The digital landscape in Eastern Europe has long been a focus for PayU. The explosive growth of e-commerce across the region over the past year is thus hardly a surprise. With growing internet penetration and rising levels of consumer wealth, e-commerce was already on fast growth trajectory even before the pandemic in markets like Poland, Romania, and the Czech Republic, which together represent a population of nearly 70 million. In this way, the pandemic has only supercharged developments which were already brewing under the surface.
Across the European markets we analyzed, e-commerce spend in the digital goods segment is growing the fastest in Romania, according to external data. Between 2019 and the end of 2021, spending on digital goods in Romania is expected to have increased by 54% – a testament to how quickly Romanian consumers are adopting digital products and services. Government-led efforts to encourage digitization across the Romanian economy have been complemented by private sector investment to improve digital consumer interfaces, making the online experience better for customers and helping to unleash pent-up digital demand.
The Czech Republic also remains a significant contributor to e-commerce growth in Eastern Europe, despite its relatively small market size. External data predicts huge growth in e-commerce spending on digital goods in the Czech Republic, with market values reaching nearly $200m USD by the end of 2021, up 33% on 2019 levels.
According to external data, Poland’s projected growth in e-commerce spend on digital goods between 2019 and 2021 is second only to Romania’s, growing at 39%. By the end of 2021, spend in the sector is expected to reach $615m USD. Data from PayU’s payments platform in Europe showed 36% growth in year-on-year spend on digital goods in Poland between 2019 and 2020.
Russia and Turkey
Despite a lower rate of growth, the market for digital goods in Russia also remains vibrant. By the end of 2021, spend in the sector is expected to reach $1.41bn USD, with data from PayU’s Russian platform showing a 28% increase in Russia between 2019 and 2020.
In Turkey, total e-commerce spending on digital goods is expected to have jumped 52% over 2019 levels by the end of 2021, reaching $879m USD.
South Africa was one of PayU’s standout markets within the education sector in 2020, with average transaction values on our platform nearly quadrupling.
Across the digital goods vertical, e-commerce spending is projected to grow by 46% between 2019 and the end of 2021, reaching $336m in total spend. South Africa still trails Nigeria as Africa’s largest market for digital goods, but the levels of growth indicate a bright future for this sector.
According to external data, average year-on-year growth in the digital goods segment in Colombia stands at 14%, which was lower than many of PayU’s other Latin American markets.
However, this is one instance where the PayU platform provides an important counterweight to external projections. Across the digital goods segment, our platform in Colombia saw significantly higher growth in 2020 (62%) both from existing as well as new merchants, as more consumers flocked to digital offerings.
Brazil and Mexico remain the largest Latin American markets in terms of absolute value, at $3.16bn USD and $2.1bn USD, respectively.