Romania is second-largest digital commerce market in CEE, McKinsey says
Romania’s digital commerce market stood at EUR 9.8 bln in 2021, making it the second largest market in CEE, after Poland (EUR 26.7 bln) but before Czechia (EUR 9.1 bln). The achievement takes place in a wider context of digital development in Europe and within Romania itself, according to a new McKinsey & Company report titled “Digital Challengers on the Next Frontier.”
The report analyzes the opportunities presented by the digital economy in ten economies of Central and Eastern Europe, small and medium-sized countries with strong potential for fast digitization. The three main components of the digital economy considered in the report are: digital commerce (online retail spending on goods & services), ICT (the value of spending of governments and companies across all sectors on hardware, software, infrastructure, and related services) and offline spend on digital equipment (PC, smartphones, IT infrastructure, Cloud, etc.).
The region’s digital economy totaled an estimated EUR 124 bln in 2021, with digital commerce representing around EUR 68 bln of the sum. The ten CEE countries, Romania among them, could reach a digital economy worth EUR 330 bln by 2030, with digital commerce being the main driver of growth.
Romania’s own digital economy was estimated at EUR 14.8 bln in 2021, or 6% of GDP, in the same report. The value is shared between digital commerce (EUR 9.8 bln), expenditures on ICT (EUR 3.5 bln), and offline spending on digital products like PCs or smartphones (EUR 1.6 bln). McKinsey analysts reckon that the sector could be worth EUR 52 bln (9.6% of GDP) by 2030.
ICT showed promise in Romania, growing at around 8% annually between 2017 and 2021. However, investments in this sector are still low when compared to countries such as Poland or Czechia. As Romania’s ICT infrastructure develops, it may become an important driver of growth.
Digital commerce, however, is the clear driver of Romania’s digital economy, representing 66% of it. The segment grew by 17% annually, almost doubling in value between 2017 and 2021. The share of SMEs selling online more than doubled as well, from 7% to 17% in the same period. The spectacular growth transformed Romania into the second largest digital commerce market in the CEE, not to mention the third-largest digital economy.
There is, however, still room to grow. The average expenditure on digital commerce per capita and the digital commerce penetration rate in Romania are some of the lowest in the region. Romania’s digital commerce per capita was around EUR 506 in 2021, lower than the ones in Czechia (EUR 849), Slovenia (EUR 866), or Lithuania (EUR 1,064). Digital represents just 14% of the total retail segment in Romania, the rest being offline commerce. With 14% penetration, Romania has one of the lowest rates of digital commerce relative to total retail in the CEE.
The use of innovations delivering ultra-convenience (payments, omnichannel, fast delivery and returns, and data-driven individualization) could help Romania double its digital commerce market size.
The report shows that the most significant categories for digital commerce in Romania are home goods and electronics (39% share of digital commerce), transportation services (31%), and apparel (14%). However, during the pandemic years, the fastest category growth was seen in groceries, which grew from EUR 123 mln (2% share of digital commerce) in 2019 to EUR 389 mln in 2021 (4% share of digital commerce).
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