We’ll help you to localise your digital marketing strategy for the Czech market. Tell us about your export business goals and we’ll give you a hand in market sizing, digital marketing cost estimation, business plan validation and an action plan for achieving success in the Czech market.
Czechia
as your next market for growthGrow your business in Czechia
Expand beyond borders and your expectations. Make your mark on a tough-to-win market, enter a gateway to both East and West!
With the highest number of online stores per capita, hard to please customers and thick competition, why would anyone bother entering the Czech e-commerce market? Actually, if you’re committed to growing, this is the right question you want to be asking yourself: why would anyone not? If you are serious about making it in CEE, the Czech Republic is your flagship market. It’s sort of like that famous New York song: “if you make it here, you can make it anywhere.” Within the Czech market lies understanding to the CEE as well as having a clear passage to Germany and onward: not to mention hard-to-ignore profits, network and visibility (Czech e-commerce players love to get together, and they create numerous events for you to shine on)!
Country in a snapshot
Ever heard of the red ocean and blue ocean strategy categorization? From this angle, Czechia would be a big red dot in the very centre of European map: overly saturated market, undergoing consolidation in high-competition segments such as electro, hard to please customers and incredibly high standard for delivery and customer service. On the flip side, recent success of fashion or grocery disruptors proves that innovative thinking, taking into consideration millenial and Gen Z’s growing need for sustainability and convenience as well as throughout market research can make you find big blue holes in that red sea!
Bohemian by default (one of the two main regions in the Czech Republic is called Bohemia), Czechs binge in humor, beer (world´s #1 in per-capita beer consumption for 26 consecutive years!) and weekend getaways. They are also avid gardeners, fond pet-owners and serious bikers. Did you know they gave the world the word robot, are mostly atheist or rank 7th on the Global Peace Index, making Czechia 7th safest country in the world? They are smart and one of a kind. Once you get them, you have loyal friends for lifetime.
So lets get some friends here!
Czechia’s potential for online business growth
On the graph you can see the relative change of Google ads cost and CPC of e‑commerce players.
E-commerce growth, leaders and trends
The Czech e-commerce, arguably the strongest in CEE, grows at approximately 10% to maximum 15% annually. In 2020, the market revenue reached as high as 7,5 billion EUR, which is 26% growth compared to 2019. E-commerce now takes up 16% of retail (13% before pandemic). So although a popular opinion is that the market is already saturated, there’s still a number of opportunities to grow. First, investors are highly interested in the e-commerce space. Second, foreign players such as About You (fashion) or Wolt (food delivery) prove that if you’re a disruptor, you can come and quickly win or even turn the market on its head. Third, there’s no dominant marketplaces like Amazon or eMAG, yet.
Czechia has the largest number of online stores per capita, currently over 40 000. According to CzechCrunch, 2020 saw the birth of 8000 of them. High “red ocean” competition type of market is something you want to have associated with this country. Did you know the 100 biggest stores now generate 80-90% of e-commerce revenue? Consolidation is in full force in Czechia, forcing all players to constantly step to match the ambitious competition.
Historically, electro has been the strongest segment and although fashion is now number one in terms of supply (19%), electro has higher average basket sizes. Czechs are weirdly obsessed with gardening, so no surprise home and gardening comes high in popularity (13%), followed by groceries (8%) and family or kids (6%). As per what product is sold in largest quantities, phones are number one, gadgets second and outdoor swimming pools third (!) – a testament to how serious Czechs are about their garden experience.
The top 10 consists of marketplaces, as well as electronics shops, pharmacies and sportswear brands, and somehow accurately reflect the taste and lifestyle of Czech’s. Number one is Alza.cz with 15 million visits monthly and 37,3 bn CZK in revenue (1,42 billion EUR). Founded in Prague, it now successfully operates as number 1 in Slovakia and number 4 in Hungary. Second and third place may seem like a tie in terms of traffic: 6,2 million for Mall.cz, 5,8 million for CZC.cz, but both companies have different visions and messaging. Mall.cz runs as a marketplace as well as a seller, has its own paywall Mallpay as well as its own TV and much more. Eletro mega store CZC.cz (no typo, this really is the name) is positioning itself as the people’s choice: your normal next-door neighbour rather than the shiny “expensive” industry leader, a distinguisher that quite resonates with sarcastic Czechs. Fourth most visited is Aukro (5,3 million visits), followed by Lidl-shop, Datart, Bonprix and PostovneZdarma.cz (a store with one non-negotiable: all listed products have free shipping). Pharmaceutical DrMax with 1,9 million visits and sportswear Decathlon with 1,5 million close the top 10.
In terms of revenue, the 5 biggest players are (again): Alza, Mall and Czc.cz, as well as Rohlik.cz and Lidl-shop.cz. According to Statista, these five accounted for 48% of the net sales of the top 100 online stores in 2019 and have only strengthened their position in 2020.
Other players worth mentioning are Notino, Vivantis, Bonami and the top three in fashion: About You, Zalando, Sportisimo. Honestly, there are many more worth highlighting, as Czech e-commerce market really is the one to watch in Europe, but for the sake of space, let’s stick with these guys (and girls!). But look – why don’t you let us know your favourite brands when we talk in person?
8 880 000
Number of online shoppers
84%
Online shoppers compared to population
43000
Number of shops
€8.02bn
E‑commerce revenue (2022)
-12%
E‑commerce growth
Customers
There are over 6,8 million Czechs shopping online and 73% user penetration. Most frequent online shoppers stem from the millennial generation, aged 25-34, who also make mobile shopping more prevalent each year (55%). Smartphones are e-commerce’s best friends in terms of browsing as well as completing a purchase. Czechs also frequently shop abroad, especially in China, Germany, UK and USA.
There are several aspects that make a typical Czech customer tick – and it will hardly surprise you that all of them revolve around quality, price and convenience. One prevalent tendency is looking for the best price: Czech search for products on comparison prices or using Google Shopping to find inspiration, compare options and yes, also look for the best price. But price hunting is not typically the goal in and of itself (in fact, Czech often directly looks for cheaper alternatives on foreign markets, namely in China), other factors play a role in decision-making. For Czechs, quality of delivery is crucial: fast, reliable, and flexible. This means offering a huge variety of pick-up and delivery options: think Zasilkovna or other pick-up partners, as well as listing a variety of couriers, and a free pickup in every showroom you have. When locals don’t find several pick-up stores closeby their home (or work) to choose from, they likely go shop elsewhere.
High expectations apply to other delivery aspects, from same day or next day delivery to quality of packaging (including growing interest in eco packaging and sustainable transport) to a series of automated emails about the current state of their order. This is a norm when it comes to B2C communication. Czechs automatically find a store matching up to these norms trustworthy, without needing to google the actual premises like showroom, office or even a phone number. They expect both the shop and the courier to keep them up to date until the package lands safely in their hands. Any gap in communication or hiccups in the actual delivery process can be a reason to choose from a sea of other options the next time.
Most of the country is used to waiting 2-3 days to get their orders delivered (shorter when it comes to groceries), while customers in Prague consider the same day, or at least next day delivery a standard. Leaders such as Rohlik and Alza (with Alza drive-in) helped raise that bar. The pandemic also reinforced the need for speed, as digitally non-native segments of the population are impatient to wait 3 days for something they were used to getting from the shop right away. Apart from speed, having products in stock is another important variable. similarly to neighboring Slovakia, 30% of customers would rather leave the site if they didn’t see their product in stock or available in the next couple of days.
Speaking of delivery time, another trend visible on the Czech market – online stores are coming up with their own delivery fleet. Not only big players like Mall Group and Rohlik but strong local brands know that having their own fleet increases their flexibility and performance in logistics, while also increasing trustworthiness from end customers.
How to get their attention:
Ecosystem
Logistics. A central position between strong markets such as Germany, Poland, Austria, but also nearby Hungary, means the country pretty much plays a key role in European logistics. Transport is well-functioning in the Czech Republic, a significant variable to Czech e-commerce growth. Pioneers such as Zasilkovna, Rohlik or Dodo proved that things can work both in cities and villages, especially post-2020, which made traditional players such as the Czech Post or couriers like PPL, DPD (the three most popular in the CZ), DHL, GLS or UPS really up their game. Interestingly, Zasilkovna (33%) has outran the Czech Post (26%) in terms of parcel amounts shipped. No wonder it’s owner, Packeta Group, doubled its revenue in 2020: it leads both Czech B2C e-commerce as well as re-commerce (P2P).
Legislation / administration.Administration and red tape is a bit more relaxed here (compared to Hungary, for instance). Make sure you´re following the laws and the tax best practices, and local authorities let you live freely. Also: first invoices in an Excel sheet should not be a problem. VAT registration is compulsory after hitting 1,000,000 CZK (38,200 EUR) in 12 consecutive months. The standard VAT is 21%, reduced 15% rate applies on transfer of certain residential houses, on certain foods, gas, waterway, accommodation, air transport of passengers or cultural activities. There’s reduced 10% VAT on pharmaceuticals used for health care, nappies, printed books and periodicals.
Payment methods is another field that has undergone shifts and changes in 2020. Pre-covid, cash on delivery was decreasing yet still quite popular, whereas now less than 15% pay with the actual cash (the predominant narrative in the pandemic is to maximize contactless delivery). Over 40% opt for a card payment, 18% uses bank transfers, 7% card on delivery and 11% card or cash at the store. Similarly, mobile shopping experienced a significant boost. Czech online stores report almost the same turnover from mobile (47%) as they do from desktop (49%).
Delivery. An increasing usage of pick-up points is noticeable all across the Czech Republic, not only in big cities. Zásilkovna, WeDo, PPL and other services have turned brick and mortar shops into pick-up points (before Christmas 2020, 45% of Czechs preferred this delivery method, according to APEK e-commerce chamber). Furthermore, pick-up boxes built by Alza, Mall and Zasilkovna are populating every corner of big cities, as well as targeting villages. Opened 24/7, accessible by phone and some of them working on sustainable, solar energy, they are here to stay. With that said, traditional home delivery by Czech post (remains popular out of habit) or DPD and PPL with extended evening delivery is still used, especially when unprecedented amounts of population work from home.
Candid insights before we go on:
Are you not only about seizing the day in business, but also thinking long-term? All pointers show the Czech market will remain in lead for the years to come, shaping the overall picture the CEE e-commerce will take. It only makes sense to be at the actual source, doesn´t it?
“For export players, it might also be a gateway to the West. The Czech Republic is a great place to test your product-market fit at a reasonable cost level before entering western countries such as Germany, UK, France or even Austria, where exploration can cost you significantly more,” Growww Digital´s co-founder László Szábó experienced.
Deep dive into digital marketing
Okay, so one thing is thorough market research, attracting and retaining customers is a whole other level though. Czechia is not a build-it-and-they-will come market (is anything really, these days?). Having experience in price comparison marketing, PPC and content from other markets sure helps, but get absolutely ready to master those skills: businesses have to optimize their butts off to gain traffic and serve a whole lot for conversions on Czech market. But what entrepreneur doesn’t fairly enjoy being in the room with smart, innovative people keeping you at your toes 99% of the time.
We’ve localised the marketing strategy for over 100 projects. Tell us about your export business goals and we’ll give you a hand in market sizing, digital marketing cost estimation, business plan validation and an action plan for success. Our clients have grown on average by 88% in the last 5 years.”
– László Szabó, Google Certified Trainer for Export in CEE. for Export in CEE.
Price Comparison Shopping Optimization
Price comparison sites are considered a core e-commerce channel in CEE, and Czechia is no exception.
If your product portfolio consists of items typically performing well on such sites (from electronic to decor to aforementioned gardening), the two to definitely know about are Heureka (takes up 53% of the market) and Zbozi.cz (43%). As a part of Heureka Group, Heureka.cz has similar features you are used to from Hungary’s Arukereso or Slovakia’s Heureka.sk: seal of quality called Verified by customers (Ověřeno zákazníky), Store of the year awards, Heureka Cart (Heureka Košík), Quality store certification, and it also operates product search and comparison on satellite sites such as Srovnanicen.cz.
Zbozi.cz, the second most popular among Czechs, was founded in 2007 by Seznam, Czech search engine as well as second-hand marketplace, real estate site, internet TV and much more. Selling there means focusing on reviews and user-friendly content such as videos and how-tos. Popular segment-specific sites are Glami (fashion and accessories), Favi and Bonami (both home and decor).
How to decide which comparison site to use as a channel? Is it generally a good strategy to be on as many as possible? According to Zoltán Flekács, Head of Performance at Growww Digital, not necessarily. “If we aren’t counting Google Shopping, Heureka takes up a large part of the market. For electro and DIY sellers, it’s a must,” Flekács knows, “in the first part, we generally advise to get the most out of Heureka and Zbozi as they are very low hanging fruits. Optimization and automation (Beed and other local players) is on an advanced level in Czechia: prepare that your competition has fine-tuned these channels already, so match up to local standards. Once seeing results from Heureka, you can apply similar strategies to Favi, Glami or Bonami if they are a viable fit for your portfolio.”
PPC Advertising
Google Ads, Google Shopping and Facebook Ads campaigns is the core trio you want to employ first, and (almost) every time. When entering the Czech market, here are some helpful specifics:
Huge competition in most industries and product categories calls for proper market research and planning upfront “because most industries in Czechia are ‘red ocean’ with powerful and experienced players, and therefore a very tough market to compete on. Also getting to know the competition is key here,” Zoltán Flékács, Head of Performance at Growww Digital suggests.
Google is a strong player here (Google Shopping has been present for more than 5 years), but not as strong as in other CEE countries (60-70% in CZ) because of the local player Sklik (Seznam). “While Sklik is still secondary, we recommend using both tools proportionately to their strength in your campaigns,” is another tip from Zoltán.
“As a results-first focused agency with senior specialists native in 6 CEE languages, we’ve seen the power localised campaigns can bring to an exporting business, even if it’s a first-timer,” László shares Growww Digital’s core beliefs. We have a huge expertise in Google Shopping, as well as our ownGoogle Ads automation software ROIminer which we’ve been developing in-house for 8 years now. This helps us have a full search ads coverage of a website by automating ads management. In other words: it allows us to be more flexible and gain more by risking less,” Flékács explains and adds that as Google CSS partner, advertising with Growww Digital’s ROIminer comes at a cost-friendly price.
As an agency, Growww Digital works in a unique model that fuels growth. “More than 50% of our agency fee is a success fee. By helping our partners grow (on average at 88% CAGR in the last 5 years), we not only make their dreams come true, but also have enough skin in the game to constantly stay ahead,” Szabó adds.
SEO
Having a localized version of your store, in CZK and in Czech will enable you to have your store indexed in Czech search engines. Furthermore, Czechs are very sensitive to having content in their own language and would automatically dismiss a website in another language, even if it’s Slovak (a language they fairly understand).
Review your content and technical search engine optimization. We recommend having your technical (off-page) SEO centralized, meaning it is set in the same way across countries you export to. Make sure you localize off-site link building to Hungarian pages. On-site wording and localization is crucial – we cannot emphasize this step enough.
Social Media & Brand Communication
There are 5,70 million social media users in Czechia, according to the Datareportal 2020 which makes social media usage penetration rate of 53%. More than a half of internet users (in total 9,3 million Czechs are internet users) connect from mobile phones which makes it imperative to have a mobile-first website (as anywhere else in CEE). Facebook is the most popular, allowing businesses to reach almost 5 million people via ads there. Second comes Instagram with 2.40 million users of ads reach. For niche segments such as tech, Twitter can be an interesting tool (with “only” 586.5 thousand users but highly targeted). Rather than TikTok, Czechs are currently going crazy over Clubhouse (2+ million users) and that is despite the fact that they prefer Android (79%) to iOS (20%).
Conclusion and (your) next steps
If it isn’t obvious up to this point, we’ll be very blunt here and say: Czechia is a must-be market if you are serious with expanding beyond your nation’s borders. Tough competition only makes you stronger, equipped with valuable skills and systems for your operations in all the other countries. With time, this will be your flagship market, and based on performance here, you’ll be seen in a certain way as a cross-border, European player.
So, how to get moving towards that direction? Get first-hand insights about the Czech market in this Facebook mastermind for committed exporters, as well as valuable connections – did we mention the one thing Czech e-commerce players love most is get together and share best practices)? Or get in touch with us if you need help with export.
PS: If you know precisely what help you need in any area of digital marketing, talk to us directly and we will create a tailored offer that boosts your business results.