Bulgarian e-Commerce market: Huge potential for development, green consumerism & eco-friendly practices.

Interview with Janet Naidenova, Chairperson of Bulgarian E-commerce Association

A few numbers on the Bulgarian e-commerce market: 

E-commerce in Bulgaria continues to develop at a rapid pace, and for 2021 the market of goods and services sold online to end customers (B2C e-commerce) has grown by 29%, and for 2022, according to the European E-commerce Report, it is already with a growth of 31%. The market reaches values of 1.250 billion euros for 2021, and for 2022 this volume is already 1.640 billion euros. The annual online shopping budget of a Bulgarian is 555 euros.

The Pandemic period & the e-commerce market in Bulgaria: growth in online shopping & buying habits.

The impact of COVID on e-commerce has been determined by consumers and their changed habits выгодные займы на карту круглосуточно. . During the pandemic, there was much less demand for clothes, shoes, auto parts, plane tickets, hotel reservations, travel packages, services from service-based sectors.

The demand for certain categories of products has increased sharply and the traffic to the respective online stores has also increased. The most purchased products online in the pandemic year were related to quality living in homes, much of which has become a place to study, work and play. E-commerce saw impressive growth in the categories of electronics (laptops, tablets, printers, webcams), entertainment (consoles, video games, books, children’s toys), home and decor, sports and fitness, health and personal care, products for the kitchen, household supplies and cleaning agents, food products.

During the pandemic, many new consumers learned to shop online, convinced themselves of the convenience and advantages of this way of shopping. The change in daily life, work and study habits due to the pandemic has brought about a number of changes in consumer habits that are emerging as long-lasting trends. In the first place among them are the increased requirements for the overall shopping experience, from easy navigation, through the variety of products, price and discounts, to the process of ordering, delivery and return. Consumers want and expect all of this to happen quickly, easily and accessible from the mobile phone screen to the desktop monitor.

Strong growth over the last decade has accelerated with the Covid-19 pandemic with many more users joining the Internet for the first time: 47% of Internet users in Bulgaria shop online in 2021, compared to 42% in 2020 and 31% in 2019. We expect this trend to continue, as experienced consumers see the benefits of online sales and expect a seamless experience, including a combination of online and offline shopping interactions.

International context & the impact on the Bulgarian e-Commerce sector.

The ongoing war in Ukraine is undoubtedly having an impact on markets across Europe including Bulgarian market as well.  This affects the whole economy, including e-commerce: rising prices of electricity, oil, gas, rising inflation. There is uncertainty about tomorrow. Consumers are more careful in their spending and there is already less demand for certain product groups.

Forecast for 2023 & the impact of the economic context on the Bulgarian e-Commerce market

Economic expansion is expected to slow down in 2023. Price increases and higher borrowing costs are set to weigh on household consumption. With inflation gradually slowing down, GDP growth is projected to accelerate from 1.1% in 2023.

Against the background of these macroeconomic forecasts, the forecasts for the development of B2C e-commerce in Bulgaria are to slow down the growth rate, but to continue to grow and develop.

Black Friday in Bulgaria – then and now

Last couple of years Black Friday is the most effective campaign for online shops and platforms and it becomes a practice in Bulgaria. Every year Black Friday sales are going bigger and bigger and online shops starts preparation earlier. This year we could not see discounts of 50%, 60%, 70% etc. as last years due to the Omnibus Directive but we see the real discounts on the lowest prices of products and services for the last 30 days before Black Friday.

The consumer behaviour in Bulgaria – past, present & future

A major factor driving green consumerism is the emergence of Millennials as a stable group of shoppers interested in environmentally friendly products. This demand for green products is driving e-commerce companies to adopt eco-friendly practices.

There is a change in e-commerce payment methods and this trend will continue: the share of cash on delivery payments is decreasing from 70% a year earlier to 60% in 2021, the share of card payments is increasing from 25% to 32%, the share of bank and mobile payments also increased from 5% to 8%. It is expected that the share of card payments and mobile payments in Bulgaria will continue to grow in the coming years.

Particularity of the Bulgarian digital shopping market compared with European ecommerce market: in the next 3-5 years will have a huge potential for development

Currently, the ratio of the volume of B2C e-commerce in Bulgaria to the country’s gross domestic product /e-GDP/ is 2.14%. In Europe, the e-GDP parameter averages between 4% – 5%. In Estonia e-GDP is 8.22%, in Greece 8.02%, in Romania 2.56%. Forecasts indicate that the Bulgarian online market in the next 3-5 years will have a huge potential for development.

The TOP 10 Bulgarian online stores collectively make up 20.48% of the volume of the entire B2C market in Bulgaria for 2021, which shows that the future of e-commerce is not in the many niche online stores, but in the large platforms.

The biggest challenges of the Bulgarian e-commerce industry: delivery & climate change

Between 7 and 20 percent of orders are unsolicited or with the wrong address. And that generates costs. A large number of e-shops offer their customers to try on the purchased clothes or shoes in the comfort of their home, not in the courier’s office. And if for some reason their expectations are different, to return the goods within 30 days. The money is returned as soon as the items are delivered to the courier, or no later than 10 days after the return of the goods – depending on the conditions of the merchant. In this way, e-shops strive to reduce the % of returned orders and the negative effect on the environment.

Climate change is one of the biggest challenges we face today, and like all other industries, e-commerce plays a role. The good news is that small changes can lead to big results. We believe it is important to promote sensible and sustainable consumer behaviour. Encouraging sensible and sustainable consumer behaviour in online shopping can be not only a truly enjoyable experience, but also environmentally friendly. Going green affects online sales. Many consumers report being influenced by environmental concerns when making a purchase decision. There are many examples of socially responsible brands in Bulgaria with care for nature among the members of the Bulgarian E-commerce Association (BEA).

What is the Bulgarian E-Commerce Association – its role & projects  

The major priorities of BEA as an e-commerce association moving forward into 2023 are:

• Lobbying for better and desirable industry policies through co-operation with state authorities in the development of laws & regulations for implementation of e-commerce;
• Round tables with institutions;
• Surveys and researches about Bulgarian e-commerce market published yearly in Passport of Bulgarian e-commerce market;
• Implementing Trustmark for e-shops of Bulgarian e-commerce market;
• Helping SMEs to obtain digital skills through series of education courses together with Universities and business partners in order to be able to be part of Competitive Digital Single Market;
• Sharing good e-commerce practices.