The Best European Markets for E-Commerce Expansion

In short: Germany, the UK, France, the Netherlands and Spain are well-established e-commerce markets for expansion. Poland, Sweden, Italy and Belgium have more untapped potential. Wherever you go, you need to adapt to local laws, payment habits, logistics, culture and language.

The European e-commerce market is full of opportunity, variety and potential for businesses that want to expand. Europe has a varied consumer base, advanced tech and strong economic indicators. That makes it fertile ground for online sellers. There are e-commerce opportunities all over Europe. But in this article, we focus on the top places to expand your e-commerce business.

How fast is e-commerce growing in Europe?

New technology and changing shopper habits have driven huge e-commerce growth in recent years. Nowhere is this clearer than in Europe. More and more European shoppers buy online. They like the convenience, the choice and the good prices. As a result, e-commerce revenue in Europe is now forecast to reach US$813.20 billion by 2029.  Related reading: Why Europe Should Be Your Next Big E-Commerce Move.

Which European markets are best for e-commerce expansion?

E-commerce is growing all over Europe. But if you want to expand into a market that is already well established, these countries are good options:

Germany

Germany is the economic giant of Europe, with a strong and stable economy. German shoppers are known to value quality, efficiency and reliability when they buy online. The market is highly competitive. So you need to offer top customer service and high-quality products. Germany's advanced logistics and infrastructure make it an ideal base for e-commerce. From there, it is easy to ship across Europe.

Population: 83.2 million  

Projected market volume by 2028: US$143,503.1 million

United Kingdom

The UK's e-commerce market is one of the most mature in Europe. British shoppers are used to buying online, so the UK is an attractive market for online sellers. It also helps that people there speak English. That makes marketing and customer service simpler for international businesses. However, to deal with the post-Brexit landscape, you need a good grasp of the new rules and trade deals.

Population: 67.8 million

Projected market volume by 2028: US$217,520.8 million

France

France is the third largest e-commerce market in Europe, after the UK and Germany. That makes it a key place to expand your business. Its e-commerce sector has strong digital infrastructure. It also has wealthy shoppers with a growing appetite for buying online. French shoppers value luxury and high-quality products. This creates openings for niche and premium brands.  Read more in our guide: E-Commerce Ireland: The Perfect Market for Your Amazon Expansion.

Population: 64.8 million

Projected market volume by 2028: US$90,784.4 million

Netherlands

The Netherlands is a hub for international trade, thanks to its location and excellent logistics network. Dutch shoppers are highly connected and happy to pay online. That makes the Netherlands an appealing market for online retailers. The country is small and has efficient delivery channels. So it is easy to scale up your e-commerce business there.

Population: 17.6 million

Projected market volume by 2028: US$29,616.5 million

Spain

Spain's e-commerce market has grown a lot. More people are online, and shoppers feel more confident buying online. The Spanish market has openings for online sellers in several areas, including fashion, home goods and electronics. To win in this growing market, you need to understand the culture and shopping habits of Spanish shoppers.

Population: 47.4 million

Projected market volume by 2028: US$48,955.1 million

Which emerging e-commerce markets should you consider?

If you want to expand into an e-commerce market with plenty of untapped potential, consider these countries:

Poland

Poland's economy is growing fast, and more people are getting online. That makes it an attractive market for online sellers. Polish shoppers are keen to shop online. This gives international sellers a fairly untapped market. If you enter Poland, you can benefit from its large, young and tech-savvy population.

Population: 40.2 million

Projected market volume by 2028: US$44,532.8 million

Sweden

Sweden stands out for its high standard of living, tech skills and focus on sustainability. Swedish shoppers put ethical and eco-friendly products first. This creates openings for brands that share these values. Sweden's e-commerce market is mature. To win over picky Swedish shoppers, you need fresh, high-quality products. For a full country overview, see our Sweden VAT manual.

Population: 10.6 million

Projected market volume by 2028: US$18,683.8 million

Italy

Italy is going through a digital rebirth. More people are online, and digital skills are growing. The Italian market is ready for e-commerce growth, mainly in fashion, luxury goods and gourmet food. To succeed in Italy, you need to understand the country's rich culture and what its shoppers like.

Population: 58.6 million

Projected market volume by 2028: US$56,495 million

Belgium

Belgium's e-commerce sector has a multilingual population with high spending power. The country’s location makes it an ideal gateway to other European markets. If you sell online in Belgium, you need to handle its many languages. That means offering local content in Dutch, French and German.

Population: 11.7 million

Projected market volume by 2028: US$9,467.4 million

What should you consider before expanding?

Europe's e-commerce landscape is lively but complex. Legal, cultural and economic factors differ from place to place. You must understand these details to succeed and last in the European market. Below, we look at each of these key factors in more detail.

What legal and regulatory rules apply?

Europe's laws and rules are detailed and differ between member states. So you need a good grasp of local laws and EU-wide directives. Key areas to focus on include:

• Data protection: The General Data Protection Regulation (GDPR) sets strict rules on data privacy and protection. It affects how you collect, store and process customer data.
• Consumer rights: The EU Consumer Rights Directive sets out specific protections for online shoppers. These include the right to clear information, a 14-day withdrawal period for online purchases and protection against unfair terms.
• E-commerce regulations: You must comply with the E-commerce Directive. It covers areas like electronic contracts and the liability of online service providers.
• Taxation and VAT: You need to understand the VAT rules for e-commerce sales. This includes the OSS (One-Stop-Shop) scheme, which makes VAT simpler for cross-border sales.

How do people prefer to pay?

Payment habits vary a lot across Europe. The payment methods available include:

• Credit and debit cards: Cards are popular in many countries, but use varies. Not all European shoppers like to use them online.
• E-wallets: Digital wallets like PayPal, Apple Pay and local versions are more and more common. They are handy and secure.
• Bank transfers: In some countries, such as Germany and the Netherlands, shoppers like direct bank transfers (e.g., iDEAL). They see them as safe and simple.
• Cash on delivery: This is still common in Eastern European countries. Offering it can boost shopper trust and the number of completed orders.

If you understand these payment methods and add them to your e-commerce platform, you can greatly boost customer satisfaction and sales.

What logistics hurdles will you face?

How well your logistics and delivery network works affects whether you can meet customers' hopes for fast, reliable delivery. Points to consider include:

• Delivery infrastructure: Check the delivery set-up and services in your target markets, so you can ship quickly and at low cost.
• Returns management: A simple, hassle-free returns process is key to happy, loyal customers. It needs efficient reverse logistics.
• Cross-border challenges: You need to handle customs, duties and cross-border shipping rules to run smoothly in markets outside your home country.

How do culture and language differ?

Europe's variety extends to its cultures and languages. This affects how people shop, how you market and how you serve customers:

• Language localization: Offering your e-commerce site in the local language(s) can greatly improve the user experience and engagement.
• Cultural sensitivity: Knowing local customs and tastes helps you tailor your marketing and products.
• Customer service: Offer customer support in the local language. Think about what people expect from service and communication there. This builds trust and loyalty.

How should you tailor your business model?

To deal with these factors, you need to tailor your business model to the European e-commerce market. This involves:

• Adapting product offerings: Match your product range to local demand and tastes.
• Localized marketing: Create marketing campaigns that speak to local audiences and respect cultural norms and values.
• Strategic partnerships: Working with local partners can give you useful insights. It can also give you access to established delivery and marketing networks.

Summary

Expanding your e-commerce business into Europe offers a world of opportunities. Choose your target markets with care and understand the local details. Use the right technology and strategies. Then your business can thrive in Europe's fast-moving e-commerce landscape. For a closer look, see Get Ready for the E-commerce Berlin Expo 2024!.

Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.

How Taxually handles this

Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.

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