Spain is the fifth largest economy in Europe, with a high rating for doing business and a predominantly urban population, offering numerous growth opportunities. Consider Spain if you’re looking to get a foothold in the Mediterranean markets and take advantage of well developed and widely used ecommerce.
After reading this guide you will understand the opportunities presented by Spain and how to take make the most of them, as well as have a general understanding of Spain’s place in the global balance of powers and why this affects businesses.
2 Expanding business to Spain
When planning how to grow your business abroad, it’s important to consider the current climate of the market you’re planning to enter.
Spain is the fifth largest economy in Europe and one of the largest economies in the world by purchasing power parity (the cost of goods and services assuming the different currencies are of equal value). With a population of 46.4 million, GDP growing at 3.2% annually and a per capita GDP of $26,643, Forbes lists Spain as the 29th Best Country for Business.
Important sectors of Spain’s economy include: wholesale and retail trade, transport, accommodation and food services. Spain’s main export partners include France, Germany and the UK, and its main import partners are Germany, France and China.
3 Quick facts and advantages of doing business in Spain
The percentage of online retail sales accounts for only 4.8% of its total retail sales, meaning most people are going into stores for retail shopping
Ecommerce leaders in Spain include Amazon.es (871 million euros), Elcorteingles.es (651 million euros), Zara.com (371 million euros), PC Componentes (271 million euros) and Vente-privee.com (176 million euros)
About 65.5% of the population are internet users
Ecommerce is used by around 50.6% of the population and is expected to hit 65.9% by 2027
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 Spain.
A typical online shopper in Spain is between 25-54 years old. Online shopping is most popular among 35-44 year olds
80% of the Spanish population resides in urban areas, allowing for easy delivery
Popular online shopping categories include fashion, toys, hobby and DIY, and electronics and media
Spanish consumers are likely to purchase when delivery is free, online pricing is lower than bricks and mortar locations, returns are hassle-free and secure payment options exist
Spanish consumers are likely to purchase if a brand has a strong social media presence (Facebook, Twitter or Instagram), is broadly reviewed online and is popular
Secure payment options and credit card options are preferred, followed by PayPal and cash on delivery
90.7% of Spanish shoppers participate in ecommerce, and its infrastructure is effective and well developed
5 Fulfillment models
The majority of cross-border ecommerce of Spain comes from Italy and other EU countries (totalling over 92% of cross-border transactions). 56.5% of ecommerce transactions in Spain occur on foreign sites. When purchasing cross-border, Spanish consumers are more likely to purchase form Germany, France and the UK than any other EU country. When purchasing outside of the EU, Spanish consumers are more likely to purchase from the United States and Canada. Spain is currently ranked 23rd by World Bank Logistics in terms of performance on global trade logistics.
Spain could be used as a destination from which to fulfil orders to European consumers. However, it is important to evaluate localisation, as many EU consumers prefer to shop in their native languages. As part of 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.
Consider Barcelona, Madrid and Valencia for intra-Spain fulfilment. All of these locations are close to densely populated areas and are attractive destinations for logistics.
Small parcel carriers
Most mail sent within Spain takes about three days to arrive. The post office in Spain (Correos) uses a number of different shipping methods based on timing and destination. Common small parcel carriers include:
Less-than-truckload (LTL) and Full truckload (FTL) carriers
- DB Schenker
7 How to start doing business in Spain
When weighing up your move into the Spanish 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 Spanish, 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 the regions you’re targeting.
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 Spain. 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. 10 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.