Research - JUNE 1, 2017

Online sales in Europe reach €500b

by Released

Online sales in Europe are growing rapidly and reached nearly €500 billion ($560 billion) in 2016, representing 14 percent of total retail sales, according to BNP Paribas Real Estate.

This share is expected to be close to 18 percent at the end of 2018. From 2010 to 2016, the annual average growth rate of European online sales stood at 16 percent compared to 0.5 percent for global retail sales.

In Western Europe, the United Kingdom is by far the country where customers are the most active in e-commerce: one-third of U.K. retail sales are made on the Internet. Others countries are lower, at 11 percent in Belgium, 13 percent in Germany, 15 percent in France and 21 percent in the Netherlands.

Countries in Southern and Eastern Europe are where shoppers buy the least on the Internet. Online sales account for a small share of total retail sales but they have been recording high annual growth rates, with Italy up 18 percent in 2016).

The expansion of online retail across Europe is causing a rethink of many logistics networks as e-tailers seek to distinguish themselves through increasingly rapid delivery.

In its European Outlook report, Savills Investment Management highlights urban logistics as one of its preferred European investment sectors, especially in markets where Internet sales as a proportion of total retail sales are at, or about to exceed, the 5 percent threshold.

In its analysis, Savills forecasts millions more square feet of logistics space will be needed to service the growth in demand over the next five years.

Also, European consumers are becoming accustomed to one-day delivery. The impact of technology combined with changing consumer habits means that increasing amounts of warehouse space is required across Europe, according to Savills’ Megatrends Logistics report.

And the global industrial and logistics real estate sector appears to have reached a mature state in the current economic cycle, according to CBRE’s 2017 Real Estate Market Outlook report. CBRE believes the industrial sector is uniquely positioned to benefit from structural changes, such as online retailing, which have forced a transformation of global supply chains and will continue to act as a significant engine for growth.

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