Italy is the third largest economy in Europe, with a burgeoning ecommerce sector and a hold of 3.65% in the world’s consumer market, offering good opportunities for businesses. Consider Italy if you’re looking to get a foothold in the European market and take advantage of its potential as a distribution centre.
After reading this guide you will understand the opportunities presented by Italy and how to take make the most of them, as well as have a general understanding of Italy’s place in the global balance of powers and why this affects businesses.
2 Expanding business to Italy
Italy is the third largest economy in Europe and the eighth largest in the world by nominal GDP. The per capita GDP is $36,300, and its population of 62 million is concentrated around Rome, Naples and along the Mediterranean and Adriatic Coasts. It is listed by Forbes as the #42 Best Country for Business and #28 in terms of Ease of Doing Business.
Italy’s main industries include textiles and clothing, food and drinks, metals & metal manufactures, chemicals, shipbuilding, pharmaceuticals and medical equipment.
3 Quick facts and advantages of doing business in Italy
- Over 30% of Italians are between the ages of 35 to 54
- Internet usage is more than 68% and mobile usage is over 82%
- Direct-to-consumer ecommerce is growing more than 10% annually
- Italy is ranked 13th in Europe and 21st globally in the Logistics Performance Index
- Turnover from ecommerce in Italy was estimated at €19.6 billion in 2016
- Italy represents 3.65% of the world’s consumer market
4 Customer trends
It’s crucial to think about customer behaviour when expanding in new markets. How does your target customer usually buy products? What’s their preferred method of delivery? The following factors will help you consider how customer trends will affect the way you go about doing business in Italy.
The Ecommerce Foundation reports an annual spend of €938 per ecommerce shopper in Italy, and the average order value is €75
Popular products include clothing, home and garden, media and entertainment, footwear and lifestyle products
Italian consumers purchase mostly from the UK and Germany
Italian shoppers want transparent delivery costs and prefer to know about them early on in the online buying experience. Sellers are more successful when they offer a variety of delivery options
In a survey conducted by Comscore, 97% of Italian consumers say that being able to track their purchase is an essential or nice-to-have
59% indicated an interest in tracking packages via email alerts and 55% were interested in the ability to track packages directly via the retailers website
73% of Italian consumers said that they check a company’s return and exchange policy before purchasing, and 66% said that they’d buy again from sellers who offer hassle-free returns
51% of Italian consumers report a desire to pick up online purchases in-store, and 59% want the ability to buy a product online and return in-store
5 Fulfillment in Italy
Cross-border into Italy
In Italy, ecommerce consumers buy domestically and cross-border (the majority of cross- border ecommerce transactions are attributed to limited availability of Italian products). Studies show that Italian consumers purchase cross-border mostly from other European countries, most commonly Germany and the UK.
You may consider Italy as a location from which to fulfill orders to European consumers. However, it’s important to think about localization, as many EU consumers prefer to shop in their native languages. If you’re in the EU, you can take advantage of EU VAT distance selling rules, which allow you to test various markets without the burdened cost of VAT compliance.
Northern Italy offers strong growth potential for distribution, especially given the increase in freight traffic through its Northern Adriatic ports. Milan is listed as one of Europe’s top 20 distribution markets, ranked 15 out of 30 in regards to infrastructure, accessibility and market access. This is the main region where intra-Italian fulfillment occurs.
Small parcel carriers
- Poste Italiane Group
- TNT Express
Less-than-truckload (LTL) and truckload (TL) carriers
- DB Schenker
- LKW Walter
7 How to start doing business in Italy
When weighing up your move into the Italian market, think about the pros and cons of incorporating a company and the type of company structure that might suit you. You’ll also need to understand the regulatory requirements of ecommerce in Italy, and determine if your product will need any trademark registration. Depending on where your goods are coming from, confirm whether they can be imported, and find a fulfillment center and carriers that provide coverage in Italy.
Market Finder contains a breakdown of the World Bank’s Doing Business Index, where you can get a heads-up about the ease of doing business in Italy. It ranks on a scale of 1 - 190 how easy it is for a business to set up and run a local firm in each of the world economies. Ten topics are assessed to gain the score. These include the ease of getting electricity, the ease of getting credit, and the potential for cross-border trade.
When trading in a new market, it’s good to know the administrative, regulatory, and logistical challenges that may lie ahead. Navigating legal requirements and working out logistics is made a lot easier with Market Finder - find further support and tools including in-depth guides and insights.
Ingram Micro Commerce & Lifecycle Services provides logistics solutions to help businesses connect supply and demand.
The materials provided on the site are for informational purposes only. For financial, tax, or legal advice, consult a specialist.