Two months into quarantine, Spain much more digitalized

Updated: Apr 9

- 34% of Spaniards now work from home.

They say humans are creatures of habit. That we can adapt very easily to any circumstances. Two months into the quarantine, it seems that the formerly, very pro-cash, Spanish society is willing to switch to more germ-free, digital payment alternatives.

And remote work is no longer just a phenomenon for secluded groups such as the Spanish startup community. WFH, Working From Home ("teletrabajo" in Spanish) has risen from in average 7,5% of the working population back in 2018, to an average of 34%, in just a couple of months. Maybe surprisingly, a majority wants to continue working from home, even after they are allowed back to their office chairs.

Cash is no longer king in Spain

"Cash is king". Especially when traveling, some annoying friend would always tell me this phrase with a slightly condescending voice. Yet again, I had forgotten to withdraw cash thinking that one of my plastic, squared travel companions would be able to help me out.

So when moving to Valencia about 3,5 years ago, you would think I would have learned to withdraw cash. Especially since Spain has been one European country where cash has really been king for a long time. Ironically, starting a new year, I made a promise to myself to always carry some cash with me and now this is suddenly made almost unnecessary.

This pandemic proves that it is possible for old behaviors to change "over day". For obvious reasons, cash will continue to be a great substitute but there are definite signs that digital payments have, (finally), taken the number one spot and is very likely to stay on that throne.

Veronica López, International Financial Analysts, tells Spanish Cinco Días:

"In Spain, there has been a change of habit that could last over time. Spaniards have started using their cards to a greater extent after the shops, due to Covid-19, have replaced signs with the minimum amount for card payments with signs asking for "plastic money" instead of cash."

As articulated by Spanish El Independiente, the soaring usage of Bizum in Spain is "further proof that electronic payments have been favored during the pandemic, although at the moment, it seems impossible for cash to disappear from the Spaniards' wallets."

Bizum's main use case has been instant transfers between individuals but has now evolved into being used to pay in small stores as well. According to the same article: "Launched almost four years ago by a dozen of banks, this platform has increased its users to eight million at the end of April, mainly due to an increase of interest from online merchants in using this payment system."

EDIT April 2021: Bizum announced having 15 million users, 1/3 of the Spanish population.

34% of Spaniards work remote

The outbreak of the pandemic drastically changed work-life for the average Spaniard from March 14 when the whole country was ordered to stay home as much as possible.

A study made by the Valencian Institute of Economic Research, shows that the total number of employees who worked from home pre-Corona, went from a rather low activity of remote working in Spain, to covering 34% of employed Spaniards, in only two months.

The image below, made by Cinco Diás with statistics from a report by the Bank of Spain, shows that the average percentage of teleworking in Spain in 2018 was 7,5%.

Remote working in Spain went from 7,5% (2018), to 34% in only two months.

These statistics ranked Spain at number 19, well below the European average of teleworking employees (13.5%), and clearly stood out from countries like the UK (23,9%), France (20.8%) and Germany (11.6%).

Was this felt as a brutal change for the working Spaniards?

According to another study by the UPF Barcelona School of Management on "the effects of the confinement and the use of telework on working conditions", the incorporation of telework proved to be less difficult than it first seemed.

The findings of the study, implies that no significant differences for groups divided into gender, age, sector, professional category or size of the company.

Out of the 810 people participating in the study, 89% had to telework from home and the majority (81%), claims to have been able to do it "without affecting the quality of their work".

According to the same study, 66% of the respondents are satisfied with the experience and say; "their productivity has remained or even increased." And more than half of the group, (55% of the polled employees), say they would like to continue working from home even after the obligation to do so.

What does this mean for e-commerce growth in Spain?

The "IAB report 2019", showed that 7 out of 10 all the Spanish Internet users were already buying online. This equals 20.3 million Spaniards in the age 16 to 65 years, 48% women/ 52% men and implies that Spain is a digitally mature market.

When I am reading different post on social media, it seems that Spanish entrepreneurs in general are not all sure that the radical change in shopping behavior, triggered by the pandemic, will actually mean e-commerce growth in Spain, post-Corona.

Will e-commerce in Spain skyrocket for a long time to follow?

Or do Spanish people want to go back to old ways and shop at their physical stores?

According to professor Juan Carlos Gázquez-Abad in Economics and Business Studies, high consumption online channels, in April 2020, have in average 40% more buyers than in 2019, (article in Spanish). He says:

"It is clear that many consumers have had to test the online channel as a result of this crisis, and have realized how comfortable and safe it is for them. This experience will increase the online quota of each client".

Personally, I miss the personal interactions and chit chats with the staff at some of my local stores and I have been waiting with some purchases until I can go there physically.

That said, rest assured that the average person in Spain, although by force of the Covid-19 pandemic, is now more digitally savvy than ever and I am convinced that future e-commerce numbers, for sure, are going to reflect this in several reports to come.*

*I will update this post with fresh data supporting that claim.

Crafted by Caroline Lagergren

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