Purchasing power declines, European e-commerce shrinks 13% in the first quarter

According to foreign media reports, global e-commerce revenue fell by 3% in the first quarter of 2022 compared with the same period in 2021 , with a 13% drop in Europe alone . However, Spain's online sales increased by 6% year-on-year , making it the only country in Europe where e-commerce revenue increased in the first quarter .

According to customer relationship management company Salesforce, this phenomenon may be related to the current global inflation. Soaring inflation has led to a decline in consumers' purchasing power and a subsequent decline in their desire to buy, which has led to a decline in online spending. In addition, high fuel costs, raw material costs and the conflict between Russia and Ukraine are also driving this phenomenon.

Global e-commerce revenue fell 3%, while online traffic fell 2 percentage points and order volume fell 12%. European e-commerce data showed that European online sales fell in the first quarter of this year compared with the same period last year , and order volume fell 17%.

Previous survey data showed that global online sales growth has been slowing in previous quarters. However, this decline in online revenue is the first global decline in the Salesforce Q1 Shopping Index in nine years. This decline is in stark contrast to the 69% global online revenue growth in the first quarter of 2021.

Salesforce said that inflation has led to high consumption, and consumers are buying fewer goods from fewer retailers. And judging from the current situation, this phenomenon will continue, and consumer behavior will also undergo a major change.

Notably, online sales in Spain achieved an annual growth rate of 6% in the first quarter of this year . The country's e-commerce revenue grew 70% year-on-year in the first quarter of 2021. Although revenue growth is slowing, it was the only European market to grow in the first quarter.

The report also shows that flexible payment methods such as buy now, pay later are becoming increasingly popular. In the first quarter of this year, up to 9% of global online spending was made using BNPL ( buy now, pay later ) , an annual growth rate of 20%, and an increase of 9% compared to the fourth quarter of 2021.

BNPL accounted for 12% of all online spending in the UK in the first quarter , achieving an annual growth rate of 37%. The highest BNPL usage in the first quarter was in Germany, Belgium and the Netherlands , while France, Italy and Spain had the highest year-on-year growth in BNPL usage .

With reduced consumption desire and declining purchasing power, sellers of non-basic necessities may face some sales obstacles in the short term. Sellers need to pay close attention to market trends and make strategic decisions to cope with market changes .

Europe

First quarter