Pure players consolidated their customer base and converted larger buyers. The difference is felt in the prices paid per article: in click and mortar, the price paid per article is 2 euros higher than that paid for a pure player. The performance of the web should settle in the coming months between the drop in purchasing power and the returns that pay for themselves. Indeed, customers also aim to reduce their fashion spending by favoring low-cost brands and discount stores.

Online fashion is suffering

Clothing and textile sales benefited from a 4.4% increase in physical and internet sales during the first seven months of 2022, compared with sales recorded in the same period in 2021, according to the report. ‘MFI Panel. They are still down compared to the first seven months of 2019 (-9.2%). After a strong increase in online sales in 2020, with +22.2% according to IFM Panel data, internet textile sales benefited from a more modest gain in 2021: +5.8%, i.e. a lower increase than in store sales (+9.9%). The market share of online sales stagnated at 20.7% in 2021 compared to 21.2% in 2020 (was 15% in 2019).

The share of online sales in the revenue of retailers gained 6 points in two years (from 5.9 to 11.9%). While in-store sales increased by 21.2% in the first seven months of 2022, online sales of clothing and textiles were down 18.6% in the period. In the clothing and textile market, the weight of online sales is expected to fall below 20% for the whole of 2022. Online sales for 2022 are still expected to be significantly higher than in 2019.

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