Price is the main driver of Romanian E-commerce

Avatar for Mark Szemerszki
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Romanian e-commerce channels have continued to experience significant growth in 2017, due to the massive internet penetration and the rapidly growing number of laptop, tablet and mobile phone users. The rising salaries and decreased VAT also contributed to the increase in online sales and to the changes in shopping habits, especially in urbanized areas. As the vast majority of Romanian customers are extremely price sensitive, promotions and discounts have become the main focus in e-commerce marketing. Both the number of available promotions and the extent of the price drop have increased. The best representation of this phenomena is probably Black Friday, when most webshops have discounts of 50 to 80%.

Online shopping is expected to gain more and more space in the everyday life of Romanian customers due to increasing income and the constant stream of innovations.

Reshaping shopping behavior

Not surprisingly, price comparison websites play a major role in a Romanian’s online shopping journey. These websites allow individuals to find the best – in this case the cheapest – available options. On the one hand, this makes the decision of the customer easier. On the other hand, it creates a very intense price war between retailers. The price sensitive Romanian prefer spending more time on finding the best offer to avoid “cognitive dissonance”, dissatisfaction, after a purchase. The payment method of choice is cash on delivery.

How can companies overcome the price war?

With the intense usage of price comparison websites, customers continuously pressure companies to drop their prices. Developing a loyal customer network might be the key to losing this burden. Also, communicating the right message to the right target market might be crucial. Increasing marketing activities in order to grow brand awareness and highlight a company’s strengths is expected to have a positive impact on the sales margins as well.

Competitive Landscape

The online market leaders in Romania are all operating in the IT and CE sector. Emag has 25.1% market share, ALTEX has 10.9% market share and Cel.ro has 4.4%.

Both local and international players are present in Romania. The most successful international companies are Amazon, Alibaba and Fashion Days. Fashion Days is a member of the Naspers Ltd multinational internet and media group.

Next to eMAG, ALTEX, and Cel.ro, the biggest local players are Flanco, Vivre.ro, Elefant.ro, EvoMag.ro Okazii.ro Dedeman. eMAG (1,526.3 million RON) is considered to be a local player, since the majority of shares is hold by Romanian shareholders. ALTEX (662.8 million RON) lost 0.2% of its market share compared to 2016: it is stagnating. Cel.ro (267 million RON) lost 0.3% of its market-share by 2017. The others: Flanco is doing 237.159 million RON, Vivre.ro 152 millon RON, Elefant.ro 145.9 million RON, and EvoMag.ro 91.2 million RON.

References:

https://www.statista.com/

https://www.theguardian.com/world/2017/oct/14/romania-economy-booming

https://ecommercenews.eu/event-country/romania/

https://www.export.gov/article?id=Romania-ECommerce


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