Romania’s decade of digital transformation

PayU Romania Country Manager Elena Gheorghe talks about digitization and e-commerce in one of Europe’s fastest growing online consumer markets.

In early 2020, before the coronavirus upended our lives and took the expansion of e-commerce to another level, Romania’s newly elected government created the Authority for the Digitalization of Romania (ADR). 

 

The ADR was tasked with leading the digital transformation of the entire Romanian economy and society – and while it’s too soon to point to its direct impact, it is expected to bring huge benefits to Romania’s e-commerce ecosystem while continuing to advance the adoption of new technologies. 

 

Last year was more than just another year of growth for e-commerce in Romania. With one of Europe’s highest growth rates for e-commerce, what we are currently witnessing in Romania is a complete commercial transformation. But for those of us, like PayU, who have been a part of Romania’s e-commerce landscape all along, we know this is just an acceleration of a trend that was there all along. 

 

How has the pandemic impacted e-commerce and online payments in Romania?  And what are the challenges and opportunities going forward?  As part of The Next Frontier, PayU’s recent report on e-commerce opportunities in emerging markets, we reached out to Elena Gheorghe, Country Manager for PayU Romania, to share her thoughts on the present and future of Romanian e-commerce. 

 

Scroll below to read Elena’s responses and be sure to check out our other recent conversations with leaders in some of the world’s top emerging e-commerce markets. 

local insights

E-commerce drivers in Romania

Innovation in response to the pandemic

As the pandemic began to be part of our lives, those of us in the e-commerce world found ourselves in front of an important wave. We had to act rapidly and choose if we want to be in front of or behind this wave. 

 

During the period, many shoppers in Romania became online shoppers for the very first time. Over 1 million cards were saved through PayU . And over 300,000 new cards made a first online payment just in the first months of the year and just from one of the top local banks. They made the first online payment and realized how simple, fast, and safe the whole process is. 

 

Companies which previously viewed e-commerce as an aspiration realized during the pandemic that they urgently needed a process to offer their customers an integrated online experience. That’s where we at PayU come into the equation. 

 

New products to improve the e-commerce and e-payment experience

Within PayU, we’ve contributed to the innovation taking place in Romania’s e-commerce landscape by offering new e-shoppers a great experience through our products. One of the products is Instant Money Back, which offers the e-shoppers the opportunity to receive their money back in less than 30 minutes after the product return process is finalized. Another is Pay-by-Click, which allows customers the option to pay with one click. 

 

Growing digital competencies of users

Romania is already a country with great internet penetration (66% of all Romanian households have a fixed internet connection). Last year we saw a big jump in traffic usage, both in terms of desktop internet (+33%) as well as mobile internet usage (+12%). People are spending more time online and are closer to online shopping. From an e-commerce perspective, the local banks are also investing in their mobile applications to offer their clients a better online experience which contributes to bringing more customers online.  

 

In all of this, we at PayU see not just an opportunity, but also a great responsibility. Last year we developed a campaign with the largest online player on the market to contribute to educate new e-shoppers. And we were active through all of our structures and platforms, helping both online merchants and consumers to navigate the new e-commerce normal. 

Romania

Challenges and opportunities for Romanian e-commerce

What do you see as some important challenges for e-commerce and e-payments in Romania currently?

In 2020 we witnessed a level of growth in e-commerce which had previously been predicted to take multiple years. Within PayU, we can say that we were prepared for this and managed to adapt to be an important pillar for the whole e-commerce market in Romania. 

 

Offering a great first impression of online payments is a must to retain new online shoppers in particular. At the same time, with the wave of new e-commerce consumers in Romania, some challenges have begun to come to light.   

 

Logistics couriers for example face challenges when talking about both automation and the capacity of their human personnel. And online merchants need to take seriously the issue of the overall user experience of their websites.  

 

If not managed properly, all of these challenges could result in a bad e-commerce experience particularly for first-time consumers, which might lead at least some of these new shoppers back to offline commerce. It is the most important time to build consistent and fast trust and show both the new and existing e-commerce customers that online shopping is all about safety, rapidity, and simplicity. Unfortunately, there is no room for half measures.   

 

As global merchants’ standards are rising and more local e-shoppers are buying across borders, there is also pressure on local merchants when speaking about using technologies to automate the online shopping process. From AI to cross-channel advertising management solutions, all of this is happening already in other markets and needs to be properly implemented by merchants in Romania. 

 

What are the big opportunities for Romanian e-commerce and e-payments looking ahead?

In Europe, 3DS 2.0 will become mainstream in 2021 providing a great degree of card safety with an upgraded user experience. According to our estimations, we expect overall conversion rates of over 90% and even 95% with biometric authentication. 

 

It is a trend which will contribute to building trust and reputation for online payments, but each opportunity must be seen with a sense of responsibility. Online shoppers must know the main benefits and e-commerce players like PayU need to make important efforts to educate them on why it’s a good idea to use biometric authentication for example rather than the two passwords option.  

 

Locally, we also see opportunities which are coming from the central authorities. As of last year, Romania was last in the EU when it comes to digitization of public administration. The government thus have on their public agenda measures which will help the whole local e-commerce ecosystem. If implemented, this will really help to unleash even more new technologies. 

 

Finally, our country has the lowest rate of small and medium-size business (SMBs) selling online, according to the DESI index. Only 11% of Romanian SMBs sell online and according to market estimates, less than 50% of these have websites which are optimized for mobile commerce. In this context, these local SMBs seem to be a focus for both national and EU authorities. It expected they may have at their disposal grant funds which can be invested in the acceleration of their digitization strategies. 

Download PayU’s Next Frontier report

Get further insights on the e-commerce landscape across Romania and nearly 20 other emerging e-commerce markets where PayU operates around the world. 

 

Combining external sources with local data directly from PayU’s payments platform, our report also provides a window into the payment ecosystem across the countries surveyed, leveraging our experience as a leading payment technology platform offering merchants a single global solution for emerging as well as established markets. 

 

Fill in the form to download our report and learn more about the fast-moving digital landscape in some of the world’s most exciting growth markets for e-commerce. 

 

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