Sometimes referred to as the ‘powerhouse of Europe’, Germany has, for a long time, been an attractive market for businesses to enter. As the largest economy on the continent and 4th largest globally, its citizens enjoy some of the highest levels of disposable income in the bloc. Combined with an established infrastructure, skilled workforce and a reputation for leading innovation, Germany is a solid and tested market for international businesses.
Read on to find out the latest market insights which will support your growth into this prime territory.
Germany: Key Market Data
Currently valued at approximately US$123.5 billion in 2021, Germany’s e-commerce market has grown consistently over the last decade placing it 3rd behind France and the United Kingdom. Mobile commerce has seen a quick adoption in this region partly thanks to the rise of voice searches, currently taking a 33% share of all e-commerce sales.
Digital Marketing in Germany
In January 2021, internet penetration was reported at 94%, thanks to over 78 million internet users at the start of the year. In the same period, there were 112.9 million mobile connections in the region which is equivalent to 134.7% of the total population as citizens often have more than one mobile device, signifying the importance of a mobile-first strategy when developing online stores.
As with much of western Europe, Google is the go-to search engine for most of Germany’s online users, taking 91.2% of the overall search engine market share. Bing trails behind with 5% of queries made on Microsoft’s platform, followed by Ecosia, taking 1.2% of searches.
T-online is Germany’s most popular native search engine, although taking a share of just 0.24% of searches, it is not a viable competitor for Google.
Search Engine Optimisation
As Google is the dominant search engine in Germany, SEO techniques will be the same as for English speaking markets. Whilst Germany has one of the highest English proficiency levels in the world, localising content for this market is crucial for achieving the best keyword rankings and conversion rates. Ensure keyword research is carried out in German and landing pages are localised by a professional translator.
Social Media
Germany had over 66 million social media users in January 2021, which is equivalent to 78.7% of the population. The most popular platform is WhatsApp (87%) followed by YouTube (69%) and Facebook (63%).
For business use, Hamburg based Xing is dominant here, taking 19% of users compared to LinkedIn’s share of 17%. Xing provides similar advertising opportunities as LinkedIn, and although its targeting options are not as sophisticated, it should be considered for B2B promotions.
Pay Per Click
Google search and display campaigns are effective in this region with a similar average cost per click and click through rate as for UK audiences. Germany does currently experience the highest click-to-purchase rate in Europe, providing the best ROI for this channel.
Facebook ads are also viable in this region. However, statistically, they convert less well in Germany than in other parts of Europe.
Email Marketing
Email marketing is still as popular in Germany as it has been over the last 5 years with over 93% of online stores offering email subscriptions. Open and click rates are average in comparison to the rest of the continent (22.8% & 4.3%, respectively). Great care must be taken when using email marketing in this region; however, as Germany has strict privacy laws and being part of the EU, GDPR regulations must be followed.
Legal Requirements
Legal requirements for trading in Germany are amongst some of the most stringent on the continent. It’s important to make sure you have an Impressum on your German site stating the author and owner of the site, or you could be subject to a fine. All websites must provide the following information in line with the Telemedia Act:
- Company name & address (a PO Box address is not sufficient)
- Email & telephone contact information
- If your company is subject to any official authorisation of licence, and details of the regulatory or supervisory body
- VAT identification number and business identification number issued by the tax authorities
Specific rules for e-commerce businesses can be found here.
Conversion Rate Optimisation
Website Domain
Where possible, a .de TLD (top-level domain) should be used for German facing websites, especially for online stores, as like most Europeans, Germans tend to establish greater trust with domestic-based websites. Non-European domains are best avoided as Germany’s Consumer Protection Agency warns its citizens that security standards may be significantly lower for properties outside of the EU.
Website Design
German colour preferences tend to be more conservative than in the UK. Garish colour schemes are therefore best avoided on websites as this can be an immediate turn-off for potential customers.
Germans also value a more minimalistic and purpose-driven approach to design. UX (user experience) should be the top priority for web designers in this market.
If you’d like to find out how to be successful in Germany get in touch!
