The Most Improved Sector of the Year in Slovakia? E-Commerce!

In the recent years, the Slovak online market has gained a strong position on the map of European e-commerce – a large part thanks to foreign businesses that have entered the market mainly because of the low costs of e-shop administration and the rapid pace of demand’s growth.

Explosive growth 

Slovakia is a small Central European country in geographical terms, but its e-commerce’s growth rivals that of many large European countries. 2019 brought the turnover from online sales to EUR 1.3 billion, the strong year of 2020 increased it to EUR 1.75 billion, and by 2021, the turnover exceeded EUR 2 billion. The advantage for foreign e-shop businesses is not only the economic growth, but also the long-established Euro and the developed logistic network between the cities of Bratislava and Košice.

The share of online customers has also increased due to the impact of the COVID-19 pandemic. Government measures and lockdowns have shifted their attention from brick-and-mortar shops to the online space, increasing the traffic of webshops. We recorded a significant increase in the turnover, especially during the first wave, when brick-and-mortar shops were closed entirely. 

Slovak e-shopping

Retailers and brands entering the Slovak e-commerce scene need to make sure they understand the specific mentality of the customers. Slovakia currently has over 5.4 million inhabitants, with constantly growing interest in online shopping. In 2020, up to 6 of 10 e-shop visitors made a purchase online. The largest e-commerce category (in terms of turnover) is toys and hobby products, followed by electronics in the second place and fashion in the third; these are followed by furniture and home furnishings, food, and personal care. 

The trust in webshops is high in Slovakia, although a common barrier to online shopping is the force of the habit of trying out goods in person. It is important to provide a comparable shopping experience and to attract people with some extra benefit such as free shipping or an exclusive discount that customers cannot find in brick-and-mortar shops. In Slovakia, price is still an important factor in purchasing decisions. 

Growing campaign budgets 

Slovaks can choose goods from more than 14,000 e-shops every day. Therefore, those who want to be visible in the online environment must invest in marketing. Just like turnover, the spending on e-commerce marketing campaigns is growing every year.

Search and price-comparison engines play an important role in online campaigns, as they are a key performance channel, especially for unknown brands. They get relatively high, cheap and relevant traffic through them, as well as an additional channel where the target audience can get to know their brand.

Marketers, especially the major e-commerce players advertise their e-shops in the offline environment as well. In terms of turnover, TV is at the first place, followed by internet, print and radio (at a similar level). (Note: Internet spendings indicated in the graph include direct purchase only. Auction-bought online media are not monitored, so according to our estimates, real investments in internet advertising are approximately 5 times higher than that.)

AI is the next step 

What is the future of e-commerce in Slovakia? Major marketers are going to invest in technology. Artificial intelligence is going to play an important role to help optimize processes and increase marketing support and sales. What impact the overall macroeconomic situation will have on online commerce is yet to be seen.