We’ll help you to localise your digital marketing strategy for the Hungarian 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 Hungarian market.
Hungary
as your next market for growthGrow your business in Hungary
Expand beyond borders and beyond your expectations. With e-commerce maturing rapidly, Hungary has just become interesting!
Still growing at about 14%, while maturing in terms of quality, Hungary is such an interesting market to enter right now. It’s no beginners game (is any expansion, really?). Hungarians got used to convenience. Their ideal? A quality product delivered the same day at the lowest price available and easy to return. Sure, they won’t make it easy for you. But when you pay close attention and implement, you earn their trust. An ecosystem is set up and well functioning, from logistics to marketing: if you’re serious about playing at a senior level (more effort but also more gain), this is the market for you.
Country in a snapshot
Hungary is a country of patriots. Not only are they proud of their cuisine (paprikash, anyone?), their heritage and language with double the alphabet (get ready to type away!), they proudly buy from fellow Hungarians. Lucky for you, Hungarians also increasingly shop abroad. There are over 2000 Czech online stores (and counting!) already on the market as a testament. But make no mistake: when in Rome, do as Romans do. Localization is an absolute key. How to inspire customers to choose you? Besides speaking their lingo, know this: Hungarians like the best deals and won’t hesitate to check more options before clicking “pay.” In fact, they kind of enjoy the treasure hunt. With the e-commerce landscape maturing rapidly they also have high standards, from the same day delivery to 30-day return option.
Volkswagen Beetle, Rubik’s Cube, the very first subway in Europe. Those are just a few of many Hungarian inventions. A nation of builders, it should not come as a surprise they are pretty competitive in business, too.
So let’s actually get to business.
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
A promised land? Pretty much still! Although significant amounts of online stores have already expanded to Hungary, a number of factors speak in favour of this country for 2021 and onward. The highest growth rate in the region is one of them. Hungarian online retail grows by 14-18% annually, the exact number depending on the source and measuring method.
Main drivers of Hungary’s growth:
- Easier access to internet / device
- Net monthly earnings increase (by 10%)
- Household consumption increase
- Higher trust to online payments and online sellers.
7 296 000
Number of online shoppers
76%
Online shoppers compared to population
35000
Number of shops
€3.52bn
E‑commerce revenue (2023)
8.5%
E‑commerce growth
E-commerce in Hungary was worth 2.2 billion EUR in 2019 (estimated YoY increase for 2020 was 30%) with industry leaders such as eMAG, Media Markt, Tesco and Alza.hu contributing most significantly. Electro/IT have been the number one driving e-commerce segment and continues to be so. Other products in high demand range from food and personal care (strongly boosted by 2020), fashion, home and decor, hobby, toys and DIY.
In terms of industry leaders, there is no “the winner takes it all” situation in Hungary. The e-commerce market is largely in the hands of a dozen biggest players without having a dominant one. According to GKI digital, the top 10 traders accounted for 35% of total turnover in 2019.
Based on online traffic data, Hungary’s largest web store is eMAG with 1.3 million visitors (in 2018) and products in more than 1,500 categories. Not that long ago, this giant merged with the second strongest industry leader, emag.hu. Both sites maintain their brand separate, occupying first and second position in the top 10. Technical department store chain Media Markt is on the bronze position as it is one of the original e-commerce players.
With electro being historically the strongest segment, 220volt offers 20 000 products from segments such as electronics, computers, smartphones, DIY, housing, and gardening. iPon and Aqua focus solely on electronics. Libribookline, a popular online bookstore, keeps growing sustainably.
Tesco has been the main driver in the FMCG online sector for years, but with the pandemic Auchan Online and SPAR grocery delivery services took their piece of the customer pie.
Alza.hu and Mall.hu too earned their place in that leading dozen. There are other foreign-owned businesses such as Rohlik (Kifli.hu), Favi and Glami claiming their space on the Hungarian market as well as long term national players such as Olcsobbat.hu, Praktiker (the largest DIY store) or PCX (electro).
Hungarian e-commerce market is largely concentrated around Budapest and its surroundings. This focus is another reason CEE e-commerce players chose Hungary: it makes logistics that much easier. The biggest players run their businesses from Budapest or in case of a number of exporters – from abroad. Besides cutting costs in logistics, many stores coming from The Czech Republic or Slovakia can also hire bilingual employees from southern Slovakia.
Customers
On top of all the growth, the e-commerce market in Hungary is just getting interesting. Why? While people still largely make decisions based on the product’s price, they also want the 21st century e-commerce experience. Same or next day delivery, personalized offers, a 30-day return option and a 7-day customer care go a long way. This together is challenging industry players to attempt to meet both needs, creating a more diverse ecosystem.
Who are Hungarian shoppers? Larger segments of population (80%) are internet users, and after 2020 also frequent ones. Although desktop purchases are in lead, customers have become smartphone-ready. Did you know more than 20 % of online shoppers come from Apple devices? These customers have 10-20% higher conversion rate in comparison with other mobile devices. Chrome is the most used search engine, followed by Safari.
Eight out of ten consumers do their research before purchasing (and generally trust the information they find). A typical Hungarian is generally very happy to hear words such as promotion, discount or free (shipping). Price is a big deciding factor, but so are reviews. Testimonials to your products and customer experience can make you or break you on the Hungarian market. Especially when you don’t (yet) have a showroom, a collection point or any other sign of physical presence.
Hungarians are very particular when it comes to showrooms: for many, they are a testament of company’s trustworthiness (and existence). Sooner or later, it becomes essential for your sustainable growth to meet customers in person, from a relationship-building standpoint as well as building your brand. It is especially true outside the Budapest area, where trust in online shopping and online payments is growing at a slower pace. In fact, setting up a local company (both as a legal entity and a physical space) is usually recommended in Hungary. It makes life a lot easier.
How to get their attention:
Ecosystem
Logistics. A popular destination as there are often no extra transportation costs to this “bridging country” (there are five major toll highways linking Budapest to Hungary’s neighbouring countries), provided you already ship to other markets in CEE. Who to partner up with? DPD, GLS, DHL, UPS and MPL (Hungarian Post) are some of the traditional delivery companies. They are usually a go-to option when shipping larger amounts of packages, as well as heavier ones. Sprinter and Express One (pallet shipping) are used by smaller e-commerce players and then we also have rising stars like Pick Pack Pont and Zasilkovna (Csomagküldő) as well as Webshippy, a fulfillment startup to outsource logistics.
Legislation / administration. If you want to build a strong brand and presence, VAT registration as well as setting up a local Ltd. (called Kft) is strongly recommended. The store operation is more demanding without local Kft, especially when you register various services, including putting your product feed on comparison websites. A middle ground is keeping your mother company abroad while registering to VAT ID. As per registering to VAT itself, Hungarian VAT is one of the highest in the world: 27%. It is compulsory after hitting HUF 8,800,000 (almost 25K EUR) in 12 months straight. From January 2021 new rules apply for the Hungarian online invoicing system.
Payment. While cash on delivery was winning just a few years ago, it is now a tie between cash and card payments. One remains though: reluctance to pay in advance. When exporting to Hungary, expect the majority of customers to pay on delivery. About 44 % Hungarians prefer cards, 45 % opt for cash, 5 % bank transfer and e-wallet. The market is developing similarly as countries to the west: the popularity of cashless payments will continue to grow.
Delivery. 52% opt for home delivery while 44% regularly pick up their orders in the store or at a delivery point. In general, home delivery wins outside Budapest (and other big cities) while pick-up points are rising in popularity around the capital. Foxpost and PickPackPont are some of the pioneers. In 2020, eMAG and Alza introduced customers to using contactless points that open on a QR code. When it comes to time of delivery, people in urban areas are used to the same day or next day delivery, but in general Hungarians do not hold it against you if it takes a tiny bit more. They only care that you keep your word: if your website promises 3 days, you can’t possibly ship the product on day 4.
Candid insights before we go on:
All in all, a lot of barriers of entry are removed when it comes to Hungary: transportation, fast delivery, similar buying behavior, similar market size as the Czech Republic, other companies passing on know-how and lessons learnt. But Hungary is a toughie in terms of localization. “We chose Growww Digital because they can handle huge amounts of content in different languages,” Electronic Star’s founder Peter Both says. Even in the era of automation, you do want to have native speakers for your content (and handling customer care, for that matter). Did we mention Hungarians are proud? Especially if you are a company that exports to their market, they need you to perform at your absolute best in order to trust you and take you as one of their own. But know this: “Before you start spending a lot of money on different digital marketing activities, we’ll have a look at your objectives and chances for success together,” Google Certified Trainer for Export in CEE László Szábó invites.
Deep dive into digital marketing
Acquiring revenue online in Hungary is a quest. You’d need a mix of skills, some of them on the very opposite spectrum. Think Asterix and Obelix. You wanna go fast and witty, but also take deeper, more complex steps at the very same time. Some performance marketing strategies are affordable, relatively fast and effective in Hungary. On the other hand, producing relevant content requires mastery, long-term view and seasoned native speakers. Unless you’re ten in one, you might want to partner up for this bit.
“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 84 % in the last 5 years.”
– László Szabó, Google Certified Trainer for Export in CEE.
Price Comparison Shopping Optimization
A price sensitive market such as the Hungarian is basically an open invitation to establish a presence on local price comparison sites, especially if you sell products that are typically performing well on such sites such as home / decor, electronics and DIY. If that’s you, Árukereső, Argép.hu, Favi, Glami and others are the places for you.
Active since 2014, Árukereső is the one name that comes to mind when you say Hungarian e-commerce. With nearly 15 million visits monthly and four thousand online stores, it is the closest to be called number one in Hungary. As a part of Heureka Group, Árukereső has similar features you are used to from the Czech Republic or Slovakia: seal of quality called Verified by customers (Megbízható bolt), Store of the year awards, Quality store certification (Termék kiemelése). Árukereső is Google’s CSS partner, meaning you can advertise on Hungarian Google at a more friendly cost. For electro sellers, Argép.hu is another popular choice with 3,5 million users monthly.
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, Árukereső takes 70%+ 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 Árukereső by optimising for it. Then you can employ Argép and Olcsobbat as secondary channels and experiment by being present there. In case of fashion, furniture, etc. Favi, Glami and Shopalike is a way to go.”
PPC Advertising
While the choice of other channels is optional and unique to every brand, Google Ads, Google Shopping and Facebook Ads campaigns are the three you want to employ first, and (almost) every time. “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. Patrick Morat from Popgom agrees: “Within a year we’ve multiplied sales via page channel and 300% increase in sales.”
One thing to know about PPC (there are many, but more on that in person!) is that you want to take into account the disproportionality between the size of Budapest versus the rest of the country. The capital is ten times the size of Debrecen, the second biggest city. According to Growww Digital’s data, more than 40%) of visits as well as half the revenue come from Budapest. Average CPC is about 10% higher for Budapest than for the rest of Hungary. “We have our own tool Comparison Shopping Service (CSS) and are the first to provide one in CEE. For those reasons alone, we can guarantee a 20% discount on your CPC prices across the region,” Zoltán adds. Gmail retargeting as well as retargeting similar audiences on Facebook are a key part of a successful PPC strategy.
SEO
Having a localized version of your store, in HUF and in Hungarian will enable you to have your store indexed in Hungarian search engines. 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.
Content Creation
Good content executed wisely can literally make your business. Most of us know it going in. But what businesses tend to forget is you don’t actually have to be on all the channels, coming with brand new content 24/7. You want to be smart about it, especially in a new country you are still getting to know more. “We chose Growww Digital for their good reputation,” Zsuzsa Müller-Pápai and Klaudia Varga Hotel Carbona**** narrate, “they were accurate and precise, open and lighthearted, constantly coming with innovative ideas around budget allocation, testing for results etc. This refreshing approach and thinking together on the go resulted in our sales booming. Visits from online quickly increased by 76% and the number of incoming reservations increased by 85%.” For Growww Digital, with 7 years of experience in 7 CEE markets, this is no exceptional piece of data. Their average customer has grown by 84 % in the past five years. If there’s one magic key to success on Hungarian market, it’s native language knowledge. You’d think that’s the case in every country, but Hungarians are particularly sensitive to everything that doesn’t sound like them: generic translations, non-native sound etc.
Here’s what we did for kifli.hu
Kifli’s successful hungarian expansion (Kifli is a local subsidiary of Rohlik.cz) was informed by understanding customer needs like an insider. “Hungarians are so tired of ‘social media perfection’: what they want to see more of are real people, real faces. They are craving real human stories. COVID-19 has made it even stronger: fans would like to see the people behind the business and would like to engage with them before and when they make a purchase,” Head of Social Media & Brand Communications Alexandra Mezei explains.
People are increasingly making conscious decisions when it comes to spending money. People, values and beliefs have become important and social media is the platform to show exactly that. One of the most popular post series on Kifli.hu was a 50-episode-long journey through the people of Kifli: not just leaders and management, but mainly drivers, cleaners and of course delivery guys. Alexandra Mezei highlights that a one extra mile step was sharing delivery photos taken by customers in main channels, as well as telling these delivery stories: when couriers arrived at a household, they were given some food, tip or small present to appreciate their work: “Not only did this spark inspiration. We made more than 16 million impressions in a month while there are less than 3 million people who belong to their demographic target audience.”
Kifli opened up about their values smartly, in just about the right time. After introducing the “save the food programme,” they went viral in no time and gained more than 20 000 followers on Facebook without any paid ads. “Upon checking the demographic data it turned out some of their fans were located outside of their service area. They have constantly been demanding its extension because they wanted to be part of something extraordinary that social media highlighted,” Alexandra adds.
Social Media & Brand Communication
According to the Digital 2020 report, Hungary has a social media usage penetration rate of 62% in 2020, with 94% of these users accessing via mobile phones. First, building trust as a player from abroad is key. You also don’t want to be dependent on just a few platforms (Google and Facebook) to make or break your business. If not for anything else, you don’t own the algorithm. Simultaneously with PPC, you want to build brand awareness on Hungarian market, paving your way to the minds and hearts of those proud Hungarians. A localized, mobile-first website is a must. A site clearly communicates your brand’s DNA while serving as an end of the funnel of digital communication across channels, remarketing users, retention campaigns, all the way to building communities. Around 6 million Hungarians use Facebook and about third of that use Instagram, which is a number higher than in the Czech Republic.
How to go about social media? Take it from the world’s leader in sanitary technology
Sandor Molnar and Monika Sipocz from Geberit Hungary share their experience: “We knew content was important but had our concerns about using social media. We wanted to avoid quick communication on the spot opening our company up to criticism and unprofessionality. We have found the perfect partner to address this issue, who can deal with such tasks in a quick and professional manner. Growww Digital team diminished most of our concerns at the first meeting. We never looked back. Alexandra works quickly, has working morale by the books and is creative, innovative and always comes with solutions.”
According to Alexandra herself, the key here was good balance of company news, product launches, behind the scenes touches, entertainment and CSR (donating sanitary products and rebuilding bathing sections of schools both in remote Hungarian villages and in the developing world). “Adding a continuous storyline is always a good strategy: we have been posting photos from the most prestigious venues around the world that have Geberit products in their 5-stars bathrooms in order to showcase the global presence of the products. It has had a great engagement rate for more than 5 years now,” Mezei sums up.
Conclusion and (your) next steps
Hungary is the heart and hub of CEE. Despite the bureaucracy, it is a country worth entering, now more than ever. Some niche e-commerce categories might not have a clear leader. Customers are challenging the market to bring grown-up sustainable solutions. Can you match up their expectations? First up, deepen your market insight in this Facebook mastermind, a closed community of committed exporters, 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.