Would you be attracted to do e-commerce and online marketing in a European country with only 4,2 Million citizens? What about if we told you that 20% of this country enterprises are active in the e-commerce industry? The percentage in the EU is 17% and in Italy is 7%, just to compare. We say it is a strong argument to analyze the online business potential from Croatia, the country from our story. An interesting market where almost one-third of the population bought something online last year. But what do they buy online and which are the earning opportunities?
Let’s start with the market figures, we really should follow them. In 2014, the B2C e-commerce market from Croatia reached 280 Million EUR in turnover, according to an Ecommerce Europe report. More than the markets from Iceland, Bulgaria or Slovenia.
To find out more about the players from the Croatian market, we should check some statistics discovered by the SMind in the latest Digital Agenda Scoreboard research by the European Commission. Among large companies (250 and more employees) there is a higher proportion of e-commerce in the manufacturing sector: in the EU, the average amounts to 40%, while the proportion is one-third in Croatia. When we look at companies that sell services, one in five small enterprises do this online in Croatia, whereas in EU the percent is 18%. Ok, but which are the opportunities brought by this data?
We spoke with Marcel Majsan (President) and Dino Oreški (General Secretary), two of the founders of the eCommerce Hrvatska Association, a recent initiative started in order to sustain the e-commerce market development. And we find out really valuable insights about a market full of perspectives. ECommerce Hrvatska is the main partner of 2Performant in Croatia .
How can you describe the Croatian e-commerce market in 3 relevant words?
Marcel Majsan: Croatians-buy-abroad :). According to Eurostat, 31 % of us bought something online last year, but more than 76 % ordered something outside from other countries. Which is understandable if you take a look at a Gemius research, which concluded that the most popular web shop in Croatia is not from Croatia. It is Ebay.
Which are the most appealing product categories for the Croatian online customers?
Marcel Majsan: According to a Gemius research, these 5 are most popular categories for online shoppers in Croatia:
- Clothing and apparel.
- Movie/theater tickets.
- Smartphones & tablets & gadgets.
- Travel & booking.
- PC equipment.
Which are the criteria that influence the most the online buying decision: price, brand, promotions, product quality, the free delivery etc.?
Marcel Majsan: Delivery costs, the price of goods and time of delivery. But we also noticed that Croatians like to do research online and buy offline. Meaning, we are still very connected to brick&mortar stores, which could be a sign of insufficient trust in online stores.
It seems that 76% of the Croatian online buyers prefer to shop abroad (source). How can you explain this behavior?
Marcel Majsan: Could be trust issues or it could be the price issue. China has free deliveries so that could also be a big factor. But for many people that order from Amazon or Ebay, I believe motivation is pretty straightforward – they order what they cannot find in the Croatian stores.
Which are the most used marketing channels by the Croatian e-commerce companies? Which are the most effective, from your knowledge?
Marcel Majsan: AdWords, Facebook and PR. Adwords is the best for the pull strategy and Facebook is great at push. But I think many underestimate e-mail campaigns, which in my experience have far better conversion rates than any other methods. But you have to invest time and effort in it, so not many people do it the right way.
Which are the most reliable growth opportunities for an e-commerce business in Croatia?
Marcel Majsan: We would like to see more sellers integrate additional payment methods. In Croatia, we have around 1000 registered sellers that offer credit card payment, but not many of them offer Paypal. Also, according to the Gemius research, many buyers (more than 40%) would like to pay by SMS but we don’t have many web shops that offer this option. Maybe it’s because of big fees, which are prescribed by Telekom providers. Also, big steps must be made regarding more efficient (live) tracking of packages and same day delivery options.
Tell us which are the biggest challenges for an e-commerce business who wants to develop in Croatia and Serbia?
Marcel Majsan: You would think that it should be how to grow your business, but it turns out that the biggest challenge for our web store owners is the law. There are over 50 laws that we are obliged to follow if we want to open e-commerce store, and that scares our entrepreneurs. That’s why eCommerce Hrvatska Association offers free legal advice for our members, with the support of an e-commerce specialised lawyer.
Which are the advantages of being a member of eCommerce Hrvatska?
Marcel Majsan: The biggest advantage is that you will contribute to a great cause – growing e-commerce business in Croatia. Also, you will get free legal advice, discounts from our partners and access to hidden sections of our web service (in development). That means you can easily connect with other partners, get new leads, publish job openings or find quality employees. Also, you will always be up to date with e-commerce related news.
Which are your main plans and objectives for this year?
Marcel Majsan: Our main objective is to establish a relevant Trustmark, which will help in raising the trust in e-commerce stores. We plan to accomplish that by partnering with sMind.hr, part of Ceneje group from Slovenia, who already work with emota.eu on this goal. Also, they are organizers of an international event „Web Seller of the year”, so we are confident in their experience in this field.
2 things an e-commerce business must do starting tomorrow in order 2perform in Croatia (in marketing, business)?
Marcel Majsan: They have to join eCommerce Hrvatska Association and they have to invest in people. If you don’t have professionals working for you, all your other investments will fail. And eventually, your business will fail. Message for all SMB web store owners around the world: Please stop making delivery guys handle your PR and online marketing. If you can’t afford experienced professionals, hire people that are highly motivated and they will become professionals eventually.
Thanks, Marcel Majsan and Dino Oreški, good luck with the association. If you are interested in the Croatian market, you should follow their Facebook group.