Czech Republic - eCommerce Czech Republic - eCommerce
Overview
In 2017, the eCommerce market in the Czech Republic was worth $5.68 billion. The compound annual growth rate is projected to be 6.3 percent over the next five years. The largest market segment will be Electronics & Media, the market size for which is projected to be $830 million in 2018. Currently, 47.9 percent of the population use eCommerce. This is expected to increase to 51.8 percent by 2022. The average revenue per user is $515.
eCommerce is widely used in the Czech Republic due to the availability of online shopping for a variety of goods. In 2017, 56 percent of the Czech population were online shoppers, and Internet sales of goods and services rose to an estimated $4.1 billion. Internet penetration continues to steadily increase and is currently at 94.1 percent for the country. Online purchases reached 9.7 percent of total retail sales in the country in 2017. Competition is very strong among Internet retailers in the Czech Republic. Three out of four shoppers request same day delivery.
Current Market Trends
Virtual shopping is gaining in popularity with several Czech firms attracting clients with cost savings and home delivery, offering everything from contact lenses to car tires. Some global Internet marketplaces are active with localized sites but most major U.S. firms are still absent from the market. The youngest generation (ages 16-24), buy via smartphones, while the financially strongest group (ages 25-45) uses smartphones as well tablets, followed by the remaining population mainly using desktops.
B2B eCommerce
The Czech government strongly encourages B2B and B2C eCommerce. These are conducted through well-known business platforms and strategic partners. An eShop can be operated by both Czechs and foreigners. Both need to obtain a trade license from the Czech Trade License Office, unless they are registered elsewhere in the EU. Both also need to be registered with the Czech Commercial Registry. Foreign entities with an established eShop elsewhere in the EU, may wish to use a Czech Republic address. The operator of an eShop needs to determine which legal jurisdiction governs relationships with its customers to ensure that they fulfill all statutory obligations (e.g. rights and obligations of the parties to the contract, customer claims in the case of defects or limitation periods, etc.). There are no market barriers and the infrastructure is integrated with that of other EU countries.
The Czech Republic offers many ebusiness opportunities for worldwide buyers and sellers in areas such as: computers and software; telecommunications; consumer electronics; chemicals; hi-tech; automobiles; transportation; industrial supplies; stone, glass and jewelry; textiles; wood; animal products; etc. Sterkh, Pauls Trading, No Logo, Profod, and Suprotech are among the leading companies. Sales-channels include: direct sales, email marketing, search engine marketing, social & display ads, search engine optimization, public relations, offline ads, existing platforms, and affiliate marketing.
Cross-Border eCommerce
Interest in cross-border eCommerce is growing among Czech customers. The decision to buy through foreign online stores is most often based on lower prices, and on access to products not available in the Czech Republic. The markets most often mentioned for cross-border eCommerce include Germany ($42.7 billion) and China ($8.7 billion), followed by other EU countries and the United States. Customer support and site trustworthiness are important for Czech customers. For cross-border eCommerce, the most sought after items include digital products and electronics, followed by clothes, jewelry/watches and cosmetics. The most popular online shops in the Czech Republic include Alza, Mall cz, Kasa cz, CZC cz, 123 Shop, and Monkey Data.
eCommerce Services
eCommerce services include legal, accounting and consulting services; trade and tax compliance; PR and marketing; and business opportunities (B2B sales). Lists of trade lead contacts for manufacturers, distributors, wholesale agents, buying offices, importers, and exporters, are available at Scalefast eCommerce web services can be found at Shopify. Czech companies use the above-mentioned non-Czech websites.
eCommerce Intellectual Property Rights
Several principles are important for effective management of intellectual property (IP) rights in the Czech Republic. It is important to have an overall strategy to protect company IP. Second, IP may be protected differently in the Czech Republic than in the United States. Third, the IP rights must be registered and enforced in the Czech Republic under local laws. For example, a U.S. trademark and patent registration will not protect a U.S. company in the Czech Republic. There is no such thing as an “international copyright” that will automatically protect an author’s writings throughout the entire world. Protection against unauthorized use in a particular country depends on the national laws of that country. However, most countries do offer copyright protection to foreign works in accordance with international agreements.
IP Attaché Contact for the Czech Republic
Name: Susan Wilson
Address: U.S. Mission to the European Union, Boulevard du Régent 27, BE-1000, Brussels, Belgium
Telephone: +32 2-811-5308
E-mail: susan.wilson@trade.gov
Online Payment
Credit cards are popular among Czech consumers for online purchases. Multinational financial corporations like Visa, MasterCard, Maestro, American Express, and Discover process payments between merchants and card issuing banks. Although credit card payments are the most popular by a wide margin (around 75-80 percent), other payment methods include pre-paid cards, ewallets, bank transfers, and mobiles. All major international credit cards are accepted. Electronic banking is a common practice. Banks in the Czech Republic are considered safe.
Mobile eCommerce
Mobile devices are a key platform for digital content and communications and they are rapidly gaining ground in the retail and commercial domains. This development is driven by the huge growth in smartphone sales. In 2017, the Czech Republic’s smartphone usage increased again to almost 8.5 million devices (out of a population of 10.5 million). The widespread adoption of increasingly powerful smartphones with larger screens is improving the eCommerce experience. Meanwhile, more and more retailers are optimizing their sites for mobile shopping.
Digital Marketing
Czech digital marketing began in 2004. Only 43 percent of companies invested in Internet advertising at that time. By 2012, smartphones had become popular for eCommerce which resulted in a greater use of digital advertising. Alza, the best known Czech eShop, opened its mobile operation in 2012. Digital marketing agencies offer advice, assistance, and eCommerce marketing platforms. To successfully enter the Czech market, a company must be technology and data driven. In 2017, companies spent over $820 million on online advertising. TV advertising was the most popular and consumed almost half of companies’ advertising budgets. In 2017, digital marketing was second in advertising spending, with over 22 percent of the market, followed by press advertising. eCommerce digital marketing spending doubled in 2017 (compared to 2014).