The evolution towards internet shopping was accelerated by the pandemic but not all countries developed equally in this regard. Also, different generations are acting in their own ways when it comes to what they buy online.
In the context of the current narrative related to a possible slowdown in the global and local economies, it is important to understand how buyers are changing their purchasing habits, writes eToro analyst for Romania, Bogdan Maioreanu in a commentary.
Romania had the lowest online shopping percentage in Europe in 2012. Only 11% of the population that accessed the internet in the past 12 months has made at least one online purchase in that year according to Eurostat.
Despite the increase of online shopping during the pandemic, in 2022 we are still at the back of the charts with 51%, behind us being only Turkey with 50%, Bulgaria with 49% and Montenegro with 31%. The Nordics are dominating this ranking, Netherlands and Norway being in first place with 92%, followed by Denmark. Despite its low ranking, Romania had one of the largest leaps in Europe in the past 10 years, growing by 41%, above us being only Hungary with a 43% growth and Estonia with 47%.
E-commerce in the EU was boosted by the demand of the age group of 25-34 years in 2022 As 87 % of individuals in this age group bought or ordered goods or services online in 2022.
Tech savvy and connected, this age category is a big part of the “Millenials” group. For all age categories the number one online purchase in 2022 was clothing, including shoes and accessories. While for the people with ages between 16 and 54 years the second most ordered category was food delivery for the over 55 years old it was furniture, home accessories or gardening products. While in third place for those below 55 were cosmetics, for the over 55s there were medicines and printed magazines or books.
For investors, how people are spending their money can be a factor in choosing a company over another. A recent GWI study is showing that Millennials are prioritizing purchases from brands that are reliable, innovative, smart and authentic. They want brands that listen to customer feedback, be socially responsible and be eco-friendly.
Also, when it comes to dealing with financial strain, 42% of Millennials expect to spend less on luxuries. That includes the likes of sunglasses, jewellery, or wristwatches – all products that fewer consumers are purchasing year over year. Also, 38% say they will cut spending on nights out and eating out and 26% on travel costs and clothing while 24% will cut spending on vacations. One in five (20%) are looking to cut beauty-related costs and the same amount will cut expenses with gifts for other people.
But cutting spending sometimes is a difficult task, especially in social circumstances. A study conducted on behalf of Intuit Credit Karma, shows that more than one-third of US Gen Z and Millennials (36%) have a friend who drives them to overspend. This is leading many to take on debt and in some cases, end friendships to protect their finances. This could explain why young folks are now seeking out friends who earn as much as them. According to the study, 35% of Gen Z respondents say it’s important that their friends earn as much as them, along with 29% of millennials.
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