The Czech Republic is situated in Central Europe, although many people think of it as a part of “Eastern Europe” because it was part of the Eastern Bloc before the fall of the iron curtain. With its rapidly growing economy and relatively compact size, it makes an interesting target market for expanding e-commerce businesses.
Facts & Numbers
The Czech Republic has about 10.7 million inhabitants, an average-sized country by European standards. The land area is approximately 78,866 square kilometers, and the population density is roughly 135 people per square kilometer. The largest city in the country is Prague, which has over 1.3 million inhabitants.
In 2021, 89% of Czech households had broadband internet, which is around average for a European country. Current e-commerce penetration is somewhat lower than average, however, with only around 68.5% of internet users making an online purchase in 2021. Nonetheless, this is a significant increase over previous years: in 2019, only 39% of internet users had made an online purchase, and in 2020 the number was 65%.
What’s more, total e-commerce turnover in the Czech Republic has increased rapidly in recent years. The total turnover of e-commerce in Czechia reached 9.17 billion EUR in 2021, which is more than six times higher than the turnover in 2010. Czech shoppers spent around 737 EUR per year on online purchases, which is only about one-third of the European average.
Czech online shoppers are more likely to be women than men, and Czechs in the age group 25-34 are most likely to shop online. Approximately two-thirds of the age group 18-34 years old shops online, while only 8% of the Czechs over age 65 do so.
The stark differences in online shopping among different age groups likely explains the high proportion of e-commerce purchases made on mobile devices — over 54%, which is truly impressive considering that the smartphone penetration rate is only 67%. If your business wants to target a younger target audience, you should definitely make sure that you have a mobile-optimized e-commerce website and/or app for your business.
Czech Shoppers and Foreign Businesses
It’s also worth noting that Czechs seldom purchase from foreign websites. Only 26% of the population had made a cross-border purchase from an EU seller in 2021, while only 14% had purchases from non-EU sellers. The most popular e-commerce websites in the Czech Republic are Alza.cz, which accounts for more than 20% of all Czech e-commerce purchases, followed by Mall.cz and CZC.cz. All of these sellers offer electronics and a wide selection of other products. Amazon does not yet offer an Amazon.cz website; only a Czech translation of the German Amazon.de is available.
That’s not to say that Czechs avoid all companies that are based in other EU countries. With the right website localization and logistics setup, foreign companies can definitely succeed on the Czech market. A perfect example of this is the German supermarket chain Lidl, which has successfully operated the website lidl-shop.cz since 2017. The website focuses on household items and clothing and boasts 115 million EUR in turnover, making it the fifth-largest e-commerce company in the Czech Republic. It has its own logistics center in the Czech city of Pilsen, which is located relatively near to the German border.
Thus, one could argue that the low number of purchases from foreign companies is not due to a reluctance to buy foreign products, but due to low engagement of foreign e-commerce companies in reaching the Czech market. This argument is bolstered by the fact that Czechs generally view German products in a good light and often drive to Germany for the purpose of shopping. Lidl’s success shows that companies based in the EU do indeed have a good chance of success if they make an effort to give their Czech customers an excellent shopping experience.
Localization for E-commerce
The official language in the Czech Republic is Czech. While many Czechs also speak English, German or Russian, a website that is localized for the Czech market is far more inviting and makes a more trustworthy impression.
Czechia has been part of the European Union since 2004, which means that there are no customs fees or controls for inner-EU shipments. However, the country has kept its own currency, the Czech koruna (or crown), which is abbreviated CZK. A single koruna is divided into 100 heller; however, the coins are gradually being removed from circulation and retail prices are typically listed in whole koruna. Although some Czech banks offer consumers EUR-based accounts, consumers are not accustomed to paying for e-commerce purchases in EUR.
To make a more trustworthy impression, your e-commerce business should consider adding the APEK Trustmark to their website. This trustmark is issued by the national e-commerce association. This trustmark certifies that sellers meet certain standards, for example in terms of transparency and quality.
Clothing sizes in the Czech Republic are equivalent to EU clothing sizes, so no special localization is required.
Special sales days are the same as those found in many EU countries. For example, Christmas and the now-ubiquitous Black Friday sales have become standard in the Czech e-commerce world.
Payments and Shipping
A few years ago, it was still common for Czech online shoppers to pay with cash – in 45% of the transactions, the customers chose to pay via cash on delivery. That number has decreased to only 15% in 2018 and 9% in 2021. Cash on delivery has now traded places with credit card payments, which accounted for 45% of online purchases in 2021. Payment by bank transfer has also been decreasing over the past few years, dropping from 29% of payments a few years ago to 22% in 2018, and only 15% in 2021. Payment in installments is virtually never used by Czech shoppers.
Czechia is a small country with good delivery infrastructure. The cross-border roads from Prague to Dresden and Nürnberg, in particular, have been expanded in the past few years. That means that deliveries can reach Prague and other cities in the Czech Republic quite efficiently — even cities in the eastern part of the country.
However, it’s worth noting that Czech consumers expect next-day delivery at no additional charge. That can be a challenge for businesses without a warehouse or physical store in the country. 70% of sellers have their shipments delivered by Česká Pošta, the state-owned postal service. PPL (a DHL partner) and DPD are competitors.
The most important market segments for Czech e-commerce are electronics, fashion and sports. These are followed by travel, homeware, and food.
Expansion to the Czech Republic offers e-commerce businesses the chance to access new markets with a relatively low barrier to entry. As a small country located in central Europe, near major economic players like Germany, Czechia offers many advantages for businesses looking to expand their reach. The only real hurdle is the language — it’s definitely advisable to have your website localized for the Czech market. Once the localization is complete, the Czech Republic can easily serve as a springboard for expansion to additional countries in central and eastern Europe.