Online sales: Ukraine ecommerce 2023 Analysis

Table of Contents:

1. Ukrainian economy before the war vs. Ukrainian economy in 2023
2. E-commerce report, i.e. what are the characteristic features of the Ukrainian market?
3. Courier services in Ukraine
4. Ukraine sales – sell to Ukraine with Global24

Ukrainian economy before the war vs. Ukrainian economy in 2023

The population of Ukraine exceeded 43 million people before the war (2022). In 2021, 65% of the population used the Internet and 44% shopped online. The online sales volume was estimated as over one billion dollar. The most popular online shopping categories then were media and electronics, fashion, furniture and interior furnishing, while the average income per one buyer exceeded USD 190 annually. Perhaps the Ukrainian economy in the area of e-commerce did not look overly impressive when compared to Poland or the Czech Republic, but it recorded the largest growth rates.

https://scinn-eng.org.ua/ojs/index.php/ni/article/view/396/164 

The outbreak of the war has caused a rapid decrease of e-commerce turnovers. This was the result of the territorial changes and destruction caused by the war, as well as the tremendous wave of refugees. At the end of 2022, almost five million of Ukrainian refugees under formal protection were registered just in Europe.

According to the data of Statista, the sales volume decreased by up to 90% in the first weeks of the war; the decrease of the cost and income values per one buyer were also noted at its beginning.

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However, what is very interesting is the fact that, despite the decrease of average spend per capita, the cart value has paradoxically increased, reaching USD 42.25 at the end of 2022. The meestpost.com specialists estimate that this was due to the limited availability of products, so the delivery time and availability were decisive for the recipients, while the price was of lesser importance.

E-commerce report, i.e. what are the characteristic features of the Ukrainian market?

The current political situation makes the picture of the Ukrainian e-commerce market significantly different from the markets of the Central and Western Europe. The Last Mile Experts report indicates that, after the outbreak of the war, the most desired products included essential goods, such as food, drugs, footwear, clothing or hygiene articles and pet products. However, along with the retrieval of territories and relative normalization of living conditions, as well as the needs related to rebuilding, the demand for building and finishing materials, household appliances and electronics grows. It should be noted that we are talking here about consumers from a country ravaged by war, with a huge decrease of GDP and the citizens’ buying power, so the demand is focused mainly on the cheapest offers from any particular product category.

Send parcels to Ukraine with Global24: handling parcels sent to Ukraine

According to the estimates in the report, the e-commerce sales value will reach the level from 2020 by the end of 2023 and exceed the record, pandemic level from 2021 in 2024. Although the analysts from Statista are more cautious with their forecasts, they also indicate that the trends are upward and the return to the previous turnover values is a pretty realistic perspective.

https://www.statista.com/outlook/dmo/ecommerce/ukraine#revenue 

A quote from Oleksiy Taranenko, Director of Development of Nova Post (currently, the largest courier shipment operator), should be noted here:

“There are 30 million of active consumers in Ukraine. Ukrainians have started to buy online even more frequently than before the war, because not all offline stores have been able to retrieve and replenish their stocks on time. This is a strong incentive for the development of e-commerce and express shipping.” 

When it comes to the sales channels, marketplace platforms are in the lead, just as before the war. In respect to the popularity, bounce rates and time spent on the website, OLX holds the first position (B2C and C2C sales), while Proma and Rozetka lead amongst the platforms dedicated mainly to B2C sales.

https://www.similarweb.com/top-websites/ukraine/e-commerce-and-shopping/
Last updated : July 1, 2023

Over 28 million people use social media there, which is equal to 65% of the entire population. YouTube (28 million users), Facebook (nearly 16 million) and Instagram (16 million) are in the lead. The significance of Tik Tok is increasing, as it has become a more noticeable medium with over 10 million users.

Courier services in Ukraine

Similarly to the entire Ukrainian economy, the courier and postal services market has also been shaken by the war turmoil. According to the Last Mile Experts report, this industry noted a year-over-year (2022 over 2021) decrease in respect to both the amount of shipments (-17.4%) and income (-8%). The war destruction results in huge future costs of restoring the destroyed infrastructure and machine park. Many smaller companies have suspended their operations, while the domestic operators who are actively operating include Nova Poshta (New Post), Ukrposhta and Meest. These large players also noted significant decreases in 2022 and only Nova Poshta managed to maintain a relatively stable level of operations and dominant market position with 85% share in the parcel shipment volume.

It is worth knowing that Nova Poshta has 24,000 sites and customer service points, including 14,000 parcel lockers. Nova Poshta is also a leader of innovation – for example, parcel lockers powered by rechargeable batteries have been introduced due to power cuts. The branches of Nova Poshta have also been equipped with StarLink terminals, which provide uninterrupted access to the Internet and systems required for efficient customer service.

The shutdown of air transport and disruptions on overland routes have initially made the cross-border commerce complicated. This was particularly hard for the global players (UPS, DHL, Fedex), who base their operations on air shipments and fast premium deliveries. However, the growing demand for the products which are in short supply on the local market have led to quick increases in parcel imports, particularly due to transit through Poland, and clear positive trends occurred as soon as June 2022, thanks to, amongst other things, restoring the possibility to order shipments to Ukraine at AliExpress, NOTINO, ANSWEAR, LPP or MODIVO. This trend can be easily confirmed by reviewing the annual summary, where the common decreases on the domestic market are partially countered by the increases in international shipments.

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Ukraine sales – sell to Ukraine with Global24

After the testing phase, we are proud to inform you that you can expand your sales on the Ukrainian market with our parcel handling in Ukraine! This works the same as in other countries where we have our warehouses, that is:

1. Your Customer from Ukraine orders a product on your website or marketplace;
2. You send a collective package of products to our warehouse in Brimingham or we collect them from you;
3. We transport the goods to our warehouse in Ukraine;
4. From there, the parcels are delivered to your Customers by the leading courier – Nova Poshta;
5. If your customer wishes to return the product, they can use the delivered LABEL, which allows them to send a return package free of charge at the postal or courier service point;
6. We will send all the returns to the address of YOUR WAREHOUSE in UK.

Why should you choose our solution over others? Because we provide you with a Ukrainian shipping and return address, which significantly simplifies the ordering process for the Customer from Ukraine. The delivery itself is completed by Nova Poshta, which is the leading postal service operator in Ukraine (over 65% market share), present there for over 22 years. The cherry on top of the cake is the quick shipping time from 3 to 5 days and the fact that the price already covers all costs, including customs clearance.

Feel free to contact us!

Summary

It is hard to analyze the e-commerce market in a country with such a complicated situation caused by military operations. However, looking just at the numbers, one can dare to forecast an upward online commerce trend in Ukraine. Will it come true for sure? Nobody knows, but even the essential goods have to be delivered somehow.

We would like to thank Last Mile Experts for the possibility to use their REPORT on the Ukrainian market. Last Mile Experts (LME) are a highly specialized consulting company focused exclusively on the last mile logistics aspects in the courier express parcels (CEP), postal and e-commerce sectors.

Their goal is to help CEP companies, postal service operators, e-commerce players, prospective investors and other stakeholders in enhancing their performance, operations, organization and technologies, as well as in developing their strategies or performing mergers and acquisitions.

To learn more about Last Mile, visit their website or contact them directly at: info@lmexpert.com.