In 2024 the growth of Hungarian e-commerce is already driven by import

Guest writer:
Norbert Madar
lead manager
(Digital Commerce)
PwC Magyarország

When we talk about the “Hungarian e-commerce market”, it is important to add what we mean by “market”. A few years back the Hungarian e-commerce market consisted almost exclusively of EU traders (with a Hungarian leg and often a local team) operating in Hungary or considering Hungary as a strategic market. For a long time international online retailers were only a relevant source of supply for a small group of buyers.

However, foreign shopping has now become a competitive alternative to domestic retailers in terms of customer experience, speed and service levels, and this is further reinforced by the substantial price advantage of Chinese e-shops. For e-commerce retailers operating in Hungary, a 6.4% growth was observed in the first half of 2024, with gross sales around HUF 671bn.

Dynamically growing online FMCG sector

Online it was the FMCG sector that continued to produce the highest growth (23%). However, this expansion is no longer only because of the inflation, but also due to an increase in the number of transactions and a rise in order frequency. The growth of the online FMCG segment is driven by the increasing frequency of online purchases of food and household goods by the consumer group that is already buying online, i.e. the number of traditional in-store purchases is decreasing, while the number and basket value of orders shifting online is growing dynamically. It was in the autumn of 2024 that TEMU appeared in Hungary, upsetting the balance of power that had prevailed until then. TEMU didn’t trigger cross-border shopping and the rise of import e-commerce, but it did take the process to a new level and accelerated it very much. By the first half of 2024 TEMU’s active customer base had reached nearly 1.5 million and it was shipping more than 800,000 parcels per month in Hungary, totalling around 4 million orders.

Allegro, one of Europe’s biggest online retailers is coming to Hungary

The 4 million or so orders placed by Hungarian customers on TEMU in the first half of 2024 aren’t only missing from the domestic e-commerce market in terms of order volume, but also in terms of value. Taking into account the difference between domestic and Chinese prices, this missing domestic sales could be even higher than TEMU’s HUF 50bn sales in the first half of the year. Some categories are particularly negatively affected, e.g. fashion, DIY, home decoration, miscellaneous small items, technical accessories. The key to TEMU’s success is that it hasn’t only attracted shoppers, but also increased their frequency of purchase. There is an equally damaging but less noticeable trend: the proliferation of regional retailers based in other EU countries. The current situation is further complicated by the fact that Allegro, one of the largest online marketplaces in Eastern Europe, is expected to make its Hungarian debut in the autumn of 2024. Allegro.hu will offer products from more than 150,000 retailers, and the company aims to launch in Hungary before the Christmas season. //