Updated: Jul 28
- 20+ million Spaniards are shopping online.
The digital advancements in Spain may have come a lot further than you think. 20.3 million Spaniards in the ages 16 to 65 purchase online (48% women/52% men). What's App and Facebook usage is still dominating the social media usage with LinkedIn advancing.
I have been talking to a few investors and startup founders the recent years. For the sake of context they are mostly from the Nordic countries and from the UK. The conversation starts off with them saying that they are looking to maybe expand into Spain.
Long story short, after a few months the decision is often taken to start with an English-speaking market. Fast-forward a few more months the perceived "easier route" has often ended up becoming a costly route, because of all the expected and unexpected competition.
An advice upon embarking on the market expansion journey is often to ”start with a market resembling to your home market.” This is of course good advice and also depends on your risk-versus-reward willingness.
But if both the founding team and the backing investors are really open to expanding into any market(s) that are really needing their product or service, could that mean taking a closer look at a different-looking market, providing it shows high potential in terms of key metrics?
What makes Spain a viable option in the market expansion plan?
Let's go over some relevant facts and numbers that you might, or might not, be aware of:
300Mb/s fiber broadband by 2021
The biggest Spanish cities already have great connection and at a quick speed. The Spanish government is also, in this very moment, making sure that this modern must-have reaches all of Spain, into all the smaller villages with its massive investment in Fiber for everyone.
In March 2018, the Prime Minister of Spain announced plans to ensure that the entire country has access to 300Mb/s fiber broadband by 2021, with an investment of €525 million in the next stage of developments, designed to place the country at the global head in availability of digital infrastructure.
Willingness to pay online
It is still true that cash payments are very common and preferred by many consumers. To make it more convenient and secure to pay online American giants like PayPal and Amazon have done a great job of wining the Spanish people's trust and PayPal stands for at least 10% of all the payments done online.
Recent years Debit and Credit cards usage have gain a lot more traction, implying that the fear of providing your card details to an unfamiliar, digital entity is disappearing.
Now that the e-commerce space is showing signs of maturity, more and more online payments services are quickly being added to the mix in Spain.
Market size online 20+ million paying customers
The IAB report 2019 shows that 7 out of 10 all Spanish internet users are buying online. This equals 20.3 million Spaniards in the age 16 to 65 years, (48% women/ 52% men).
Considering that the amount of Spaniards going online is steadily increasing every year (Internautas) the future potential of online commerce in Spain looks very promising.
EDIT June 2020:
Due to the pandemic Online commerce for April 2020 is up with 40%, Month on Month.
Convenience key driver to purchasing online
Spanish people value social time off screen and many much prefer to interact physically with someone to buy a product or service. However:
Convenience is a very attractive concept and stands for 97% of the driving reason for why Spanish people buy online.
Closely followed by "Product offering" which comes in at 95%. At a close third place (93%) ranks "Price" and on forth place (71%) comes "Trust".
Interestingly, "Recommendation" is the parameter showing the biggest decline compared to the previous year and is only said to be a key driver by 46%.
Facebook and What's App battle first place in Social media
For the startups with an established "magical" digital marketing mix wanting to recycle already well-working ads in Social media onto their Spanish accounts, there is good news.
There is a high social media usage of the usual suspects like Facebook, Instagram, YouTube, Twitter and LinkedIn.
What´s App usage (87%) has been sky high for many years and there is also a high usage of Facebook (90%), Instagram (60%) and YouTube (65%), with a rapidly growing activity for Twitter (55%) and LinkedIn (36%).
Crafted by Caroline Lagergren
What do you need to know about Spain's startup ecosystem? Get this 70 pages, data-rich* report for clarity! (€20): REPORT: Spain's startup ecosystem and digital economy * Packed with names you will want to contact. ;)