Let’s Start

I spoke about the company, and listen—I don’t want to say too much, but there’s one thing that’s important: why can you believe these numbers and data more than others? Because you see so many other predictions, etc., etc. Why could we be a little bit better than the others?

Well, there’s an easy answer: there are basically three ways to do forecasts and explanations.

Way number one: ask consumers or ask stores, and they should tell you about what they’re planning, what they’re doing. That’s not a bad way.

Number two: you’re an analyst, you really know your market, and then you make certain assumptions—GDP growth, etc., etc.

What we do is totally different. We buy billions of transactions—credit card transactions, debit card transactions, bank transactions everywhere you go. For example, you go to bike24.de and buy something—that’s a transaction. We analyze these billions of transactions every day to determine how large companies’ markets are, etc. Therefore, we believe we are a little bit better than others. Of course, sorry for that.

Where Are We Heading?

There are three major topics.

I want to talk about the overall global market.
Then, I will go into the German market a little bit because I believe some of you are closer to the German market.
And third, I have something I love—and as I mentioned, I love data. There’s something I call the e-commerce revenue equation, and you will see extremely detailed data for two companies. They haven’t given us the data, but just to show what you can do with transaction data.

If you have any questions, I cannot see you properly because there’s so much light, but please ask either now or later.

The Global Market

You see these charts—they’re fine, they go up. What should you remember? And what is actually the good news?

Number one: How large is the physical e-commerce market? That’s something you should remember: $5 trillion USD. And to simplify, that’s roughly the GDP of Germany.

The good news is, contrary to Germany’s GDP, you see growth—and you see it in the future. And actually, what’s really good news—and let’s see if the pointer is working—is that the growth is increasing. That’s fantastic news because we all know, after COVID, we were all desperate. It was like, “Gosh, are we lost? Are we in an industry that’s not growing anymore? Where are we going?” Then you saw a little bit of hope, and last year, even more hope.

What I want to say—and I think this is the good news—is that 2025 is even more hopeful. And what’s the best example? If you’ve been to this exhibition or conference last year, you haven’t seen so many people. You see, really, this industry is booming again.

To put it in other numbers: here, we compare the development of GDP, consumer spending, overall retail revenue offline and online, and e-commerce. You see that 2022 and 2023 were difficult years, but again, the uptake is growing. E-commerce is becoming more relevant than all other channels combined.

That’s it for the big picture. But I don’t think so because, if you look at the bigger picture, the e-commerce market is still relatively small compared to retail overall. Categories like cars, for example—now, you might tell me, “That’s old news. No one believes anymore that the car industry will sell online.” I believe that’s wrong.

We’re going through a typical hype cycle. Two or three years ago, everyone said, “Oh, everyone will buy cars online.” Then they realized, of course, no one is selling cars online yet. But if you look at used cars, mobile phones, and brands—people buy online. Huge cars, and that will happen in the industry. The same applies to health, etc., which is digital e-commerce. More and more things are coming.

Yes, the 9% growth rate is lovely, but I believe it’s just the beginning.

Now, regarding all countries: there’s one country with the abbreviation DEU—I don’t know what it stands for, but it has a very low growth rate. Thank you. Then there’s the Netherlands, so we’re the second-worst in the line. But you really see that all other countries are growing—later I will show Mexico, Thailand, etc. You see the most growth there.

Sorry to explain the other axis: some countries have a very high online share—China or the US. There’s still more growth potential. No political statement here—just facts.

Market Shares and Sector Breakdown

Let’s go a little deeper.

Overall, I wanted to give you a feeling for the global e-commerce market. Here, we see the shares between China, the US, and other regions.

Whenever I see this chart, I think, “Oh, the data must be wrong.” No, please—sorry, it can’t be that the Chinese e-commerce market is twice as large as the US market. They must have missed something. No, we didn’t miss anything. We check it repeatedly. It’s really true: the Chinese e-commerce market is twice as large as the US market. The US market is 50% larger than the European market. That’s how it is.

Will there be more growth in the European market? Will we outgrow them? You already know the answer, but here it is in numbers: the growth rate of different continents from 2024 to 2028. All numbers are in USD—exchange rates are roughly 1:1, so it doesn’t matter much.

You see that all regions are growing, with more growth in other areas compared to the overall market.

Marketplaces vs Shops

Next, I want to show the typical share of marketplaces versus shops.

This slide can be misleading because it gives the impression that it’s all marketplaces. But why is it misleading? Because whenever you see “marketplaces,” they’re always counted as both first-party and third-party revenues.

For example, Zalando is also a shop, and that’s included in marketplace revenues. This has become a standard. Sometimes, we feel “Oh, marketplace, everything.” But in reality, marketplaces include shops as well. Just so you know—that’s the overall trend.

In Asia and South America, marketplaces dominate everything. In North America and Europe, it’s roughly 50/50.

Is there any development? Not much, but a little. For example, in the US, the top 10 marketplaces over three years: Amazon and Walmart will always be at the top, but in 2023, Temu and AliExpress are rising, and they already have a higher position in 2024. Even established markets are changing.

Sector Breakdown

May I ask: is it too fast if I go through the slides? Or is the speed okay? Good, thank you. Sorry for my German accent.

Number one: the typical structure of sectors. It’s very stable: fashion, electronics, hobby and leisure, groceries, etc.

By the way, a question: do you think Germany has the same sector structure? With all your prejudices about the German market, is there one sector larger? Answer this for yourself. Because in the next three slides, we’ll see if there’s one sector that’s larger in Germany.

There’s movement in the sectors. Last year, everyone talked about Chinese expansion, so I want to show what’s happening.

When we look at the fashion market, the players’ revenue development over time shows JD, Zalando, Walmart, etc. Surprisingly, Shein has grown very quickly and is now the largest fashion online retailer.

Now, let’s look at three different countries. You’ll see that the composition differs country by country. It’s not always fashion, electronics, and hobby. For example, in Germany, hobby and leisure is the second-largest category. In the UK, it’s much smaller.

What does this mean for you? Besides knowing the structure, if you’re in one of these sectors, you can either say, “Oh, another country where I can help expand,” or, “I want to go into a market where I can learn the most.” It’s interesting to see how differently they’re organized.

The German Market

Now, let’s focus on Germany. I think we’re doing fine in time.

Germany isn’t as aggressive as the global market, but the really good news is that growth is accelerating. We already have the bookings for January—seven days after the month ends—and it looks much better than January last year. That’s a major positive.

Next, a quick deep dive into Europe: the Netherlands and Germany are not growing as fast as other markets. Remember: Europe’s largest e-commerce market is the UK, with €5 trillion overall.

An outlier is Russia—can you believe it? Honestly, I don’t think Russia is growing that much online. Due to sanctions and the war, the growth rate is limited. But it’s not that small; the growth rate in Russia’s online sector is notable. Many things are happening there positively.

Looking at categories: fashion, hobby, groceries, etc. The largest is fashion, followed by hobby. Interestingly, groceries are very small in Germany—surprising, because companies like Lidl and Aldi are investing heavily. Grocery has the highest growth rate, which is exciting.

Now, a question: among the top 10 retailers in Germany, can you guess the first one? Of course, it’s Amazon. But can you guess if they are only foreign companies or if there are German ones?

Think about it. The answer: Amazon, then auto retailers (auto is currently shrinking), media companies, and three foreign ones. Overall, four are non-German, six are German.

Switching to marketplaces: where is the most growth? Not surprising—Timo, AliExpress. Others include Veepee in Germany. Marketplaces can be strong in one category or many.

The E-Commerce Revenue Equation

Overall, the market is doing well. What’s next? Sorry—I got excited with the data and jumped ahead.

I want to show you the e-commerce revenue equation. It’s simple:

Revenue = (Average Order Value after returns) × (Number of transactions)

Where:

Average Order Value after returns = total revenue divided by transactions, minus returns.
Transactions = number of buyers × purchase frequency.

This equation helps you understand how operational policies can impact revenue.

We applied this to Zalando and About You (which is merging with another company). Here are the numbers:

In Germany, in 2024, Zalando’s revenue is about three times that of About You.
The key difference: the average order value looks similar, but About You has a much higher return rate.
The active buyer base is similar, but About You’s buyers are more active.

Over time, Zalando focused on increasing net average order value, especially after 2022. About You had some issues, but managed to lower their return rate. This shows that policies can change outcomes significantly.

Next, we look at purchase frequency: how often buyers shop. It’s relatively stable but trending upward in both Zalando and About You from 2020 to 2024.

Acquiring new customers is expensive, so increasing purchase frequency is crucial.

Different markets show different behaviors. For example, in the UK and Germany, purchase frequency is higher than in newer markets.

Final Remarks

Sorry—I got carried away with the data.

Here’s the download code if you’re interested. When you turn off the lights and have your own light, we’re in a romantic moment now.

Q&A Section

Q: How might protectionism under Trump affect the e-commerce market?
A: Cross-border traffic from the US mainly goes to Mexico and Canada, not Europe. China’s cross-border trade is limited, mainly because most Chinese consumers buy within China. The impact of tariffs and protectionism will likely affect Europe more than the US or China.

Q: What about e-commerce in Ukraine or Moldova?
A: The reason is data availability. We need enough transaction data to project, and unfortunately, we lack sufficient data from those countries, so we left them out.

Q: Are you confident enough in your data to project for 2026–2027?
A: I was modest at the beginning, but now I am quite confident. I see data coming in for this year already. We publish long-term projections on our website—long-term growth trends are consistent. They’re not as reliable as the 2025 forecast, but they’re still useful.

Q: Insights into the health sector and online pharmacies?
A: In Germany, online pharmacies are growing steadily—around 6–8%. But what’s exciting is the boom in rapid delivery of medications, especially in countries like Brazil, where same-hour delivery is possible. This is crucial for urgent health needs—like heart medication. About 50% of online pharmacy customers are over 60, so this isn’t typical e-commerce. When you can deliver within an hour, it’s a game-changer. Online pharmacies are already growing, and with services like Uber Eats, this will further transform the health e-commerce landscape.

Closing Remarks

To conclude: remember, when you leave, think of the physical e-commerce market size—$5 trillion USD. The second key number: this market is growing at roughly 9.7%, or about 10%.

With that, I wish you a lovely coffee break.

Thank you very much.