E-commerce in Portugal: Introduction
Electronic commerce, or e-commerce, has become increasingly important in Portugal in recent years. According to the Portuguese Association of Distribution Companies (APED), online sales in Portugal will grow by 14 per cent in 2022, reaching a value of 10.4 billion euros. This growth is driven by several factors, such as the growing penetration of the internet, the increased use of smartphones and tablets, and the change in Portuguese consumer habits.
Some of this data was also covered in the e-commerce trends in Portugal in 2023.
E-commerce opportunities in Portugal
The e-commerce market in Portugal has great potential for growth. Internet penetration in Portugal is 86 per cent, above the European Union (EU) average. In addition, the number of smartphone users in Portugal is increasing, with more than 70 per cent of the population having access to a smartphone. This trend creates an opportunity for Portuguese companies to sell their products online to a wider audience.
Through an online shop, companies can reach a global audience, 24 hours a day, 7 days a week. In addition, e-commerce offers the opportunity to reduce costs and increase operational efficiency.
Strategies for E-commerce Success
To succeed in e-commerce in Portugal or any other country, you need to follow some important strategies.
This comprehensive mini-guide will cover the main aspects that Portuguese companies should consider in order to succeed in e-commerce.
Here are some key strategies:
1. Defining your target audience
The first step in starting an e-commerce business is to define the target audience. It’s important to identify the characteristics of your ideal customers, such as age, gender, location, interests and buying habits. By knowing the target audience, companies can better target their marketing efforts and offer products or services that meet their needs.
2. Market research
After defining the target audience, it is important to carry out market research to understand the e-commerce landscape in Portugal. This includes analysing the competition, identifying market trends and assessing business opportunities. Market research allows companies to make more informed decisions about their e-commerce business.
3. Choosing market niches
Another of the first steps in starting an e-commerce business is choosing a market niche. It’s important to identify a specific segment where there is less competition and a significant demand for products or services. By choosing a niche market, companies can better target their marketing efforts, choose good keywords and offer a unique value proposition to their customers.
4. Types of Sales Channels
In e-commerce, there are different types of sales channels that can be used.
Some examples include:
- Own online shop: This is the option that offers the most control over the customer experience and brand image. However, it requires a greater investment in time and resources.
- Marketplaces: Platforms such as Amazon and eBay allow sellers to sell their products to a very wide audience. However, competition on these marketplaces is very high and sellers have to pay commissions on sales.
- Social networks: Social networks such as Facebook and Instagram can be used to promote products and services and drive traffic to the online shop.
5. Website and online shop creation
The creation of a website is essential for any e-commerce business, especially for those who opt for a type of business with its own online shop.
The website must be attractive, and the online shop must be easy to navigate and offer customers a pleasant shopping experience.
Companies should invest in responsive design, which adapts to different devices such as smartphones and tablets, and ensure that the checkout process is simple and secure.
6. Choice of platforms
There are several platforms available for creating and managing an online shop. Companies should choose a platform that meets their needs and offers features such as inventory management, integration with payment systems and analysis tools. Some examples of popular platforms include Shopify, WooCommerce and Magento.
7. Digital marketing
Digital marketing is fundamental to the success of any e-commerce business in Portugal. Companies should use different digital marketing channels, such as SEO, SEM, email marketing and social media, to reach their target audience and promote their products or services.
8. Fulfillment and Transport
Fulfillment, or order management, is also an important aspect of e-commerce. Companies need to ensure that products are stored correctly, packaged properly and delivered to customers on time. In addition, it’s important to choose a reliable transport service and negotiate competitive rates to ensure customer satisfaction.
This can be done “in-house” when the volume is still in its infancy, but the best solution is to outsource in order to enjoy better storage and transport conditions and reduce operating costs.
9. Customer service
Customer service is important for building customer loyalty and increasing sales. Companies must offer quality customer service, responding to customer queries and requests quickly and efficiently.
This is also a service that can be entrusted to specialised or fulfilment companies.
10. Data Analysis
Analysing data is fundamental to making strategic decisions about the e-commerce business. Companies should use data analysis tools, such as Google Analytis 4 (GA4), to monitor the online shop’s performance, identify opportunities for improvement and optimise marketing campaigns.
11. Legislation, regulations and taxation
In e-commerce, it is essential to comply with applicable legislation and regulations. This includes issues such as customer data protection (GDPR), compliance with online security standards and respect for consumer rights. Companies must always be up to date on the laws and regulations in force and ensure that their business is compliant.
Taxation in e-commerce is also a complex and ever-changing issue. Companies selling online in the EU must be aware of VAT rules and take steps to ensure compliance.
In the case of e-commerce in Portugal, it is also necessary to be aware of the Tax Administration’s rules, especially with regard to certified invoicing.
Conclusion
E-commerce in Portugal offers a great opportunity for Portuguese and foreign companies to expand their business and reach a wider audience. By following the strategies described in this guide, companies can increase their chances of success in e-commerce.
