2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - Spain Country Insights

SPAIN INSIGHTS REPORT


Although Spain lags some way behind the leading European e-commerce markets of the UK, Germany and France, positive signs do exist. As payment options increase and products arrive faster than before, this highly mobile commerce-enabled market looks set to evolve to become a serious rival to Europe’s top three. To help our clients locate, attract and keep their customers, we have tracked and assessed e-commerce developments in 34 mature and emerging markets around the globe.

Introduction

 

The Spanish e-commerce market is one of the fastest-growing countries in our series*, driven by the rapid acceptance of mobile commerce.1 The wider Spanish economy has been growing at an average pace of three percent since mid 2014, supported by strong domestic demand and the impact of reforms to the labor market enacted in the post-crisis years.Despite solid growth in 2018 however, there should be a slight slowdown in growth to 2.3 percent in 2019.3

 

On the back of an overall positive economic performance, the unemployment rate has fallen sharply to 15.2 percent. Inflation is also recovering quickly, standing at 1.9 percent in 2018.4 These positive indicators are partly why Spain has been one of the fastest-growing e-commerce markets in recent years.5 Spain has also made tremendous progress in the ranking tables, which reflect the considered ease of doing business there, elevating Spain as the best ranked southern European country,6 which should bode well for new e-commerce merchants looking to expand into the market.

 

This document is based on projected figures and is subject to change at any time.

 

Boosting delivery speeds and basket spends are the challenges in this fast-growing market

Although the value of Spain’s business to consumer e-commerce market lags behind France and Germany (with the UK market significantly ahead of all other European markets), it is showing healthy signs of expansion. Of the European countries studied in this report series,* Spain is one of the leaders in terms of e-commerce growth, expanding 19.9 percent in the past year.16 While this prodigious growth will slow slightly, the Spanish online shopping market should still enjoy double-digit development out to 2021, with a compound annual growth rate of 13.5 percent.17 This rise will be driven by strong mobile commerce adoption and rapid expansion and investment in e-commerce by domestic players such as Inditex.18

 

These improvements to the overall Spanish e-commerce experience should help drive up the current low base of expenditure. The average annual online spend, at €1,306,19 is much lower than the European average of €2,185.20 Younger Spaniards are the nation’s most enthusiastic online shoppers, yet the number of items they buy is still low, as they make an average of 3.7 purchases per year. 21 The 31 to 45-year-old age group is next, at three purchases a year. It appears small basket sizes apply across all demographics; 46 to 65-year-olds make two purchases online each year on average.22 These modest figures are perhaps reflective of the historical financial uncertainty created by high unemployment levels, particularly among younger Spaniards. At 33.6 percent, Spain is second only to Greece in terms of youth unemployment rates in Europe.23 However, it also means there is an opportunity for growth as the Spanish economic recovery gathers speed.

International e-commerce merchants enjoy strong Spanish appetite

 

 

Whatever happens to the Spanish economy in 2019, international merchants are already in a strong position to win customers: some 61 percent of Spanish online shoppers have already made cross-border purchases,24 suggesting a ready acceptance of overseas brands and shopping platforms. Popular overseas destinations include China, Germany and the UK.25 Such is the willingness to spend abroad that it accounts for 21 percent of total Spanish e-commerce sales.26 It tends to be low-value items, such as books and music, which are purchased from international merchants.

 

The market is dominated by Amazon.es, which is the number one e-commerce player.27 Domestic giant Inditex, which owns the fashion retail brand Zara, is also a significant player and has the potential to grow even faster over the coming years. Inditex was late to launch e-commerce operations in 2010 and e-commerce sales only account for 12 percent of its revenues.28 This should rapidly change, however, as Inditex’s e-commerce sales leapt by 41 percent in 2018.29

 

Providing expedited delivery, hosting products in international warehouses, or providing Spanish drop-off points for international returns could help such e-commerce merchants scale up their international sales and presence.30 Newcomers to the Spanish market should note that there is relatively low domestic digital talent, following years of high unemployment and low salaries in the IT sector.31

 

 

Fast delivery could become a key differentiator for e-commerce merchants

 

 

The speed of delivery in urban areas is changing consumer expectations and increasing the adoption of e-commerce. As a large country, three-to-five day deliveries are the norm,32 but the arrival of Deliveroo and Amazon Prime in major cities such as Barcelona and Madrid is raising awareness of same and next-day delivery.33 To win over customers within Spain, e-commerce merchants can gain an advantage by providing fast and reliable delivery. Next-day and two-day deliveries, although primarily only offered via Amazon Prime, are becoming more common as logistics companies improve their Spanish operations.34 Major e-commerce merchants are also adopting faster delivery models. For example, Inditex has announced plans to invest in robotics to speed up its e-commerce operations and facilitate same-day or next-day orders.35

 

Android leads the way in an app-happy nation

 

Spain has embraced mobile shopping, which accounts for 38 percent, or €11.5 billion, of e-commerce sales.36 Spanish e-commerce merchants have adapted their offer to suit mobile commerce platforms, and mobile versions of desktop sites are now commonplace.37 As a result, the mobile commerce market is predicted to expand at a healthy 22 percent compound annual growth rate to 2021.38

 

App use is high in Spain, with more than half (52.6 percent) of all Spanish mobile commerce transactions made via this avenue.39 Finessing Android apps is essential for success in Spain. Android is by far the most popular smartphone operating system, with an 88.2 percent market share.40 Apple has, to date, failed to make a significant dent in the Spanish smartphone market – its iOS system is used by just 11.8 percent of consumers and Apple products account for only 8.3 percent of the smartphone market. Instead Samsung, with a 19.5 percent market share, leads, followed by Huawei (19.3 percent), BQ (10.7 percent), Xiaomi (10 percent), and LG (7.3 percent),41 with smaller brands making up the remaining 24.9 percent of the smartphone market. Shopping apps must therefore be optimized for use across a wide range of devices.

 

Spanish consumers tend to search for products on shopping platforms like eBay and Amazon, rather than via individual e-commerce merchant sites.42Hyper-local secondhand goods selling platform Wallapop is the most popular shopping app in Spain, followed by shopping platforms AliExpress and Amazon.43

Card payments lead, but digital wallets on the rise

 

Cards remain the most common way to pay online in Spain, accounting for 43.2 percent of transactions.44 In particular, credit card use is high, with 1.06 cards per capita,45 pointing to a strong demand for consumer credit. As the health of the Spanish economy improves and consumer confidence increases, card issuers will be more willing to lend money on credit cards. Consumers may also benefit from increased competition among financial institutions in terms of the variety of products offered.

 

However, other methods of payment are commonly used in Spain, and the use of digital wallets, in particular, are on the rise. Sales via this method account for 27.7 percent of completed e-commerce transactions.46 Out of the countries included in J.P. Morgan's Global Payments Trends Report series, only Italy’s digital wallet use is higher, at 32.3 percent.47 Spain’s enthusiastic adoption of digital wallets indicates that this method of payment may well rival the use of cards as the primary way to pay online by 2021.

 

New digital wallet options set to shake up the market

 

PayPal® is the most-used digital wallet in Spain, accounting for 20 percent of all additional e-commerce payments.48 However, the Spanish e-commerce market looks set to become an increasingly competitive space for mobile payment providers. Since 2016, Google Pay, Apple Pay and Amazon Pay have all entered the Spanish market and the adoption of these payment platforms could continue to grow over the coming years.49, 50

 

 Spanish app-based payment providers are the ones to watch, albeit they have yet to significantly disrupt the market. Bizum, for example, launched in Spain in 2016 and had an estimated 2.5 million users at the end of 2018.51 Developed by a consortium of major Spanish banks, the app offers instant person-to-person payments between bank accounts. Bizum uses a real-time net settlement model and is integrated into the user’s smartphone banking app. The brand will soon enable e-commerce payments.52

 

 It is worth noting that the revised Payment Services Directive regulations, which are rolling out across Europe, were mandated to enter into force on January 13, 2018. The changes were not enacted in Spain until November 2018.53

Low online fraud in a card and digital wallet-based market

 

 

E-commerce fraud is low, occurring for approximately one percent of online shoppers, which is below the European average.54* This might be as a result of high digital wallet and card use, both of which offer strong online security measures when paying online.

 

However, this low rate could be compromised by shopper behavior: a survey of five Eurozone countries shows that Spaniards engage in the riskiest consumer behavior.55 Asked about their habits in the past five years, 29 percent say they had left their smartphone unlocked when not using it, while 20 percent had used online banking or internet shopping without security software or on a public computer.56

Key takeaways

 

  • Spain is one of the leaders in terms of e-commerce growth, expanding 19.9 percent in the past year57
  • The country has embraced mobile shopping, which accounts for 38 percent, or €11.5 billion, of e-commerce sales58
  • Cards remain the most common way to pay online in Spain, accounting for 43.2 percent of transactions59
  • In particular, credit card use is high, with 1.06 cards per capita60

 

 

Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.

 

* J.P. Morgan 2019 Payments Trends – Global Insights Report series includes the following European countries: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, The Netherlands, UK.

 

 

About J.P. Morgan

 

 

J.P. Morgan offers a full suite of payments services to enable a seamless connection across the payments continuum for clients. We bring our consultative expertise, data-driven insights, and local service around the globe to provide a more unified view of payables, receivables and cash management. Merchant Services is the payment acceptance and merchant acquiring business of JPMorgan Chase & Co. (NYSE: JPM) – a global financial services firm with assets of $2.6 trillion and operations worldwide.i According to The Nilson Report, it is also the top merchant acquirer of e-commerce transactions in Europe.ii

 

 

 

JPMorgan Chase & Co. Q4 2018 Earnings Report 2018.

 

ii The Nilson Report, #1132 May 2018.

Global Payments Trends Reports

International e-commerce success can hinge upon understanding the needs, nuances and growth patterns of individual nations. J.P. Morgan’s Global Payments Trends Reports aims to offer merchants the knowledge they need for global success through in-depth, country-by-country analysis.

For more information, please contact:

Your J.P. Morgan Relationship Manager or visit: https://www.jpmorgan.com/europe/merchant-services/payment-insights

Information contained in this document has been prepared by third parties or obtained from sources which are believed to be reliable; but neither Chase Paymentech Europe Limited nor any of its affiliates warrant the completeness or accuracy of the information contained herein. Chase Paymentech Europe Limited and any of its affiliates shall have no liability to the user or to third parties, for the quality, accuracy, timeliness, or for any special, indirect, incidental or consequential damages which may be experienced because of the use of or reliance on the data or statements made available herein. Third party trademarks, brand names, products and services are only referential and Chase Paymentech Europe Limited and its affiliates disclaims any sponsorship, affiliation or endorsement of or by any such third party.

Chase Paymentech Europe Limited, trading as J.P. Morgan, is regulated by the Central Bank of Ireland. Registered Office: J.P Morgan, 200 Capital Dock, 79 Sir John Rogerson’s Quay, Dublin 2 D02 RK57, Ireland. Registered in Ireland with the CRO under the Registration No. 474128.

Directors: Catherine Moore (UK), Carin Bryans, Dara Quinn, Steven Beasty (US), Eilish Finan

Copyright© 2019

 

1 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ONTSI & CNMC, 2017.

 

2 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

 

3 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

 

4 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

 

5 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ONTSI & CNMC, 2017.

 

6 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

 

7 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

 

8 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via CIA, 2017.

 

9 World Bank Open Data. ‘Spain.’ Accessed December 2018.

 

10 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ONTSI & CNMC, 2017.

 

11 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

12Ecommerce Foundation, Spain 2018 E-Commerce Report, 2018

 

13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Newzoo, 2018.

 

14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

 

16J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ONTSI & CNMC, 2017.

 

17 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

18 Bloomberg.com, March 2018. ‘Zara Owner’s Online Sales Surge Helps Plug Gap as Stores Slow.’ Accessed November 2018.

 

19 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

20 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

21 Ecommerce Foundation, Spain B2C Ecommerce report 2018, 2018.

 

22 Ecommerce Foundation, Spain B2C Ecommerce report 2018, 2018.

 

23 TradingEconomics.com, October 2018 and Eurostat. ‘Spain Youth Unemployment Rate.’ Accessed October 2018.

 

24 PayPal, 2018. ‘PayPal Cross-Border Consumer Research 2018.’ Accessed November 2018. 

 

25 IPC, Cross-Border E-Commerce Shopper Survey 2017, 2018.

 

26 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

27 SimilarWeb.com, September 2018. ‘Top Sites Ranking for Shopping in Spain.’ Accessed October 2018.

 

28 BusinessOfFashion.com, August 2017. ‘Fast Fashion Slow to E-Commerce.’ Accessed October 2018.

 

29 Bloomberg.com, March 2018. ‘Zara Owner’s Online Sales Surge Helps Plug Gap as Stores Slow.’ Accessed October 2018.

 

30Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

31 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

32 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

33 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

34Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

35 Bloomberg.com, March 2018. ‘Zara Owner’s Online Sales Surge Helps Plug Gap as Stores Slow.’ Accessed October 2018.

 

36 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

37 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

38 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

39 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Kantar World Panel, 2017.

41 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Kantar World Panel, 2017.

 

42 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

43 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report Spain 2018.’ Accessed November 2018.

 

44 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

45 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services via ECB Statistical Data Warehouse and Banco de España, 2018.

 

46 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

47 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

48 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

49 TameBay.com, April 2017. ‘Amazon Pay launches in France, Italy and Spain.’ Accessed October 2018.

 

50 BBVA.com, July 2017. ‘BBVA Brings Android Pay to Spain.’ Accessed October 2018.

 

51 BBVAOpen4U.com, July 2018. ‘Leading Platforms in Mobile Payments, the Currency of the 21st Century.’ Accessed October 2018.

 

52 BBVAOpen4U.com, July 2018. ‘Leading Platforms in Mobile Payments, the Currency of the 21st Century.’ Accessed October 2018.

 

53 Lexology.com, November 2018. ‘Spain finally implements PSD2.’ Accessed March 2019. 

 

54 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

 

55 Aite Group, 2016. ‘Global Consumer Card Fraud: Where Card Fraud is Coming From.’ Accessed December 2018.

 

56 Aite Group, 2016. ‘Global Consumer Card Fraud: Where Card Fraud is Coming From.’ Accessed December 2018.

 

57 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ONTSI & CNMC, 2017.

 

58 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

59 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

 

60 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services via ECB Statistical Data Warehouse and Banco de España, 2018.

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