Italy’s E-commerce Set to Soar

Despite the uncertainty surrounding the nation’s politics and economy, the e-commerce sector continues to grow, boosted by fashion.

MILAN — Despite the uncertainty surrounding the nation’s politics and economy, the e-commerce sector continues to grow, boosted by fashion.

E-commerce in Italy posted a 20 percent jump during the first nine months of 2011, to 8.15 billion euros, or $11 billion at current exchange, it was reported at a conference organized by Netcomm, the Italian Consortium for Electronic Commerce, in collaboration with the Politecnico di Milano’s management school.

“Even if we are still far from the numbers registered in other European and international countries, the Italian market is growing twice as fast,” said Alessandro Perego, director of B2c Netcomm-Politecnico di Milano Observatory.

According to Netcomm’s monthly monitoring of the online buyer’s satisfaction index, 9.2 million Italians made online purchases in October, and about 87 percent of them rated the service with a score above 7, on a scale from zero to 10.

In addition, research conducted by credit card company CartaSi revealed that Italian online customers will spend about 1,050 euros, or $1,429, each by the end of the year, a 9 percent increase over 2010. CartaSi also estimated that 32 billion orders are going to be finalized this year.

Driving the growth is fashion, which recorded an increase of 38 percent, thanks to the strong performance of online retailer Yoox.com, which closed the first quarter with net profits of $1 million, and flash-sales sites, including Privalia, Saldiprivati.com and BuyVIP.

“In one week we have recently recorded the total sales of 2008,” said Privalia Italy’s country manager Valentina Visconti. “Our business model is winning because we guarantee our members a different offer for each country where we operate, along with transparency of transactions, good prices and more than 100 new products every day.”

Italian fashion, which derives 50 percent of its online sales abroad, also represents the most important sector for the country’s e-commerce exports, which climbed 32 percent to 1.4 billion euros, or $1.9 billion.

“Italian fashion retailers are very good in promoting their products on the international markets,” commented Christina Lundari, industry leader at Google Italy. “In particular, the growth is led by players offering the best value for money.”

“Guaranteeing good prices on the Web, companies shouldn’t be worried about losing their margins, but they should consider it a strategy to secure a long-lasting relationship with shoppers,” added Netcomm president Roberto Liscia.

Martin Gill, principal analyst at Forrester, showed the results of research focused on online customers’ behavior, which forecast that more than 14 million Italians will be shopping online by 2015, with the entire sector registering turnover of more than 5 billion euros, or $6.8 billion, a year.

While fashion in Italy represents an important category for e-commerce business, Gill highlighted that in Europe the clothing sector is even stronger online.

According to the research, 60 percent of Italian customers don’t buy online because they want to see the clothes in advance, while in the U.K., France and Germany, people pay attention to other aspects, including safe payments, deals and shipping costs.

“It’s evident that in Italy companies should embrace different strategies to convince people to buy online, showing how products work and what they look like,” said Gill.

Forrester’s data also marked the increased relevance of mobile commerce, which is currently used by 8 percent of European customers and which is expected to become a mainstream phenomenon by 2015.

“Europeans use their mobiles more to support their off-line shopping journey, compared with Chinese and American people, who use them to directly make their purchases,” Gill noted. “In Italy this trend is particularly strong, so it’s extremely important to use mobile technologies in a more rounded way.”

In line with this strategy, social networks represent fundamental instruments to get in touch with shoppers via mobiles, in particular in Italy where, according to the research, people are particularly engaged in social networks.

“Analyzing the Europeans’ behavior on social networks, it emerged that Italians are more creative and conversationalists than British people, who are more critical and more used to sharing comments, then uploading contents,” Gill said. “Eleven percent of Italian social networks’ users interact with brands, so it’s becoming crucial for retailers to engage these people because they can influence their friends and followers.”

Additionally, in order to transform the flow of shoppers online into sales, Gill underlined the importance of connecting social networks with e-stores. An example was the mobile version of French Connection’s Web site. Videos show models wearing pieces from the brand’s collections, which can be clicked and immediately purchased on the online store.

In this context, the pivotal role played by payment systems is evident. These “must be safe and easy to use,” said Marco Loro, head of e-commerce at Italian bank Banca Sella.

In particular, the attention is focused on remote and proximity mobile payments. A remote mobile payment is when shoppers finalize a transaction from their phones, while proximity mobile payments use contactless near-field communications to allow customers to make purchases in a store through their mobile devices. Shoppers can just hold their phones close to a reader and the total amount is deducted from a pre-paid, mobile or bank account.