Fevad conducted a survey on the morale of French e-retailers in 2022. The latter look confident in the future despite the uncertainties.
The health crisis is not fully over, but high vaccination coverage (77.8 percent) reduces the risk of worsening cases and affects the resumption of retail activities. Although e-commerce has been pretty good over the two years since the pandemic, players in the sector have developed some uncertainties and have mixed opinions about the evolution of the 2022 market.
For the 11th year in a row, the Federation of E-Commerce and Distance Sales (Fevad) is publishing the results and trends from its research on the morale of French e-commerce. While 65 percent say they are more or just as optimistic as last year, 35 percent of respondents say they are less optimistic, a clear break from 2021, when there were only eight percent.
Two-thirds of e-retailers remain confident about the future and this is reflected in the economic prospects of their business: 67 percent believe their turnover will grow, and 45 percent predict net margin growth. However, 15 percent of them predict a drop in turnover for 2022, a figure that climbs to 21 percent for net margin.
Other trends that the surveyed leaders expect in 2022 are: increasing development of second-hand goods (by 90 percent of them), signing strategic agreements between e-traders / traders (71 percent) and continued concentration (64 percent).
E-commerce, a sector that will continue to employ
Despite less optimism than in previous years, 54 percent of managers plan to increase their workforce, and 37 percent believe that the number of employees should remain unchanged. Overall, only 9 percent of e-retailers believe their workforce is in danger of declining, which is still very close to the level announced in 2021, 7 percent. Forecasts showing that e-commerce should remain a business for the French economy this year as well.
More than 50 percent of respondents believe the Covid crisis has accelerated investment. They think half the time that the pandemic has slowed them down.
E-commerce priorities in 2022
This year, IT issues (IT, security) are at the top of e-commerce investment priorities, ahead of CSR, logistics and marketing / advertising. Thus, 66 percent believe that their investments in computer systems will increase, and 29 percent believe that they will remain stable. As for CSR, 57 percent of e-retailers expect an increase in investment, an increase of 2 percent compared to 2021, while 31 percent believe it will remain stable. As for logistics, they are more than 56 percent, with an emphasis on environmentally responsible delivery and packaging and finally 55 percent on marketing and advertising.
As social networks are one of the priority investment channels for e-merchants, continuity is essential. 65 percent of respondents predict an increase in spending in this area.
In the medium term, innovative projects should focus on predictive marketing (64 percent have an ongoing or future project), site availability (61 percent); consolidation of shares (59 percent higher by nine points); return mailboxes (42 percent) and related packages (40 percent). On the other hand, interest in voice assistants and virtual reality continues to decline.
The decline in the risk of serious contamination is reawakening the old ambition of e-commerce, internalization, which is back on the agenda and it seems that companies are ready to start conquering new markets again. Of executives surveyed, 85 percent believe their incomes will grow internationally over the next two years, up from 73 percent last year. So, only five percent can estimate that this will decrease. The desire for international expansion is clearly a priority for e-retailers and testifies to the dynamics of domestic players. Among the three desirable destinations we find Belgium, then Spain and Italy.
Concerns about political and economic developments
Political and economic news is a major source of concern for e-commerce leaders. Seventy percent say they are very worried about the stresses that affect supply chains and actually raise prices. Rising shipping costs, which stem in part from these tensions, are the second biggest concern cited by 60 percent of e-retailers. Third, the decline in household consumption associated with declining purchasing power is a problem mentioned by 57 percent of managers.
To alleviate these concerns, there are also positive elements put forward by respondents. First, 70 percent of respondents are very positive about the continuous growth of the number of customers via the Internet, which gives them hope for new opportunities. Another reason for optimism is the exponential growth of the mobile internet, which stands out for 59 percent of managers. In third place, 51 percent rate the increasing digitalization of physical players very positively.
Two weeks before the presidential election, two-thirds of executives believe it will have some effect on e-commerce, but 72 per cent say the campaign has not kept up with the industry’s challenges to date. Among the expectations of the leaders in relation to the future President of the Republic regarding digital and e-commerce, the support of companies in terms of investments and innovations is at the top (93 percent). This is followed by regulatory stability (91 percent), tax breaks (88 percent) and cyber security (87 percent). They also mention the growing expectation for greater consultations with professionals. During the assessment of the public performance of the five-year period in terms of e-commerce, the Government’s efforts in relation to the previous five-year period were emphasized, especially in terms of support and development of start-ups. (impact that 54 percent of executives consider positive, an increase of 28 points), digital business transformation (42 percent; growth of 25 points) or in the area of global digital support (37 percent, growth of 28 points).
Overall, 88 percent of executives say they are optimistic about the future of their company, a level similar to 2020, the year marked by the start of the Covid-19 pandemic.
The study, conducted by OpinionWay for Fevad and LSA, is based on a survey of hundreds of managers of major French e-commerce sites. The survey was conducted from February 14 to March 4, 2022 with a panel of 104 e-commerce site managers. Fevad also specifies that two thirds of the answers arrived after February 24, the date of the beginning of the invasion of Ukraine.