Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and, reputable, prominent B2B websites.
Last Published: 8/23/2017

The European Union’s Digital Single Market Initiative
Creating a Digital Single Market (DSM) is one of the ten priorities of the European Commission (EC).  The overall objective is to bring down barriers, regulatory or otherwise, and to unlock online opportunities in Europe, from e-commerce to e-government.  By doing so, the EU hopes to do away with the current 28 fragmented markets and create one borderless market with harmonized legislation and rules for the benefit of businesses and consumers alike throughout Europe.

The EC set out its vision in its May 6, 2015 DSM Strategy which has been followed by a number of concrete legislative proposals and policy actions.  They are broad reaching and include reforming e-commerce sector, VAT, copyright, audio-visual media services, consumer protection, and telecommunications laws.  Most of these proposals are currently going through the legislative process. DSM-related legislation will have a broad impact on U.S. companies doing business in Europe.


The three main pillars of the strategy are:

Pillar I: Better access for consumers and businesses to digital goods and services across Europe

  • Remove key differences between the online and offline worlds to break down barriers to cross-border online activity
Pillar II: Shaping the right environment for digital networks and services to flourish
  • Achieve high-speed, secure and trustworthy infrastructures and content services
  • Set the right regulatory conditions for innovation, investment, fair competition and a level playing field

Pillar III: Creating a European Digital Economy and society with growth potential

  • Invest in technologies such as cloud computing and Big Data, and in research and innovation to boost industrial competiveness and skills
  • Increase interoperability and standardization

Additional information on DSM
DSM Strategy


The Electronic Commerce Directive (2000/31/EC) provides rules for online services in the EU.  It requires providers to abide by rules in the country where they are established (country of origin). Online providers must respect consumer protection rules such as indicating contact details on their website, clearly identifying advertising and protecting against spam. The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content. 
 
Comprehensive Market Research on e-commerce in the EU is available upon request.
 
Additional information on eCommerce in the EU

For information on this topic please consult the Commerce Department’s Country Commercial Guides on EU Member States: EU Member States' Country Commercial Guides

Alternatively, search the Commerce Department’s Market Research Library.
 
Value Added Tax (VAT)
The EU’s VAT system is semi-harmonized.  While the guidelines are set out at the EU level, the implementation of VAT policy is the prerogative of Member States. The EU VAT Directive allows Member States to apply a minimum 15 percent VAT rate. However, they may apply reduced rates for specific goods and services or temporary derogations. Therefore, the examination of VAT rates by Member State is strongly recommended.  These and other rules are laid out in the VAT Directive.
 
The EU applies Value Added Tax (VAT) to sales by non-EU based companies of Electronically Supplied Services (ESS) to EU-based non-business customers.  U.S. companies that are covered by the rule must collect and submit VAT to EU tax authorities. From 1 January 2015, all supplies of telecommunications, broadcasting and electronic services are taxable at the place where the customer resides. In the case of businesses this means either the country where it is registered or the country where it has fixed premises receiving the service. In the case of consumers, it is where they are registered, have their permanent address, or usually live. 
 
As part of the legislative changes of 2015, the Commission launched the Mini One Stop Shop (MOSS) scheme, the use of which is optional. It is meant to facilitate the sales of ESS from taxable to non-taxable persons (B2C) located in Member States in which the sellers do not have an establishment to account for the VAT.
 
This plan allows taxable persons (sellers) to avoid registering in each Member State of consumption. A taxable person who is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) can electronically submit quarterly Mini One Stop Shop VAT returns detailing supplies of ESS to non-taxable persons in other Member States (the Member State(s) of consumption), along with the VAT due.
 
The Commission has received numerous complaints in relation to the new rules on ESS and is in the process of revising them.
 
The most important pieces of legislation on VAT are the EU VAT Directive 2006/112/EC and its Implementing Regulation 282/2011.

Further information relating to VAT on ESS


Overview of the Italian market

E-commerce in Italy is developing rapidly and has registered annual two-digit growth over the past five years. Although the Italian digital economy lags behind other major European countries, e-commerce is poised to continue its upward trend in the next three years, with Business-to-Consumer (B2C), Business-to-Business (B2B), and Consumer-to-Consumer (C2C) transactions all posting solid growth. The turnover from e-commerce in Italy was estimated at $22 billion in 2016[1], totaling a 32% growth over 2015. If online gambling services are taken into account, the total turnover from e-commerce reaches $34 billion. The online services segment is responsible for the majority of e-commerce revenue (54%), while the remaining 46% was generated from goods.

Current Market Trends
The number of Italian web shoppers is constantly increasing, totaling 17.7 million out of 35.7 million internet users and growing. Italian firms are increasingly, if begrudgingly, turning to e-commerce platforms and marketing to sell their brands. Digital and mobile payment platforms are steadily increasing in Italy, as are the number of online e-commerce outlets. The main factors fueling the growth of e-commerce in Italy will continue to be improved Internet access infrastructure and wider availability of broadband connection; a mobile and smartphone diffusion among the highest in the world, which will enable both the business and consumer segments to take advantage of new technologies for e-commerce transactions; recognition of e-commerce as a means to provide better support to customers and suppliers; improved transaction security; and Italian legislation which recognizes the legal validity of digital signatures and digital contracts.

Domestic e-commerce (B2C)
The B2C e-commerce market in Italy generated $21.4 billion in 2016, an increase of 18% over 2015. In addition, B2C e-commerce is expected to grow by 20% in 2017, reaching $25.5 billion.

 
The number of Italian web shoppers is constantly increasing, reaching 17.7 million, out of 35.7 million internet users in the country[2]. In spite of the positive trends, in absolute terms the Italian B2C e-commerce market was still only worth one tenth of the market in the United Kingdom, one sixth of the German market and one fifth of the French market in 2016. The number of repeat shoppers (at least one purchase per month) is 11.1 million, with an average expenditure of $98 per transaction per person.
Italian e-commerce penetration over total retail expenditures increased from 4% in 2015 to 5% in 2016. However, in comparison with countries like UK, France and Germany e-commerce penetration reaches 15-20%, Italian rates are significantly lower.
 
Contrary to other major European countries, where sales of products account for 65%-80% of the overall e-commerce market, the services sector in Italy totaled 54% in comparison to 46% for products. However, experts expect these numbers to reach European levels in the next few years, with products steadily increasing their share of electronic sales. With regard to services bought online, tourism is still the most popular e-commerce category in Italy (44% of the market value with 10% growth rate), followed by insurance services (7.5%) and ticketing for events (5.5%). In terms of products purchased online, information technology and consumer electronics dominate with a 15% market share and 15% growth rate, followed by clothing (10% market share and 27% growth) and publishing (7% market share and 16% growth). Emerging sectors including food, furniture/home decor, beauty and toys are growing between 30%-50%.


Cross-Border e-Commerce
According to Postnord’s 2016 E-commerce in Europe Report, Italy has the lowest level of Internet penetration of all European countries. However, 58% of Internet users shop online, and more than half purchase from foreign companies, mainly buying home electronics, clothing and footwear, and books. The most popular foreign e-shops used by Italian customers are primarily located in the United Kingdom. (20%), Germany (16%), China (13%), and the United States (5%)[3]

 
In terms of e-commerce sales, the presence of Italian companies in foreign markets is currently more significant within the European Union. 20% of Italian companies sell online in France, 18% in Germany and 15% in the United Kingdom. As far as extra EU countries are concerned, 10% of Italian companies sell to the United States, 8% to Asian countries (2% to China, 2% to Japan, and 4 % to other Asian markets), and 3% to South America.[4]
 
Outside of the EU, the first market target for Italian companies is the United States (35%), followed by China (16%), other Asian markets (11%), and Japan (7%).[5] The total volume of sales from Italian websites to Italian and foreign customers grew by 20% and reached $19.3 billion in 2016. In fact, 29% of overall online sales from Italian companies were generated abroad, with a 2% growth over 2015. However, for Italian companies with foreign subsidiaries or members of international groups, the percentage was much higher at 44%. For Italian companies selling abroad only via website, the turnover share originated from sales abroad was higher for companies with multilingual websites (35%), while it was considerably lower for those companies operating through websites only written in Italian (8%).[6]


B2B eCommerce
B2B eCommerce is integral in Italy.  According to the Milan Polytechnic, in 2015 the estimated total value of B2B e-commerce activities in Italy roughly amounted to $284 billion, equivalent to 10% of all B2B transactions.[7]

 
Despite its rising trend, digitalization rates among Italian firms is quite low, and the majority of small- and medium-sized companies are far from embracing a transformation process which would improve and cut the costs of B2B relations. In 2015, only 75,000 companies used B2B tools (EDI – Electronic Data Interchange, Extranet, and B2B Portals) in their relationships with clients and suppliers, although the number of digital interactions is steadily rising. In addition, the obligation of delivering electronic invoices to the Italian Public Administration (PA) has resulted in a slight push towards digitalization for both private and State-owned companies.
 
The most common B2B e-commerce model is e-business, which entails the digitalization of corporate processes in conjunction with clients and suppliers (supplier selection, management of customer orders, after-sale services, etc.). In addition, over the last few years web portals for B2B e-commerce (similar to e-commerce B2C models) became increasingly popular, as well as B2B Marketplaces.
 
B2B e-commerce applications and e-procurement are registering continued growth. The most active players implementing B2B solutions are in the automotive, pharmaceutical, consumer goods, electronics and consumer electronics sectors. Specialized B2B applications in key “Made in Italy” sectors are also gaining momentum; there is an estimated 350 B2B platforms across different industries. Virtually all major Italian industrial groups utilize e-procurement and forecasts indicate that in the next few years up to 80% of all company purchases will be online.
The need for the Italian public sector to improve efficiency is driving the growth of e-procurement and significant developments are occurring in this field. In order to rationalize expenditures for goods and services, both the central and local Italian government offices utilize the Italian Public Administration eMarketplace (MEPA), an e-procurement platform managed by Consip SpA, the Italian Central Purchasing body, which 100 % owned by the Italian Ministry of Economy and Finance (MEF) through its division “Acquisti in Rete PA” (Public Procurement Online). MEPA connects Italian public bodies to thousands of suppliers throughout Italy.
 
The public sector utilizes e-sourcing to purchase information technology equipment and office supplies, furniture, uniforms, personal safety devices, vehicles and suppliers for healthcare. Electronic procurement of services is also growing, particularly in the areas of energy (fuel, electric power), printing services, vehicle rental, cleaning services and financial services.
 
For purchases with a value above the mandatory EU publication threshold, government bodies issue public tenders open to both domestic and foreign companies.
Announcements of tenders on public procurements monitored by the U.S. Mission to the European Union.


eCommerce Services

Italy is a market to watch when it comes to eCommerce. With a population of 61 million, Italy is Europe’s fourth largest consumer market, making it a sizeable opportunity. Its rate of eCommerce growth -- expected to be more than 20% in 2017 -- makes it one of the fastest growing in Europe. Smartphone penetration is rising fast, taking m-commerce with it and boosting total e-sales.
 
In terms of B2C retailing platforms, international players have a strong influence on the Italian eCommerce market. This is due to the low level of Italian firms that sell online; in fact the major online retailers in Italy are Amazon.it and eBay. Other popular eCommerce websites in Italy include: Subito.it, Aliexpress.com, Zalando.it, Autoscout24.it, Groupon.it, Yoox, and Pixmania. Furthermore, Banzai Srl, Italy’s leading e-commerce operator controls ePrice.it and Saldiprivati.it.
 
A number of companies in Italy offer successful omnichannel digital solutions and international eCommerce sites which are multilingual, multi-currency, multi-collection and multi-brand. These types of businesses support brands in managing all aspects of their own e-stores, including retail strategy, activity planning, communication, web marketing, store management, customer care, invoicing, and payment collection. These channels offer opportunities for U.S. for small- and medium-sized enterprises interested in selling to the Italian market.


eCommerce Intellectual Property Rights
For more information on Intellectual Property Rights in Italy, please see the relevant section in the Country Commercial Guide
(Protecting Intellectual Property). Although Italy respects IPR issues, challenges exist in the area of illegal downloading of music, movies, games and software from peer-to-peer websites.


Popular eCommerce Sites
Popular marketplaces, offering products in a wide variety of categories, including: www.amazon.it, www.ebay.it, www.mediashopping.it, www.aliexpress.it, www.subito.itwww.dmail.it, www.comproedono.it.
 
In addition, there are a range of online marketplaces specialized by sector. The following list is a selection and is not meant to be comprehensive.
 
Travel and tourism: www.edreams.it, www.expedia.it, www.it.lastminute.com, www.venere.com, www.volagratis.it, www.tripadvisor.it, www.opodo.it, www.kayak.it , www.skyscanner.com, www.trivago.it, www.booking.com
 
Information technology and consumer electronics: www.bow.it, www.chl.it, www.eprice.it, www.euronics.it, www.monclick.it, www.mrprice.it, www.mediaworld.it, www.saturn.it, www.unieuro.com, and www.trony.it
 
Fashion: www.yoox.com, www.zalando.it, www.saldiprivati.com, www.privalia.com, www.vente-privee.com, www.buyvip.com 
 
Books, music and video: www.amazon.it, www.ibs.it, www.bol.it, www.mondolibri.it, www.unilibro.it  and www.lafeltrinelli.it
 
Couponing: www.groupon.it, www.groupalia.it, www.glamoo.com and  www.letsbonus.it are among the most important sites.
 
In addition to these marketplaces -- mostly B2C -- there are many B2B marketplaces and virtual malls specialized by industrial sector.
 
Web Resources
Acquisti in Rete – AiR (“Public Procurement Online”) -- The AiR portal provides access to a fully functional e-procurement platform
 
Netcomm -- Italian E-Commerce Consortium
 
Most Popular Search Engines
Google is the most popular search engine, primarily the Italian version (www.google.it), but also in its .com version in English. The other most popular search engines are www.yahoo.it, www.virgilio.it, www.libero.it, http://it.msn.com, www.bing.com, and www.tiscali.it.
 
U.S. companies can contact each search engine to submit their sites for listing free of charge, but can also subscribe to special advertising services for a fee. U.S. companies may also hire local firms specialized in "web positioning" and search engine marketing services for website optimization. Although not required, it is advisable for any U.S. company that wishes to rank high on a local search engine to translate into Italian at least keywords and some text.


Delivery and Express Delivery
Italian consumers have grown used to a fairly slow and at times unreliable domestic postal service, though the increase of eCommerce is raising demands and expectations on speed and quality of service. While the range of delivery options available to online shoppers is expanding, with lockers and collection/return points rolling out across major cities in the past two years, these are still in their infancy, and 90 percent of online purchases (including digital products) are delivered to an address supplied by the shopper, typically their home. As the eCommerce market develops, so too do the options for alternative delivery points or timed slots. It is always advisable to offer tracking for more valuable goods.

 
U.S. SMEs can take advantage of a number of express delivery options when shipping goods to Italy. Global logistics companies such as Fedex, UPS, DHL, TNT and others guarantee a second business day delivery to Europe from mainland U.S. To date the B2C delivery has been dominated by national postal service Poste Italiane and local couriers SDA and Bartolini.
 
Most logistics companies will offer a range of options for international delivery, at different price points to meet customer needs. These usually feature different levels of tracking and insurance. Parcels can be delivered in person to the recipient, a neighbor or to mail boxes. Logistics companies can also help with bulk deliveries into the market to help cut costs, and advise on packaging, address formats and labelling.
 
Italian consumers will search for the cheapest possible prices. When domestic retailers offer speedy delivery, it may be worth exploring domestic fulfilment options in order to compete. Logistics companies either run their own fulfilment centers or can recommend reliable local fulfilment partners.


Online Payment
The use of credit cards in Italy lags behind the United States and some European countries, due to security concerns among Italian users. Nonetheless, in 2016 credit cards were the main method of payment for eCommerce transactions with an estimated share of 45% of overall payments, followed by PayPal and other digital wallet services (27%), bank transfer payments (13%) and cash-on-delivery (13%)[8]
.
 
Digital and mobile payment platforms are growing in Italy. In addition to PayPal, in April 2017, Amazon Italy and Alibaba Group announced the launch of mobile payment platforms Amazon Pay and Alipay which provide the option of purchasing goods and services from websites and mobile apps using addresses and payment methods stored in the user accounts. Moreover, major groups like Apple and Samsung are launching their digital payment services, which can be used both in online and physical stores.
 
We see strong differences in the methods of payment between the purchase of goods and services. Credit cards are utilized 99% of the time in the travel and tourism sector, and 65% in the insurance sector. On the other hand, cash-on-delivery still has a minor role in the information technology/consumer electronics sector, as well as in the apparel, book/music/audiovisual and grocery sectors.
 
Experts predict that the transposition of the EU Directives on Payment Services (PSD) and on Electronic Money into national legislation will further propel the development of these services in the market. Italian legislation fully complies with EU consumer protection directives regarding the specific information that e-commerce sites must provide, and sets rigid privacy protection requirements for the opening of e-commerce sites, including encryption, firewalls, secure protocols and digital certificates. Italian legislation recognizes the legal validity of digital signatures and digital contracts.
 
Additional information:
EU Payment Services
EU Payment Framework 
 
According to a study by Milan Polytechnic, one of the most notable factors driving market development is the exponential growth of mobile commerce, which registered sales of $2.1 billion via smartphone and $4.4 billion via tablet in 2014. Mobile phone penetration in Italy is among the highest in the world, with 36 million users, 30+ million smartphones and close to 8+ million tablets. Social networking in Italy is booming and 28 million Italians are active social media subscribers with 22 million active mobile accounts.  Around 26 million Italians are active Facebook subscribers and increasing using smartphones and tablets to take advantage of exclusive offers presented to them through social media. Analysts predict that mobile commerce sales will continue to grow exponentially, reaching $9.5 billion by 2016. Purchases via smartphones are increasingly popular (+64% year on year) reaching a market share of 10% of all e-commerce transactions.


Mobile eCommerce
In 2016, mobile commerce sales accounted for the 26% of total online sales for Italian companies. Over the last few years, mobile has steadily grown, accounting for 5% of total sales in 2012, 8.5% in 2013, 13% in 2014, and 22% in 2015. Italian companies are starting to invest more in mobile versions of e-commerce websites and apps, with 57% of Italian companies foreseeing investments in mobile commerce in 2017.


Digital Marketing
Italian companies have been rather slow to adopt online brand promotion. In 2016, 58% of Italian companies surveyed found online promotion to be a challenge, and 10% considered it to be ineffective. Less than a third of overall companies (32%) were reportedly satisfied with their online branding activities. However, Italian companies must invest in digital marketing if they want to survive. More Italian firms are investing in keyword advertising, social media marketing, search engine optimization and e-mail marketing. According to the 2017 E-Commerce Report, investment trends in the coming years will be mainly focused on marketing and promotion, followed by investments aimed at improving the user experience for websites and apps. Important investments will be aimed at improving companies’ technological infrastructures, foreign sales, and mobile e-commerce[9]
.

 

Major Buying Holidays
Italian e-commerce websites set up special sales for traditional holydays and celebrations, such as Christmas, Easter, and St. Valentine’s Day. The Christmas season is the major buying holiday in Italy, when e-commerce websites track record sales.
 
Over the last few years, Italian physical and online shops have adopted Black Friday and Cyber Monday promotions, generally with successful public responses. In 2015 the Florence-based luxury outlet Luisaviaroma.com registered record sales in Italy, as well as in the U.K., China, and Germany. Moreover, during seasonal sales (July-September and January-March) e-commerce websites are launching competitive sales campaign, usually offering higher discounts than those in physical stores.

 

Social Media
Over the last decade, the advent of social media has influenced online marketing strategies, with social networks playing a critical role. In the first quarter of 2017, Facebook dominated the sector, with 72% of Italian companies considering it the most effective social network for online purchasing. Instagram is the second most popular social media, used by 37% of Italian companies, followed by YouTube (32%), LinkedIn (20%), Twitter (11%) and Google Plus (6%). Of these platforms, Instagram is growing the fastest and is currently the most effective media for influencer marketing. During the first quarter of 2017, 33% of Italian companies were satisfied with their ROI for social media investments, 41% had difficulties evaluating the impact of social media on their profits, and 26% stated that social media have a negative impact on their sales[10]
.

 


[1] https://blog.hipay.com/en/the-italian-e-commerce-is-living-the-dolce-vita

[2] Ecommerce Foundation, 2016

[3] E-commerce in Europe 2016, Postnord

[4] E-commerce Report, Casaleggio Associati, May 2017

[5] E-commerce Report, Casaleggio Associati, May 2017

[6] E-commerce Report, Casaleggio Associati, May 2017

[7] Osservatorio B2B, Milan Politechnic Osservatori Digitali, June 2016

[8] E-commerce Report, Casaleggio Associati, May 2017

[9] E-commerce Report, Casaleggio Associati, May 2017

[10] E-commerce Report, Casaleggio Associati, May 2017

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Italy eCommerce Industry Trade Development and Promotion eCommerce