Hungary's online retail sales expand 16% in 2019

Hungary's online retail sales expand 16% in 2019
By bne IntelliNews March 12, 2020

Online gross domestic retail sales continued to grow at a dynamic pace in Hungary, rising 16% to HUF625bn (€1.85bn) in 2019, according to a survey released by economic researcher GKI Digital and price comparison site on March 11.

Online sales have been expanding at double-digit rates in recent years and accounted for about 6.3% of total retail sales in Hungary last year. This is below the EU's average and is considered low compared to other CEE countries.

Orders from foreign online sites, most placed with Chinese businesses, were worth HUF145bn, but they present an increasing competition for the local players. GKI expects a temporary upswing in foreign orders before the change in EU tax rules come into effect from 2021.

The number of active online shoppers in Hungary, who buy from the web at least once a month, reached 3.3mn or 55% of adult internet users with total transaction of 43.3mn. More than 2mn Hungarians placed 17mn transactions with foreign webshops. The average size of consumer basket was HUF14,400 at local webshops and HUF8,800 for foreign ones.

Hungarians who make purchases online spent the most on electronics (HUF 147bn), followed by games and cultural products (HUF75.4bn) and computer products (HUF63bn). Online sales of FMCGs came to HUF62bn, up close to 20% from 2018. Geographically, the share of e-commerce is very concentrated. Half of all purchases are made in Budapest and in neighbouring Pest county.

The relatively low penetration of online sales in Hungary offers opportunities for new entrants, a GKI official told bne IntelliNews. Czech online supermarket has announced its launch in Hungary under the, at the end of 2019. 

The online supermarket, branded "crescent roll" in Hungarian, like the name of its Czech peer, is delivering to Budapest and the outskirts of the capital but plans to broaden its geographical market later.

Established retailers are connecting their online store with their brick and mortar network, in line with international trends. The convergence of online and traditional sales channels is the rising popularity of "click and collect" allowing consumers to pick up their online orders at designated stores.

Five courier companies rule the market: MPL, GLS, DPD, Sprinter, and Express One, which already operates its own packet point network. Two also have parcel terminals (MPL, GLS). MPL, the parcel subsidiary of state-owned postal company Magyar Posta, was the market leader in the number of parcels delivered.