{"id":9518,"date":"2024-02-27T07:30:55","date_gmt":"2024-02-27T06:30:55","guid":{"rendered":"https:\/\/eurotext.de\/en\/?p=9518"},"modified":"2024-09-30T08:48:14","modified_gmt":"2024-09-30T06:48:14","slug":"e-commerce-in-luxembourg","status":"publish","type":"post","link":"https:\/\/eurotext.de\/en\/blog\/e-commerce-in-luxembourg\/","title":{"rendered":"E-Commerce in Luxembourg"},"content":{"rendered":"

The Grand Duchy of Luxembourg<\/strong> may be tiny, but it\u2019s known globally for its economic clout: Luxembourg boasts the highest GDP per capita in the entire world. This economic strength makes it an attractive target market for e-commerce companies. With a well-developed infrastructure, an affluent population, and a thriving e-commerce culture Luxembourg is worth considering if your business wants to expand to new European markets.<\/p>\n

Figures & Facts<\/h2>\n

Luxembourg is home to just over 659,000 residents, making it the second smallest state in the European Union as of 2024. To put this in perspective, Luxembourg’s population is slightly larger than that of Venice, Italy. The country covers 2,586 square kilometers, making it roughly the same size as the greater Manchester urban area. This results in a population density of 254 inhabitants per square kilometer, which is comparable to Germany<\/a>. The employment rate in Luxembourg is excellent, and has been increasing steadily over the past few years.<\/p>\n

The largest city is the capital, also named Luxembourg, where\u00a0 140,000 people live \u2014 nearly 20% of the population. The northern part of the country, \u00d6sling, is more mountainous and sparsely populated. Luxembourg maintains close ties with its neighboring states of Belgium, France<\/a>, and Germany, forming the euroregion known as The Greater Region of SaarLorLux, or simply \u201cThe Greater Region\u201d. Luxembourg is also one of the three Benelux states.<\/p>\n

Luxembourg is a founding member of the European Union and was one of the first countries to adopt the euro in January 1999.\u00a0 It is part of the European single market, so there are no customs restrictions between it and the other EU member states.<\/p>\n

Internet usage and shopping<\/h2>\n

With a 99% internet penetration rate, Luxembourg ranks among the global leaders in internet usage. Furthermore, over 80% of Luxembourgers shop online, which is significantly above average. That number has been growing continuously for the last eleven years, and the total number of e-commerce shoppers in Luxembourg is expected to increase by 25% between 2024 and 2028.<\/p>\n

As a result, the e-commerce revenue in Luxembourg is significant despite its small population. It is forecasted to be worth US$1.4 billion by 2025, and moderate growth of around 10% is projected between 2022 and 2025.<\/p>\n

On average, the amount spent per year by each buyer on e-commerce purchases is expected to reach \u20ac2,156 by 2028, up from \u20ac1754 in 2021. Mobile shopping, in particular, is on the rise. Currently, nearly a quarter of purchases are made via smartphones or tablets, with double-digit growth expected to further increase this share in the coming years. This trend is facilitated by Luxembourg’s high smartphone penetration rate of 93%, with half of all mobile purchases already occurring within apps.<\/p>\n

Luxembourg is a small country that maintains close relations with its neighboring nations and faces few language barriers. Consequently, it’s unsurprising that Luxembourgers are very open to shopping on foreign websites: a whopping 96% of online buyers have made international purchases.<\/p>\n

In 2022, in fact, 86% of e-commerce spending in Luxembourg was done at foreign online shops. of the annual E-commerce volume crosses Luxembourg’s borders. This made them the EU country with the highest percentage of cross-border commerce. Luxembourgers are most likely to purchase from German online shops, but French and Belgian e-commerce sites are also popular. This is likely due to the fact there are relatively few native e-commerce shops in Luxembourg, while Germany has a wide range of online stores available.<\/p>\n

In addition, there is no dedicated Amazon website for Luxembourg, so many residents turn to the Amazon.de website. Other notable e-commerce retailers include the Luxembourgish branch of the hardware store Hornbach, hornbach.lu, the British clothing company next.lu, and the local electronics retailer hifi.lu.<\/p>\n

Localization<\/h2>\n

Due to its central location in Europe and diverse history, Luxembourg\u2019s linguistic landscape is complex. Most Luxembourgers are multilingual, often speaking four different languages! For administrative and judicial purposes, Luxembourgish, French, and German are used, while the German language dominates in print media.\u00a0 Interestingly, legislative documents are written exclusively in French.<\/p>\n

According to a study carried out by the Ministry of National Education, 98% of the Luxembourg population speaks French, 80% speaks English, and 78% speaks German. 77% of residents use Luxembourgish, which was for many years only a spoken dialect. However, it is now experiencing a revival thanks to its official status as a national language and the heavy use of social media and chats for communication. Luxembourgish has its roots in the German and French languages and sounds similar to Dutch<\/a> when spoken.<\/p>\n

Although Luxembourgish is commonly used in daily life, French remains the predominant language of business. This is true in the E-commerce landscape as well. Most companies in Luxembourg offer their websites in French, although many also have a language toggle for German and English. Therefore, it is not strictly necessary to translate <\/a>your website into Luxembourgish.<\/p>\n

In 2023, 47% of Luxembourg\u2019s residents were foreign nationals. The highest percentage of them came from Portugal, with around 91,000 Portuguese immigrants living in the country. France is the next most common country of origin, with 49,000 immigrants. As a result, Luxembourg has a significant Portuguese-speaking community with a Portuguese-language radio station and two Portuguese-language newspapers.<\/p>\n

Payment Methods and Shipping<\/h2>\n

The most popular e-commerce payment method in Luxembourg is online bank transfer, which accounts for nearly half of all purchases. Debit or credit card payments are also very popular: each Luxembourgish citizen possesses 1.79 debit cards and even 4.18 credit cards, on average. Digital payment solutions are becoming more common; the most popular digital payment solution overall is DigiCash by Payconiq.<\/p>\n

Although northern Luxembourg is very mountainous, the country boasts excellent infrastructure. In addition to several highways, it has a very good rail network, which has been completely free for passenger travel since 2020\u2014 as has all public transportation in the country. Luxembourg also enjoys good cross-border connections to Germany via car and rail. As a result, national delivery times are generally two to three days with Post Luxembourg.<\/p>\n

Post Luxembourg is the largest postal service provider in the country. It is publicly owned, although the company relinquished its state-guaranteed monopoly several years ago. Courier services such as FedEx and GLS also operate within Luxembourg.<\/p>\n

Industries<\/h2>\n

According to ECDB the most popular e-commerce sector in Luxembourg is Hobby & Leisure, accounting for 24.3% of Luxembourg’s e-commerce revenue. The next most popular sectors are: Electronics (22.4%), Fashion (18.7%), Furniture & Homeware (11.4%), Care Products (9.1%), DIY (8.8%), and Groceries (5.2%).<\/p>\n

Conclusion<\/h2>\n

It might be easy to overlook Luxembourg as a target market due to its small size, but there are many reasons to take a second look. One particularly strong argument is that Luxembourgers are more than ready to trust foreign e-commerce sellers, even those operating cross-border. The small contingent of Luxembourgish e-commerce shops also leaves plenty of room for newcomers who want to do business within the country. Moreover, Luxembourgers generally have high purchasing power and the e-commerce revenue generated in Luxembourg is significant. Finally, many European e-commerce retailers will already have their websites translated into one or more of the languages spoken there, so the effort required for website localization <\/a>will be minimal. All in all, Luxembourg is an appealing target market for EU retailers.<\/p>\n
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Sources<\/h2>\n