The impact of e-commerce on the German economy

Since the first products were sold online, e-commerce has been evolving rapidly in scope and coverage, becoming an increasingly important part of the economy growing at 14% annually within the last five years in Germany. 

The main conclusions of our study are:

• E-commerce has fundamentally changed the nature of the products being sold and the transactions taking place; what started largely as a business-to-consumer (B2C) model is now much more driven by business-to-business (B2B) transactions that generate three to four times larger online revenues in Germany today
• Online marketplaces, making up almost half of German B2C transactions, level the online playing field between SMEs and their larger counterparts; while larger online companies sold around 20% online, the smallest companies sold almost 30% through web shops and apps in 2018
• The development of e-commerce is creating economic value through the ability to tap into wider markets, which increases competition, scalability and specialisation options; It is estimated that productivity gains from e-commerce could amount to 0.15% of GDP
• Consumer welfare is increased by the access to a wider array of comparable products and new digital services being developed; the consumer welfare gains from e-commerce have been estimated to amount to 2-3% in Germany.
• The footprint of e-commerce extends throughout the value chain, corresponding to 2.9% of total German GDP with 1,260,000 people employed – in 2019, 15% of revenue in retail and wholesale sectors was generated through e-commerce
• Today, 87% of German consumers expect companies to have an online portal, while 67% of new start-ups operate through a purely digital business model, which represents a 5-percentage point increase compared to the previous year; all indicators suggest that the journey ahead for e-commerce will see continued growth in both scope and scale

Increased opportunities to create customer centric products and experiences through technology advancements are expected to take e-commerce up and beyond its current scope and scale in the years to come, where the online channel will shape our understanding of commerce further.

The study is commissioned by Bundesverband E-Commerce und Versandhandel (Bevh)