Rise in Consumer Confidence Fuels Online Shopping Growth in Europe – Novinite.com – Sofia News Agency

Consumer confidence is rebounding in Europe, leading to a surge in online shopping this year, according to Ecommerce Europe, as reported by Reuters. This resurgence is partly attributed to increased competition from budget-friendly online marketplaces like PDD Holdings’ Temu, which are appealing to cost-conscious shoppers.

Globally, inflation has affected consumers’ purchasing power, encouraging growth in online platforms that offer affordable products. In the US, lower-income households, defined as those with annual incomes of 50,000 dollars or less, have increased their online spending more than other demographic groups, as highlighted in a study by Bank of America. This trend suggests heightened price competition in the online retail space, particularly during the critical holiday shopping season.

E-commerce revenue in Europe is projected to reach 958 billion dollars this year, up from 887 billion dollars in 2023. This represents an 8% increase, or 5% when adjusted for inflation, according to the report covering 38 countries, including the UK. If realized, this will mark the first annual growth in e-commerce turnover since 2021, following a period when rising prices led consumers to purchase less and opt for cheaper alternatives.

Anton Delbarre, chief economist at retail trade association EuroCommerce, commented that while consumer confidence has not fully returned to pre-crisis levels, it is nearing a “new normal” that is slightly more pessimistic than before.

However, executives from e-commerce associations in Denmark, Finland, and Germany express concerns over the competitive threat posed by Chinese platforms like Temu, which offers items such as 10 euro hiking boots and 15 euro smartwatches. Martin Groß-Albenhausen, deputy managing director of the German e-commerce association BEVH, noted that German consumers are increasingly opting for inexpensive Chinese products.

Niels Ralund, head of e-commerce at the Danish Chamber of Commerce, claimed that companies like Temu create unfair competition by operating within the European Union without following the same regulations that local online retailers must adhere to. In response, a spokesperson for Temu stated that the company prioritizes compliance with local laws and is committed to supporting local businesses by inviting merchants from the UK, Germany, France, Italy, and Spain to join its platform.