Overview
French B2C commerce of products and services is one of the largest markets in the world, ranking second in Europe and fifth in the world in terms of online consumption in 2016. The market grew by 14% between 2015 and 2016 representing a good opportunity for U.S. retailers that have unique products and services to offer. U.S. firms tend to do well selling products and services to the French via eCommerce. In fact, although the U.S. has a trade deficit with Europe, digital services, including eCommerce sales, are where we see a significant trade surplus of $71 billion for the year ending in 2015.
The U.S. Commercial Service sees the French eCommerce market as a sizable opportunity for U.S. retailers in virtually every category. The French are fond of American culture and tend to enjoy our brands. Many firms begin by testing the market directly from their U.S. site, or using Amazon or a similar French marketplace to gauge interest. Online marketplaces are beginning to disrupt industries where traditionally starting with a distributor or sales agent would have been advisable.
For U.S. SMEs operating without a presence in Europe, it is important to understand the basic rules and regulations for selling to consumers in the market. While we expect that the Digital Single Market strategy (see below) will assist U.S. firms in adhering to one single set of rules and regulations across Europe, U.S. firms currently must navigate national and European regulations and standards for selling products online. The French tend to interpret existing EU regulations stringently, or tend to regulate in areas where the EU has not yet proposed legislation. For example, several recent online players, both U.S. and European, have been fined in France for violating rules such as the protection of consumer’s data privacy or advertising “online sales” outside of permitted holiday periods.
When approaching the EU market, U.S. Commercial Service recommends starting small and selecting the markets that show the most potential. France may be attractive not only because of the size of the market, but the effect that Brexit may have on currency fluctuations and shipping costs from the UK to the rest of the continent. If a firm determines that the French market represents a good opportunity, seek out local service providers and experts that can help with a digital marketing strategy. The U.S. Commercial Service in Paris can be a good starting point. Current Market Trends
A couple of trends are becoming more important in the B2C ecommerce, including m-commerce (smartphones and tablets), the “click-and-collect” or “click-and-reserve” options, the multichannel approach (web-to-store or store-to-web), the CtoC and social commerce.
The “click-and-collect” option for general products and grocery stores in particular has grown significantly in the past years and food grocers for example are implementing larger number of sites offering this purchasing option. The “premium” delivery subscription, just like Amazon Premium, is also developing at a fast pace. The “click-and-reserve” option is well received and already widely used in the fashion sector.
The sharing economy and its platforms are also trending in France with 60% of internet users using it for renting homes, car sharing, grouping purchases from producers (i.e. vegetables), with popular global brands such as Airbnb and Uber and local players such as BlaBla Car.
Another growing trend for e-merchants is the use of market places; their sales grew by 46% in one year and represent 26% of their total sales volume. Marketplaces now account for 9% of online purchasing and are estimated to represent more than $3.3 billion (€ 3 billion) in sales.
The shared economy has not bypassed France, with 60% buying or selling products directly with each other on websites such as Le Bon Coin. [1]
Domestic eCommerce (B2C)
In 2016, almost 37 million French people shopped online, which represents 80% of internet users. The average online transaction in 2016 was around $77 (€70) and online shoppers tend to shop more frequently, approximately 28 times a year, for a total amount spent of around $2,213 (€2,000) in 2016. Online shoppers purchase mainly clothing (57%), cultural products (52%), travel packages (43%), and high tech products (42%). Most of the sales volume, however, occurs in tourism (32%), clothing (10%), home equipment (7%) and click-and-collect grocery products (7%). [1]
Alternative Payments Methods
Market summary Cards are the main payment type in France – 76.6% of transactions, with 65.6% provided by local banks, led by Visa provider Carte Bleue. Second most common is e-wallets, representing 11.2%. PayPal holds the major share at 10.4%.[2]
Mobile appetite
Ownership of mobile devices in France sits below the global average, with just 40% of shoppers using smartphones and 12% tablets. Spending on these devices is equivalently low, 7% spent via smartphones, 3% via tablets and just 1% of total online spending done via mobile. Around a third (28%) of shoppers express their intention to spend using this platform in the coming year. [3]
Cross-Border eCommerce
B2C shopping abroad is also becoming more popular; there is a growing share of cross-border online purchases taking place, although not as high as in other parts of Europe. In 2016, 46 % of French online shoppers bought from foreign e-merchants and 50% of e-merchants established in France received orders from customers located abroad.
Other Payments Methods
Allopass: specialises in pay-per-phone and pay-per-SMS (text message) payment methods. Bank Transfers, Cash on Delivery, CM-CIC Paiemanet, Hippay, Moneo, Slimpay. [4]
B2B eCommerce
Just over 20% of French companies make purchases electronically (via a website 7% or via a digital data exchange system-EDI – 11%) which represents 18% of the total amount of sales to professionals (B2B). This market accounts for $553 billion and is expected to grow significantly in the next coming years. In 2015, most of the transactions were made in travel and transportation purchases (53%), followed by a few sectors such as boating equipment and supplies (33%), computer supplies (30%), medical supplies (25%).
Digital Invoicing
While the Modernization Law of the French Administration (LME) mandated e-Invoicing reception for the French State (Ministries and related bodies) since the 1st January 2012 , the Simplification law (article 1) voted on October 4th, 2013, mandates all Economic Operators (private sector) to send electronic invoices to the public sector, from January 1st, 2017.[5]
eCommerce Intellectual Property Rights
France is a strong defender of intellectual property rights. US firms should refer to this Country Commercial Guide’s Intellectual Property section and the local Code of Intellectual Property for further information.
Popular eCommerce Sites
Popular ecommerce sites in France include Amazon, Cdiscount, Fnac, Ebay, Voyages SNCF (travel and train tickets) and Price Minister.
Payments Regulation
All forms of ecommerce are available in France. Many companies sell products and services on the internet and use electronic data interchange (EDI) with customers/suppliers. There are a number of business-to-business (B2B) electronic-trading platforms. France is also experimenting in several cities with near-field communications (NFC), a short-range wireless technology whereby mobile phones can be used as payment and identification devices.[8]
Local Entities
No local entity is required in France, although (as is the case with most Eurozone countries), an EU entity is mandatory. For Visa and MasterCard, a connection to a local acquirer is also recommended as usually this results in higher authorization rates. [9]
Online Payments
In France, 80% of online purchases are paid using debit cards tied to their bank account. The French are not accustomed to using credit cards to pay with credit. The French use other means of online payments which include electronic wallets (42%), gift vouchers (28%), virtual bank cards (16%), installment payments at no charge (15%), and 14% by direct debit authorization. Note when shopping outside of the EU, French consumers must pay an import fee for any goods purchased with the price above 22 Euros.[1]