Hungary’s online retailers overwhelmed by upswing in new orders

Hungary’s online retailers overwhelmed by upswing in new orders
The parcel delivery subsidiary of the state-owned postal company reported massive growth in demand
By Tamas Szilagyi in Budapest May 7, 2020

Online retail sales in Hungary grew 21.4% y/y in Q1 to HUF150bn (€428mn), according to a flash report by economic researcher GKI Digital. The number of orders grew by 15.9% in the same period.

The coronavirus pandemic has had a huge impact on sales as demand for food, cleaning products, vitamins, and medicines surged. There was also a shift to consumer durables, laptops and computer accessories after schools and companies moved to digital channels.

Turnover of items which are not indispensable during the quarantine, such as clothing or beauty products fell. Online retail sales are projected to grow in the second half driven by the rise in customer numbers and positive experiences during the lockdown. 

The number of people buying for the first time online increased by 50,000 to 3.35mn since mid-March. In the 2019 annual report, GKI Digital found that 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 at the end of 2019.

Online sales have been expanding at double-digit rates in recent years and accounted for about 7% of the total in 2019. This is below the EU's average and is considered low compared to other CEE countries. Online gross domestic retail sales, excluding orders from foreign websites increased by 16% to HUF625bn in 2019. In the latest report, GKI expects a 25% increase in turnover.

The pandemic situation has had a huge impact on logistics. Prior to the crisis four out ten orders were delivered to parcel points or to stores for pick-up. From mid-March consumers predominantly chose home delivery. Parcel delivery firms reported demand throughout April similar to that seen before Christmas.

Hungary’s retail sector has weathered the lockdown in March, according to the latest figures. The sector posted  a 4.4% y/y increase for the month and a 7.5% growth in the first three months. Food sales were up 9.6%, non-food sales climbed 8.2% and vehicle fuel sales fell 5% during the period.

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