In conversation with Ms. Veronika Fischer, Senior Sales Manager at Seven Senders, Germany, we tried to understand the E-Commerce Logistics Market.
“Germany E-Commerce Logistics market is expected to grow at a single digit CAGR of around 4-7% for the next five years. Though the E-commerce industry saw a boom during the pandemic, the Russian-Ukraine war is expected to hit the industry and leave a long-term impact.”
Q1. How would you like to describe the E-Commerce Logistics Market in Germany?
Germany has a large number of players in the E-Commerce Logistics Market. The market is mildly consolidated due to the presence of major players i.e., DHL Parcels, DPD, GLS, Hermes & UPS occupying a major share of more than 75% in terms of annual orders.
Q2. What has been the impact of Covid-19 on E-Commerce Market in Germany?
While the pandemic led to sluggish retail sales due to lockdown measures, Germany experienced a boom in e-commerce and saw the biggest revenue growth in 2020 as more consumers shopped online. There was a drastic shift from Brick & Mortar to online shopping. A behavioral shift could be seen in consumers’ shopping preferences. Though the consumers started shopping more price sensitively because of the recession and loss of purchasing power, the e-commerce sector still managed to see a boom especially in the categories like Fitness (Home gym equipment), Recreational goods, Furnishings & Household Equipment, Grocery & Food.
Q3. What has been the impact of Covid-19 on E-Commerce Logistics Market in Germany?
The growth in the e-commerce logistics market during the pandemic can be concluded to be driven majorly by the ‘boom’ in the B2C E-Commerce Market (2020 & 2021). The pandemic has caused an increase in last-mile deliveries that are likely to persist. The average transit time also increased to some extent during the pandemic initially.
Q4. What is the percentage share split in terms of sourcing of E –Commerce orders by domestic and international shipments in CY’21?
The percentage share split in terms of sourcing of E –Commerce orders by domestic and international shipments in CY’21 can be approximately taken to be 60% and 40% respectively. Majority of the orders are domestically sourced.
Q5. What is the percentage share split in terms of Express and Standard Deliveries (E-Commerce) in CY’21?
In Germany, around 15-20% of the E-Commerce deliveries are Express while 75-80% account for Standard Deliveries. The demand for Express deliveries is quite low in Germany. Consumers generally don’t prefer paying extra for Express Deliveries. In the upcoming years, the share of Express deliveries might increase because with increasing purchasing power, consumers tend to have the capacity to readily pay extra for faster and efficient deliveries.
Q6. What percentage of orders from E –Commerce sites are being sourced via different modes of transportation (Air, Land & Sea)?
Within Germany, majority (around 90%) shipments are ground/land shipments whereas the rest (around 10%) account for Air shipments.
Q7. What is the approximate average order value (AOV) for e-commerce orders in Germany?
The Average order value in Germany ranges between 70-80 Euros. The major categories which are the most shopped for are Fashion & Clothing and Electronics.
Q8. Could you provide us with a fair idea of the percentages of return shipments and the trends observed over the years?
The return percentages of shipments vary from on product category to another. The returns are highest in the Fashion & Clothing category ranging from 50% to 60% whereas the lowest return rates can be observed in categories like Food & Beverages, Media and Toys ranging from around 3% to 5%. The returns have seen a decreasing trend. Initially the return rates were quite high since people were still adapting to the comparatively new concept of online shopping & ordering.
Q9. What is the approximate last mile shipment cost in Germany?
The last mile shipment cost in Germany ranges from 3 Euros to 5 Euros.
Q10. What is the current (& future) scenario of E-Commerce Logistics Market in Germany?
Though, the E-Commerce sales (market) and the E- Commerce Logistics market picked up quickly during 2019-2021 at the rate of 20-30% because of the Covid-19 Pandemic, the markets are expected to grow at an overall lower rate (single digit CAGR) of around 4-7%. This is because, firstly, the markets outperformed during the pandemic and secondly, the markets (E-commerce and E-commerce logistics) have been severely affected by the Russian-Ukraine war. The e- commerce sales have been hit hard by the war (except for essential goods) because of inflation. Moreover, people are saving up, and are preferring to invest (holding up investments) rather than spending.