Slovakia: A small country with great potential

Slovakia is a country with a current population of almost 5 and a half million inhabitants. Nevertheless, the country has a lot to offer in the field of e-commerce, as it currently boasts annual growth of 16% in this area. Another advantage is the currency – the euro – which eases cross-border payments and offers financial stability and quality infrastructure.

Despite its size, Slovakia is clearly a country that can compete with larger markets. It annually generates more than 900 million euros in e-commerce. The ecosystem for e-commerce is brilliantly established and works closely with that of neighbouring countries.

Size of the e-commerce market

At present, about 13,000 e-shops are operating in Slovakia. The largest segment is electronics, followed by fashion, food, cosmetics and footwear. We should also mention books, decorations and household products, gardening supplies or the automotive, hobby and cultural or sports segments.

The most profitable periods of the year

The most important part of the year for Slovak e-shops is the Christmas season, which usually begins in September and ends in mid-January. The so-called Black Friday is also a relatively new and popular phenomenon. However, it lasts longer than a single day in Slovak e-shops.

Growth in the past, growth in the future

Statistics show that in the next four years there will be compound annual growth rate of almost 14%, which, according to predictions, is expected to lead to a significant growth of e-shops and market volume up to almost 4 billion euros in 2025.

The 5 biggest players on the Slovak market

In 2021, several e-shops were operating in Slovak e-commerce:

1. Alza.sk – main category: electronics and media
2. Mall.sk – furniture and appliances
3. Tesco.sk – food and personal care
4. Hm.com – clothing, fashion
5. Nay.sk – furniture and appliances

The first three e-shops in the rankings ultimately account for 50% of all online revenues in Slovakia. We should also mention the favourites and the important players according to each of the five main segments. 

• Clothing, fashion – Hm.com, Aboutyou.sk, Zara.com, Eobuv.sk, Nextdirect.com, Zalando.sk
• Electronics and media – Alza.sk, Martinus.sk, Mall.sk, Datart.sk, Nay.sk
• Toys and hobbies – Alza.sk, Hornbach.sk, Mtbiker.sk, Mall.sk, Autodielyonline24.sk
• Food and personal care – Tesco.sk, Notino.sk, Alza.sk, Pilulka.sk, Drmax.sk
• Furniture and appliances – Alza.sk, Ikea.com, Mall.sk, Nay.sk, Moebelix.sk

With regard to the future, the furniture e-shop XXXLutz.sk, for example, whose sales in 2021 increased by 424%, has great potential on the market. Other e-shops with rocket growth last year are Modivo.sk and Investicnezlato.sk.

How does the Slovak customer behave?

Almost 90% of Slovak customers shop regularly online, and during the pandemic, their purchases even expanded to include food and medicine. If you want them to buy from you (repeatedly), offer them:

• Advantageous prices for products and delivery. Slovaks prefer shopping in e-shops that offer free shipping. Picking-up goods for free at a branch is also a popular method of delivery.
• Product availability. Along with the price, having products in stock so that they reach the customer as soon as possible is also important. Many customers will leave a site if the product is not in stock or available immediately.
• Complete customer care. Slovak customers expect pleasant behaviour; they appreciate it and repay it by coming back to you. Many Slovak customers also seek advice based on reviews on the Internet. E-commerce experts summed this up as follows: “Get a Slovak customer and you get a customer for life.”
• Responsiveness of the e-shop on a mobile and simple navigation.
• Ecological solutions. Ever more customers prefer environmentally friendly products available in recycled and reusable packaging.
• Loyalty programme

Slovak customers often order goods not only from Czech, but also from German or Chinese e-shops. 

Popular payment gateways

Despite the higher price, cash on delivery is still popular in Slovakia, preferred by up to two-thirds of all customers. However, payment by bank transfer or online card payment (and Visa is more popular than Mastercard) is gradually beginning to catch up with this method.

From the customer’s point of view, the right choice of payment gateway is also very important. Domestic and regional companies, as well as global platforms and payment gateways of individual banks, are common on the Slovak market.

Before selecting a specific payment gateway, don’t forget that it needs to be compatible with other systems, such as invoicing, accounting system or CMS. 

Logistics of the Slovak market

Due to its location in the centre of Europe, Slovakia is ideal for a transport and logistics network. It needs to be noted that the Slovak market is very closely linked with the Czech market; they are close not only by language, but also by logistics systems and cooperation between individual businesses.

The most used means of delivery are road (12th in Europe), railway (1.5 million goods carried) and air. The country has available six airports – in Bratislava, Košice, Poprad-Tatry, Sliač, Žilina and Piešťany.

Expansion in the country was also helped by a skilled and cheap labour force as well as the high industrial growth.

Comparison of delivery companies

Slovak road freight transport is dynamic. Among the most commonly used delivery service partners is Slovak Post (37%). 

The companies Packeta and Uloženka also hold the leading positions on the market with the possibility of delivering packages to a delivery point. Orders are available for consumers almost anywhere, and the costs associated with delivery are more than favourable.

In the scope of fulfilment services Webshippy, Frisbo, Expandeco, Swiss Point or Shipmall are the most widespread in Slovakia.

Legislation

In order for e-commerce to reach its maximum potential, the EU has been working on a revised directive on payment services and new rules for cross-border parcel delivery. New regulations in the area of e-commerce have also been added, such as stopping unjustified geo-blocking, revising consumer protection rules and new VAT regulations for the sale of goods and services online.

VAT in Slovakia

Registration of a foreign firm for VAT is already mandatory for revenues of over EUR 10,000 on the Slovak market (to facilitate administration, we recommend considering OSS). VAT in Slovakia is set at 20%, but (within the social economy) for books, selected foodstuffs, selected medical devices, accommodation services, goods and services Slovakia sets it at 10%.

Cookies

We must also mention cookie technology within the scope of legislation. It’s easier to target advertisements or to profile the shopping habits of a visitor based on information about web behaviour obtained using cookies. Permission to use cookies must be granted by active consent. According to the law, if a website visitor does not give explicit consent to data processing, it is not possible to collect data. The need to grant consent for all data requires the provision of information, such as expiration, their purpose or recipients. 

The rules and regulation of electronic communications in Slovakia are governed by the Electronics Communications Act, which also deals with the protection of privacy and personal data, the provision of subsidies, supervision and sanctions. 

Online marketing

Approximately 4.06 million people use the Internet in Slovakia. As part of social networks, in 2022, Facebook will be used by 2.60 million users, and 1.55 million are on Instagram. LinkedIn is accessed by 687 thousand active users. TikTok, has nearly 600 thousand users.

When it comes to online tools, a 2019 survey by the company DPD recorded a significant increase in PPC ad investment for 27% of online stores. Potential growth of the reach of your e-shop can also be achieved using campaigns by Google Ads, Google Shopping and Facebook Ads.

Various factors influence customer decision-making. Customers not only compare the price for shipping, but also the price of specific products. The tools they use are price comparators.

Price comparators are also used for:

• comparing services, assessing an e-shop and other added values,
• informing about the “appreciation” of the e-shop (Verified by customers or Recommended by customers),
• displaying products on the leading rungs of the comparator

More than 40% of click throughs from a product detail go directly to an e-shop. Thanks to bidding, specific e-shop offers are displayed in the place of recommended products and their location is above other offers. 

6 largest comparators and inspirational search engines in Slovakia

1. Heureka.sk – wide spectrum of products
2. Glami.sk – fashion and accessories
3. Favi.sk – home and decoration
4. Biano.sk – home and decoration
5. Najnakup.sk – fashion and accessories
6. Pricemania.sk – fashion and accessories

Current trends on the market

Shopping through social networks will grow

Facebook and Instagram were among the social networks most used by Slovaks in 2021. The already mentioned platforms have taken advantage of the fact that online shopping has become more and more preferred thanks to the pandemic. Customers can view products and services at any time in an online environment. For convenient online shopping, it’s important to provide customers with accurate information that they can easily find.

The arrival of omnichannel 

The key task of omnichannel marketing is the linking of content from individual channels into one complex. Its potential will further grow thanks to users who want more personalised services. It can also be integrated among all communication and distribution channels in order to meet a customer’s needs. For example, by implementing the service BORIS (Buy Online, Return In-Store), you can gain a significant advantage over the competition. 

Connection of e-shop and brick-and-mortar store

Slovaks have a tendency to first explore the online market, then order products electronically, mostly with the option of picking them up in a brick-and-mortar store. For the correct connection of the e-shop, it is recommended to ensure consistency of prices and the possibility of picking up (or the free return of goods) in a brick-and-mortar store. 

Are you interested in Slovak e-commerce but still don’t know how to start? Contact us, together we will look at all the opportunities that the market offers and tailor a business strategy for you.