Digital Retail Landscape 2024/II.

Hungarian e-commerce growth is now driven by imports

In 2024, based on measurements by PwC for Q1-Q3 and preliminary data for Q4, the total Hungarian e-commerce market could reach a sales volume of 1 920 billion HUF with a 15% growth in volume, of which 17% – around 330 billion HUF – is generated by import retail. Imports have also clearly become a driver of growth in 2024, as the Hungarian online retail sales have only managed to grow by 10%. According to the latest edition of PwC’s Digital Retail Landscape report, produced in partnership with the Digital Commerce Alliance, a quarter of online orders are delivered to shoppers via parcel lockers, and Temu has become the e-retailer with the largest customer base and order numbers of 2024.

Competition in the shadow of the global giants
is getting more and more intense

The Hungarian e-commerce market has undergone such a transformation in 2024 that is unprecedented in the sector’s nearly 25 years of existence in Hungary. The driving force behind the development of e-commerce is no longer Hungarian and EU retailers, but cross-border, import-based businesses. Therefore, now when speaking about the „Hungarian e-commerce market” it is important to clarify what we mean by „market”.

„Just a few years ago, the Hungarian e-commerce market consisted almost exclusively of EU retailers (with a Hungarian side and often a local team) operating in Hungary or considering Hungary as a strategic market. In addition to Hungarian e-retailers, international retailers have for a long time been a relevant source of supply for a small, clearly identified group of customers. However, shopping abroad has now also become a competitive alternative for Hungarian retailers in terms of shopper experience, speed and service levels.”

– was the key finding of the Digital Retail Landscape highlighted by Norbert Madar, Head of PwC’s Digital Commerce team and Vice President of the Digital Commerce Alliance.

Imports are now driving the e-commerce market

The growth rate of e-commerce followed that of total retail trade in 2022 and 2023, failing to accelerate significantly mainly due to the distraction of high inflation and downtrading. This trend changed notably in 2024. With the launch of import trade, e-
commerce in Hungary has become a two-polar economy, as competition between Hungarian and import e-commerce is the defining ecosystem. Although full data is only available for the first three quarters*, PwC estimates that the total market could end 2024 with total aggregate sales of around 1 920 billion EUR, with a 15% annual growth rate. Of this total, Hungarian and EU retailers account for around 1 600 billion HUF, with a 10% increase, to which import e-commerce – dominated mainly by Temu – adds another 330 billion HUF.

„Temu’s high-level operating model – fast delivery, easy product returns and always-on customer service – has also raised customer expectations, and the Hungarian retailers are trying to compete by improving service levels beyond promotions (e.g. wider, faster logistics).”

– added Ildikó Cserjés-Kopándi, PwC Hungary’s e-commerce expert.

Hungarian retailers under pressure

The price sensitivity of Hungarian shoppers and the favourable prices and service levels of global players are putting pressure on Hungarian retailers, requiring technological developments, innovative strategies and increased marketing efforts. As
demonstrated by the success of Temu, shoppers are increasingly making value for money choices, while fast delivery and convenience have also become a key requirement.

In addition to increased regional and international competition, the market has already become turbulent in terms of product categories: while FMCG and beauty care sectors continue to show significant growth (+24% and +23% respectively), sales volumes in categories such as clothing, home furnishings and DIY have declined, mainly due to price pressure from imported products and changing shopping habits.

According to the e-retailers surveyed, the biggest challenges for online retailers in their home country are attracting new customers (48%), increasing shopping frequency (39%) and lack of capital (35%). Increasing competition from abroad and market penetration (27%) is continuing to put pressure on the Hungarian players.

„Hungarian e-retailers need advanced services, technological innovation and a high level of customer experience to compete with global and regional players”

– Szabolcs Timár, industry expert at PwC and lead analyst of the research series, has evaluated the biggest problems retailers face.

2024 was also the year of Temu in Hungary

Following the trends across Europe, Temu has become one of the largest e-retailers in Hungary in less than a year. The Chinese market has generated more than 9 million completed orders by 2024, according to industry measurements based on PwC’s parcel logistics data services. For this, based on online shopper surveys, it generated a sales volume of around 110 billion HUF, with an active customer base of 1.8 million.

Although Temu 2024 lost some momentum in the last months of the year – due to both rising prices and the falling exchange rate – its aggressive marketing campaign not only attracted customers, but also increased their shopping frequency throughout the year. Favourable prices allowed shoppers to buy more products for the same budget, which in turn led to increased shopping activity.

According to data published in the Digital Retail landscape, a third (34%) of online shoppers and almost half (47%) of people aged 18-29 have the Temu app on their phone. 77% of respondents chose to buy here because of the cheaper, more
affordable prices, but there is also a significant proportion of those who preferred them because of the wider choice, the simple shopping process and the website that is available in Hungarian.

As the app has spread, Temu has gradually lost advertising intensity, as evidenced by the latest Growww Digital Temu Index presented in Digital Retail Landscape. Data based on ad spending shows that the Chinese giant’s advertising presence in Hungary is still significant, but it is steadily decreasing month by month, with a 29% fall in January 2025 compared to January 2024. This means that Temu has reduced its advertising intensity by almost a third compared to the level of a year ago.

„Hungarian e-retailers have two possible visions for the future in an era of e-commerce dominated by global giants: to remain a Hungarian, local player in the national market, or to grow into a regional retailer using the tried and tested concept. The Czech and Polish operators have been on the path of expansion for years, and we are seeing the results and success of this here at home.”

– László Szabó, managing partner of the digital marketing agency Growww Digital, summarised the potential opportunities.

Regular customers who order at least monthly
account for around three quarters of orders

The currently active 4.2 million Hungarian online shopper base can be divided into three groups: those who rarely shop (31%), ad hoc shoppers (38%) and regular shoppers (31%). In parallel with the rapid growth in the customer base, the frequency of shopping declined slightly last year. However, the 31% of regular shoppers who bought online at least monthly made up the majority of sales volumes – around 75% of parcel volumes – in 2024.

In recent years, Hungarian shoppers have also become more conscious of the economic pressures and high inflation. The Digital Retail Landscape reveals that 54% of respondents consider where to shop and 36% often wonder whether they really need to buy a particular product. The average basket value remained stagnant during 2024, indicating a further increase in price sensitivity in an improving inflation environment that is still high compared to previous years.

„Hungarian shoppers have become much more aware in recent years, and this is transforming the way how the e-commerce market works. Increasing awareness is not only a challenge, but also an opportunity for retailers to keep their shoppers with more creative offers and a better customer experience. Customer segmentation, loyalty programmes that entitle customers to premium services, Buy Now Pay Later solutions with deferred payment schemes, and innovative services such as parcel lockers and same-day or guaranteed next-day delivery are all intended to keep customers and encourage frequent shopping.”

– emphasised Antal Kerekes, Head of the Technology Advisory Business at PwC Hungary.

Technological improvements to boost the shopping
experience

The key to the e-commerce shopping experience clearly lies in technological innovation, with one important area being the payment of orders. According to the Digital Retail Landscape, 39% of online shopping was done with pre-payment (credit card or other digital payment), while the proportion of cash-on-delivery transactions was 61%.

„In 2024, the proportion of prepayments has increased even more: already 4 out of 10 online orders are prepaid by Hungarian customers. Thanks to technological developments such as stored value and mobile wallet payments, online card payments are increasingly being used instead of cash on delivery.”

– indicated László Szetnics, member of the DKSZ board, responsible for digital payments at Mastercard Hungary.

In terms of how orders are picked up, in 2024 the spread of parcel lockers will be in a new stage: last year, Hungarian shoppers placed one in four e-commerce orders in parcel lockers, partly due to the fact that the number of lockers in 2024 almost doubled compared to 2023, rising to nearly 9 000 in four years.

Strengthening Hungarian digital trading is also important for the national economy

Summarising the findings of the Digital Retail Landscape, Pál Bíró, President of DKSZ (Digital Commerce Alliance of Hungary) and Head of Google Hungary, pointed out that although there are more positive trends in early 2025, there is still a lot of international and regional pressure in e-commerce and therefore it is important to support and strengthen the competitiveness of Hungarian retailers:

„2024 has shown that the Hungarian e-commerce market needs to adapt to changing, globalising conditions, but that rapid response and continuous improvement are essential for long-term success. For Hungarian businesses, following international trends, adapting to customer needs and expanding regionally are the keys to survival and growth. In order to achieve this, it is of utmost importance from the professional, federal and governmental sides to show the way and help the ecosystem to grow stronger through education, training, support and mentoring programmes. As part of this, the DKSZ Mentor Programme will be launched in 2025, while we are also working on creating further training opportunities.”