Italy - eCommerceItaly - eCommerce
The European Union’s Digital Single Market Initiative
Creating a Digital Single Market (DSM) is one of the ten priorities of the European Commission (EC). The overall objective is to bring down barriers, regulatory or otherwise, and to unlock online opportunities in Europe, from e-commerce to e-government. By doing so, the EU hopes to do away with the current fragmented national markets and create one borderless market with harmonized legislation and rules for the benefit of businesses and consumers alike throughout Europe.
The EC set out its vision in its May 6, 2015 DSM Strategy which has been followed by a number of concrete legislative proposals and policy actions. They are broad reaching and include reforming e-commerce sector, VAT, copyright, audio-visual media services, consumer protection, and telecommunications laws. New legislation has already been finalized on portability of online content and geo-blocking. Many DSM proposals are still going through the legislative process. DSM-related legislation will have a broad impact on U.S. companies doing business in Europe.
In addition, a new data protection legislation, the General Data Protection Regulation (GDPR) entered into force on 25 May 2018 (see separate section in this report).
The three main pillars of the strategy are:
Pillar I: Better access for consumers and businesses to digital goods and services across Europe
- Better access for consumers and businesses to online goods and services across Europe
- Remove key differences between the online and offline worlds to break down barriers to cross-border online activity.
Pillar II: Shaping the right environment for digital networks and services to flourish
- Achieve high-speed, secure and trustworthy infrastructures and content services
- Set the right regulatory conditions for innovation, investment, fair competition and a level playing field.
Pillar III: Creating a European Digital Economy and society with growth potential
- Invest in technologies such as cloud computing and Big Data, and in research and innovation to boost industrial competitiveness and skills
- Increase interoperability and standardization
Digital Single Market
The Electronic Commerce Directive (2000/31/EC) provides rules for online services in the EU. It requires providers to abide by rules in the country where they are established (country of origin). Online providers must respect consumer protection rules such as indicating contact details on their website, clearly identifying advertising and protecting against spam. The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content.
Comprehensive Market Research on e-commerce in the EU is available upon request.
Key Link: eCommerce
Italian E-commerce market overview
E-commerce in Italy is developing rapidly and has registered annual two-digit growth over the past six years. Although the Italian digital economy lags behind other major European countries, e-commerce is poised to continue its upward trend in the next years, with Business-to-Consumer (B2C), Business-to-Business (B2B), and Consumer-to-Consumer (C2C) transactions all posting solid growth. The turnover from e-commerce in Italy was estimated at $32.4 billion USD in 2018, totaling a 15% growth over 2017. The sales of goods and products online are estimated to increase by 25% in 2018 for a total market value of $18 billion, while services sold online will grow by a factor of 6%.
Current Market Trends
The number of Italian web shoppers is constantly increasing. 6.5% of all retail sales in Italy in 2018 are expected to be completed online, up from 5.6% in 2017. Sales are increasingly being conducted from mobile devices, which now account for roughly 30% of all digital sales. The main factors fueling the growth of e-commerce in Italy will continue to be improved Internet access infrastructure and wider availability of broadband connection; a mobile and smartphone diffusion among the highest in the world, which will enable both the business and consumer segments to take advantage of new technologies for e-commerce transactions; recognition of e-commerce as a means to provide cheaper products and better support to customers and suppliers; improved transaction security; and Italian legislation which recognizes the legal validity of digital signatures and digital contracts.
Domestic e-commerce (B2C)
The B2C e-commerce market in Italy generated $30.9 billion in 2018, an increase of 8% over 2017. The number of Italian web shoppers is constantly increasing, with 89% of the Italian population online. Despite the positive trends, in absolute terms the Italian B2C e-commerce market was still only worth one sixth of the market in the United Kingdom and one third of the German and French market in 2017. The number of repeat shoppers (at least one purchase per month) is 11.1 million, with an average annual expenditure of $1,650 per transaction per person.
For the first-time sales of goods and products (56%) has surpassed those of services (44%). In terms of products purchased online, information technology and consumer electronics dominate with a 25% market share an 18% growth rate, followed by clothing (8% market share and 21% growth) and publishing (13% market share and 25% growth). Emerging sectors include food & grocery, furniture/home decor, beauty and toys, all categories growing between 30%-50%. With regards to services bought online, tourism is still the most popular e-commerce category in Italy (32% of the market value and a 5% annual growth), followed by insurance services (6%).
In 2018 Milan Polytechnic University estimates that the total sales from Italian websites worldwide will total $29.5 billion. Of these total sales originating from .it domains, 85% will be sold domestically while 15% will be sold to foreign customers. On the other hand, Italian imports of foreign goods and services online are expected to grow to a total estimate of $7.7 billion.
According to Postnord’s 2018 E-commerce in Europe Report, the most popular foreign e-shops used by Italian customers are primarily located in the United Kingdom (19%), China (18%), and Germany (16%).
In terms of e-commerce sales, the presence of Italian companies in foreign markets is currently more significant within the European Union. 20% of Italian companies sell online in France, 18% in Germany and 15% in the United Kingdom. As far as extra EU countries are concerned, 10% of Italian companies sell to the United States, 8% to Asian countries (2% to China, 2% to Japan, and 4 % to other Asian markets), and 3% to South America.
Outside of the EU, the first market target for Italian companies is the United States (35%), followed by China (16%), other Asian markets (11%), and Japan (7%). The total volume of sales from Italian websites to Italian and foreign customers grew by 20% and reached $19.3 billion in 2016. In fact, 29% of overall online sales from Italian companies were generated abroad, with a 2% growth over 2015. However, for Italian companies with foreign subsidiaries or members of international groups, the percentage was much higher at 44%. For Italian companies selling abroad only via website, the turnover share originated from sales abroad was higher for companies with multilingual websites (32%), while it was considerably lower for those companies operating through websites only written in Italian (12%).
ECommerce transactions amongst businesses and between central and local government account for $372 billion in 2016 with a 19% increase in value from 2015. Although the amount is considerable, it only accounts for 14% of all B2B transactions in Italy.
Despite its rising trend, digitalization rates among Italian firms is quite low, and the majority of small- and medium-sized companies are far from embracing a digital transformation process which would improve and cut the costs of B2B relations. In 2016, 50% of ecommerce B2B transactions were between producers and resellers. About 120,000 companies used B2B tools in 2016 (EDI – Electronic Data Interchange, Extranet, and B2B Portals) in their relationships with clients and suppliers. 250 eProcurement platforms are used in Italy by large enterprises to manage the electronic orders of clients and suppliers.
In addition, the obligation of delivering electronic invoices to the Italian Public Administration (PA) has resulted in a push towards digitalization for both private and State-owned companies.
The most common B2B e-commerce model is e-business, which entails the digitalization of corporate processes in conjunction with clients and suppliers (supplier selection, management of customer orders, after-sale services, etc.). In addition, over the last few years web portals for B2B e-commerce (like e-commerce B2C models) have become increasingly popular, as well as B2B Marketplaces.
B2B e-commerce applications and e-procurement are registering continued growth. The most active players implementing B2B solutions are in the automotive, pharmaceutical, consumer goods, electronics and consumer electronics sectors. Specialized B2B applications in key “Made in Italy” sectors are also gaining momentum; there is an estimated 350 B2B platforms across different industries. Virtually all major Italian industrial groups utilize e-procurement and forecasts indicate that in the next few years up to 80% of all company purchases will be online.
The need for the Italian public sector to improve efficiency is driving the growth of e-procurement and significant developments are occurring in this field. To rationalize expenditures for goods and services, both the central and local Italian government offices utilize the Italian Public Administration eMarketplace (MEPA), an e-procurement platform managed by Consip SpA, the Italian Central Purchasing body, 100 % owned by the Italian Ministry of Economy and Finance (MEF) through its division “Acquisti in Rete PA” (Public Procurement Online). MEPA connects Italian public bodies to thousands of suppliers throughout Italy.
The public sector utilizes e-sourcing to purchase information technology equipment and office supplies, furniture, uniforms, personal safety devices, vehicles and supplies for healthcare. Electronic procurement of services is also growing, particularly in the areas of energy (fuel, electric power), printing services, vehicle rental, cleaning services and financial services.
For purchases with a value above the mandatory EU publication threshold, government bodies issue public tenders open to both domestic and foreign companies. Announcements of tenders on public procurements are monitored by the U.S. Mission to the European Union and can be accessed through the webpage: http://export.gov/europeanunion/grantstendersandfinancing/index.asp
In terms of B2C retailing platforms, international players have a strong influence on the Italian eCommerce market. Other popular eCommerce websites in Italy include: Subito.it, Aliexpress.com, Zalando.it, Autoscout24.it, Groupon.it, Yoox, and Pixmania. Furthermore, Banzai Srl, Italy’s leading e-commerce operator controls ePrice.it and Saldiprivati.it.
Many companies in Italy offer successful omnichannel digital solutions and international eCommerce sites which are multilingual, multi-currency, multi-collection and multi-brand. These types of businesses support brands in managing all aspects of their own e-stores, including retail strategy, activity planning, communication, web marketing, store management, customer care, invoicing, and payment collection. These channels offer opportunities for U.S. small- and medium-sized companies interested in selling to the Italian market.
Popular eCommerce Sites
Popular marketplaces, offering products in a wide variety of categories, including: www.amazon.it, www.ebay.it, www.mediashopping.it, www.aliexpress.it, www.subito.it, www.dmail.it,
In addition, there are a range of online marketplaces specialized by sector. The following list is a selection and is not meant to be comprehensive.
Travel and tourism: www.edreams.it, www.expedia.it, www.it.lastminute.com, www.trenitalia.com, www.italotreno.it, www.volagratis.it, www.tripadvisor.it, www.opodo.it, www.kayak.it , www.skyscanner.com, www.trivago.it www.booking.com
Information technology and consumer electronics: www.eprice.it, www.euronics.it, www.monclick.it, www.mrprice.it, www.mediaworld.it, www.unieuro.com, and www.trony.it
Fashion: www.yoox.com, www.zalando.it, www.saldiprivati.com, www.privalia.com www.vente-privee.com,
Books, music and video: www.amazon.it, www.ibs.it, www.unilibro.it and www.lafeltrinelli.it
Couponing: www.groupon.it, www.groupalia.it are among the most important sites.
In addition to these marketplaces -- mostly B2C -- there are many B2B marketplaces and virtual malls specialized by industrial sector.
Acquisti in Rete – AiR (“Public Procurement Online”) -- The AiR portal provides access to a fully functional e-procurement platform https://www.acquistinretepa.it/opencms/opencms/menu_livello_I/header/Inglese/PROGRAM
Netcomm -- Italian E-Commerce Consortium http://www.consorzionetcomm.it/
Most Popular Search Engines
Google is the most popular search engine, primarily the Italian version (www.google.it), but also in its .com version in English. The other most popular search engines are www.yahoo.it, www.virgilio.it, www.libero.it http://it.msn.com www.bing.com and www.tiscali.it.
U.S. companies can contact each search engine to submit their sites for listing free of charge, but can also subscribe to special advertising services for a fee. U.S. companies may also hire local firms specialized in "web positioning" and search engine marketing services for website optimization. Although not required, it is advisable for any U.S. company that wishes to rank high on a local search engine to translate into Italian at least keywords and some text.
Italian consumers have grown used to a slow and at times unreliable domestic postal service, though the increase of eCommerce is raising demands and expectations on speed and quality of service. While the range of delivery options available to online shoppers is expanding, with lockers and collection/return points rolling out across major cities in the past two years, these are still in their infancy, and 90 percent of online purchases (including digital products) are delivered to an address supplied by the shopper, typically their home or office. As the eCommerce market develops, so too do the options for alternative delivery points or timed slots. It is always advisable to offer tracking for more valuable goods.
U.S. SMEs can take advantage of many express delivery options when shipping goods to Italy. Global logistics companies such as Fedex, UPS, DHL, TNT and others guarantee a second business day delivery to Europe from mainland U.S. To date the B2C delivery has been dominated by national postal service Poste Italiane and local couriers SDA and Bartolini.
Most logistics companies will offer a range of options for international delivery, at different price points to meet customer needs. These usually feature different levels of tracking and insurance. Parcels can be delivered in person to the recipient, a neighbor or to mail boxes. Logistics companies can also help with bulk deliveries into the market to help cut costs, and advise on packaging, address formats and labelling.
Italian consumers will search for the cheapest possible prices. When domestic retailers offer speedy delivery, it may be worth exploring domestic fulfilment options to be competitive. Logistics companies either run their own fulfilment centers or can recommend reliable local fulfilment partners.
The use of credit cards in Italy lags behind the United States and some European countries, due to security concerns among Italian users. Nonetheless, in 2018 PayPal was the main method of payment for eCommerce transactions with an estimated share of 56% of overall payments, followed by debit or credit card (32%), cash-on-delivery (7%), other payment method (2%) and direct bank transfer (2%). Other digital and mobile payment platforms are growing in Italy and most of the large digital wallets are now available. These include Amazon Pay, Alipay from Alibaba, Apple Pay and Samsung Pay.
Experts predict that the transposition of the EU Directives on Payment Services (PSD) and on Electronic Money into national legislation will further propel the development of these services in the market. Italian legislation fully complies with EU consumer protection directives regarding the specific information that e-commerce sites must provide, and sets rigid privacy protection requirements for the opening of e-commerce sites, including encryption, firewalls, secure protocols and digital certificates. Italian legislation recognizes the legal validity of digital signatures and digital contracts.
According to a study by Milan Polytechnic University, one of the most notable factors driving market development is the exponential growth of mobile commerce, which now accounts for 31% of all online B2c sales. Mobile phone penetration in Italy is among the highest in the world, with 36 million users, 30+ million smartphones and close to 8+ million tablets. Social networking in Italy is also very widespread and 28 million Italians are active social media subscribers with 22 million active mobile accounts. Around 26 million Italians are active Facebook subscribers and increasing using smartphones and tablets to take advantage of exclusive offers presented to them through social media.
In 2018 smartphone commerce sales are expected to account for the 31% of total online sales for Italian companies and sales from tablets should reach 7%. Italian companies are starting to invest more in mobile versions of e-commerce websites and apps, with 57% of Italian companies foreseeing investments in mobile commerce in 2018.
Italian companies have been rather slow to adopt online brand promotion. In 2018, over 50% of Italian companies surveyed found online promotion to be a challenge, and 14% considered it to be ineffective. Less than a third of overall companies (31%) were reportedly satisfied with their online branding activities. However, Italian companies must invest in digital marketing if they want to compete with large international ecommerce players. More Italian firms are investing in keyword advertising, social media marketing, search engine optimization and e-mail marketing. According to the 2018 E-Commerce Report, investment trends in the coming years will be mainly focused on marketing and promotion, followed by investments aimed at improving the user experience for websites and apps. Important investments will be aimed at improving companies’ technological infrastructures, foreign sales, and mobile e-commerce.
Major Buying Holidays
Italian e-commerce websites set up special sales for traditional holydays and celebrations, such as Christmas, Easter, and St. Valentine’s Day. The Christmas season is the major buying holiday in Italy, when e-commerce websites track record sales. Over the last few years, Italian physical and online shops have adopted Black Friday and Cyber Monday promotions, generally with successful public responses. In 2018 the Florence-based luxury outlet Luisaviaroma.com registered record sales in Italy, as well as in the U.K., China, and Germany. Moreover, during seasonal sales (July-September and January-March) e-commerce websites are launching competitive sales campaign, usually offering higher discounts than those in physical stores.
Over the last decade, the advent of social media has influenced online marketing strategies, with social networks playing a critical role. In the first quarter of 2018, Facebook dominated the sector, with 71% of Italian companies considering it the most effective social network for online purchasing. Instagram is the second most popular social media, used by 49% of Italian companies, followed by YouTube (35%), LinkedIn (19%), Twitter (13%) and Google Plus (13%). Of these platforms, Instagram is growing the fastest and is currently the most effective media for influencer marketing in Italy with an estimated 14 million users. During the first quarter of 2018, 25% of Italian companies were satisfied with their ROI for social media investments, 50% had difficulties evaluating the impact of social media on their profits, and 25% stated that social media have a negative impact on their sales.
Value Added Tax (VAT)
The EU’s VAT system is semi-harmonized. While the guidelines are set out at the EU level, the implementation of VAT policy is the prerogative of Member States. The EU VAT Directive allows Member States to apply a minimum 15 percent VAT rate. However, they may apply reduced rates for specific goods and services or temporary derogations. Therefore, the examination of VAT rates by Member State is strongly recommended. These and other rules are laid out in the VAT Directive.
The EU applies Value Added Tax (VAT) to sales by non-EU based companies of Electronically Supplied Services (ESS) to EU-based non-business customers. U.S. companies that are covered by the rule must collect and submit VAT to EU tax authorities. From 1 January 2015, all supplies of telecommunications, broadcasting and electronic services are taxable at the place where the customer resides. In the case of businesses this means either the country where it is registered or the country where it has fixed premises receiving the service. In the case of consumers, it is where they are registered, have their permanent address, or usually live.
As part of the legislative changes of 2015, the Commission launched the Mini One Stop Shop (MOSS) scheme, the use of which is optional. It is meant to facilitate the sales of ESS from taxable to non-taxable persons (B2C) located in Member States in which the sellers do not have an establishment to account for the VAT.
This plan allows taxable persons (sellers) to avoid registering in each Member State of consumption. A taxable person who is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) can electronically submit quarterly Mini One Stop Shop VAT returns detailing supplies of ESS to non-taxable persons in other Member States (the Member State(s) of consumption), along with the VAT due.
The Commission has received numerous complaints in relation to the new rules on ESS and is in the process of revising them (draft proposal).
The most important pieces of legislation on VAT are the EU VAT Directive 2006/112/EC and its Implementing Regulation 282/2011.
Further information relating to VAT on ESS:
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