Despite the economic problems many European countries are currently facing, the e-commerce market is thriving. Driven by consumers’ busy, fast-paced lifestyles on one hand and the rise of mobile devices like smartphones and tablets on the other, the convenience offered by the online retail sector is proving a major hit with consumers.
Online retail sales in Europe have seen exceptional growth in 2014 and are expected to double again between 2014 and 2019. Whilst the UK should be considered the most mature market in this as yet young sector, Germany is the largest market in terms of overall value. In fact, Germany accounts for over a quarter of total European internet retail sales.
However Germany’s online retail market is somewhat restrained by the near-absence of a serious online grocery sector, with traditional store-based retailing accounting for the overwhelming majority of retail sales. Nonetheless, it is developing rapidly.
Online purchases of dietary supplements soar
One area that stands out as showing significant online growth is health and wellness, in particular the dietary supplements sector. The rise in online sales outshines the overall development of Germany’s vitamin and mineral supplement category which has seen some ups and downs over the last few years, growing at a modest 1.2% annual rate in value. This is, however, expected to pick up from 2014 to 2018. The market itself is highly fragmented, with only a few major players, including Abtei, Klosterfrau and Queisser Pharma, and hundreds of smaller businesses active in the field.
The online channel has become a popular platform for manufacturers in their efforts to reach a diverse and broad set of customers. Products are sold via online pharmacies, dedicated health platforms, retailers’ and manufacturers’ websites and not least via Amazon, the largest online retailer in Germany, and are often offered at significant discounts. Beyond easy price comparisons, the online channel also facilitates consumers’ research of products’ ingredients and benefits prior to purchase.
Tried and tested: Online reviews encourage supplement uptake
Many of us will know that the internet is often a first port of call when in need of information on health and to make decisions about diagnosis and treatment. Retailers have taken note of this and have focused efforts on improving the online shopping experience through better online education and targeted marketing. Online pharmacies are required by German law to provide the option of personal advice via telephone or email and some websites now have live chat options to help instantly address specific consumer questions. Such methods have increased consumers’ comfort level for buying dietary supplements online.
Online marketing plays an increasingly important role in regards to usage of dietary supplements. While two in five German supplement users report endorsement by health professionals and recommendations by friends or family as influencing factors, almost one in five also feel encouraged by reviews on health websites. A further one in ten are encouraged by reviews on product websites. This agreement is relatively consistent across age groups.
What are the risks?
Whilst the online market for dietary supplements is flourishing, the German Federal Institute for Risk Assessment and consumer protection agencies have been increasing their efforts to warn customers about its particular challenges. With thousands of products available to buy online, not only from domestic, but also non-EU suppliers, customers are considered to be at increased risk from non-licensed ingredients, misleading advertising and missing health warnings.
Increasing public education about possible risks poses a minor threat to the development of the online market for health products, but at the same time represents a chance for trusted and established brands to shine.
Despite the risks, the dietary supplement category growth in Germany is expected to continue amid both increased consumer interest in health generally and retailers’ efforts to position themselves as one-stop health and wellness destinations. The proliferation of the online channel for dietary supplements offers a unique opportunity for retailers and manufacturers to capitalise on a robust growth sector.
Mintel’s Food and Drink Analyst for Germany, Julia specialises in delivering insights on issues affecting the German market, performing analysis across a range of food and drink categories. Upon joining Mintel in 2009 as a Trend & Innovation Consultant, Julia was responsible for providing tailored product innovation analysis and client support primarily to Mintel’s German speaking clients.
