'Club of Economics in Miskolc' TMP Vol.12., Nr.2, pp. 25-32 2016.
http://dx.doi.org/10.18096/TMP.2016.03.03
E-commerce in Hungary: A Market Analysis SZABOLCS NAGY, PH.D. ASSOCIATE PROFESSOR UNIVERSITY OF MISKOLC email:
[email protected]
SUMMARY E-commerce is on the rise in Hungary, with significantly growing numbers of customers shopping online. This paper aims to identify the direct and indirect drivers of the double-digit growth rate, including the related macroeconomic indicators and the Digital Economy and Society Index (DESI). Moreover, this study provides a deep insight into industry trends and outlooks, including high industry concentration and top industrial players. It also draws the profile of the typical online shopper and the dominant characteristics of online purchases. Development of e-commerce is robust, but there is still plenty of potential for growth and progress in Hungary. Keywords: e-commerce, market analysis, DESI, online shopping, online shopper, Hungary, retail Journal of Economic Literature (JEL) codes: M31, L81 DOI: http://dx.doi.org/10.18096/TMP.2016.03.03
INTRODUCTION With its 18% growth rate, e-commerce is the engine of growth for the whole retail sector in Hungary. Ecommerce growth rate has been fueled by improving economic conditions and by the increasing number of Hungarians shopping for goods and services online. This rapid growth has turned e-commerce into an attractive field of research in academia. However, to the best of my knowledge, a comprehensive, thorough analysis of the e-commerce industry in Hungary is not available in the literature. This paper aims to eliminate this deficiency by analyzing the direct and indirect drivers of e-commerce growth and giving deeper insight into industry trends and outlooks. It is inevitable that e-commerce plays a vital role in developing the economy. Anvari & Norouzi (2016) found that E-commerce and R&D are significant influencers of GDP (Gross Domestic Product) per capita based on purchasing power parity. However, ecommerce has a stronger development-enhancing impact compared to R&D. It is also confirmed in the literature that the Internet is the strongest growth engine of global trade nowadays (Gabrielsson & Gabrielsson 2011). Competitiveness and complexity in the retail industry are growing because of rapid technological changes and diffusion (Pantano et al. 2017). Falk and Hagsten (2015, p. 10) stated that “while engagement in e-sales is still not widespread, it is more frequently used by large firms, high-productivity firms, and firms
with international experience. The proportion of e-sales continues to grow over time from its low initial level. An increase in e-sales by one percentage point raises labour productivity growth by 0.3 percentage points over a two-year period”. Choshin & Ghaffari (2017)