2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - Netherlands Country Insights

NETHERLANDS INSIGHTS REPORT

 


The Netherlands has made the most of its geographical location and skilled workforce to become a major logistics hub. To compete here, e-commerce players must rival, or better, the high levels of prompt delivery and tailored mobile commerce payment options that are already on offer. 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

 

Despite its modest population size, the Netherlands boasts an e-commerce market that has expanded rapidly in recent years.1 The economy in the Netherlands is going from strength to strength, driven by private consumption and investment.Gross domestic product increased by 2.9 percent in 2017 and 2.8 percent in 2018, and is forecast to grow by 2.5 percent in 2019.3

Employment growth has been solid in 2018, while a tightening labor supply is having a positive impact on wages.4 These developments are contributing towards an increase in disposable incomes and supporting private consumption growth.In turn, the prospects for e-commerce spending are also positive, with double-digit growth expected up to 2021.The Netherlands has embraced online retail with 84 percent of shoppers using this channel,7 and smartphones proving a key driver in this buoyant market.8

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

A small but fast-growing market dominated by domestic brands

 

Even though it finds itself in a position below the leading markets of the UK, France, Germany and even Spain, the Dutch e-commerce market nevertheless stands out for its rapid expansion in recent years. Buoyed by growing consumer confidence and a steadily growing economy, in last year’s J.P. Morgan report it ranked as the fastest-growing business-to-consumer e-commerce market of all the countries we surveyed, posting 22.1 percent year-on-year growth.19

Recently, however, the market has witnessed a shift in gear. While still in double-digit growth, the rate has almost halved.20 Although this is in line with an overall trend across Europe for decelerated growth, in the Netherlands this may also have been impacted by uncertainty surrounding the record 208 days it took to form a new government following elections in 2017.21

Looking ahead, online shopping market growth should prove resilient, with a compound annual growth rate of 11 percent between 2018 and 2021,22 maintaining the country’s position as one of the most dynamic markets out of all those surveyed.* This buoyancy is driven by high rates of internet (95.9 percent)23 and bank account penetration (99.6 percent),24 both of which are well above the European averages.25 Indeed, the Netherlands was ranked as the leading e-commerce market in the world by a recent UN survey, due to its high proportion of online shoppers and large number of pure-play online stores.26

Domestic e-commerce merchants may be the first to profit from this growth. Despite an outward-looking economy, local e-commerce brands dominate sales: Dutch sites Bol.com and Coolblue are the top two e-commerce merchants, followed by Germany’s Zalando.27 Amazon stands in unfamiliar territory, ranked only seventh in the Dutch market. As a selling platform with major reach, Bol.com, in particular, could act as a key gateway for international e-commerce merchants into the Dutch market. In addition, the Netherlands has the highest number of e-commerce shops per capita in Europe,28 so standing out in this crowded market is a challenge.

 

Deliver fast and describe it in Dutch to win over discerning and price-conscious shoppers

 

This high density of home-grown e-commerce merchants has impacted the levels of cross-border shopping, which accounts for just 15 percent of e-commerce sales.29 International merchants that make the effort to specifically target local tastes, national holidays and provide Dutch-language product descriptions may find favor among the Dutch public and boost their search engine optimization rankings.30 Domestic player Bol.com has finessed this approach, adapting the website’s tone of voice and product layout to appeal specifically to Dutch shoppers.31 Key gifting occasions are targeted, including Sinterklaas on December 6.

Fast delivery is a key component of the Dutch e-commerce culture, and quick fulfilment of orders is essential to win over e-commerce shoppers there. Bol.com, for instance, reported an increase in sales of 25 percent for sellers on its site when they provided next-day delivery.32 Over a third of shoppers expect all deliveries to arrive within 48 hours.33

This expectation of fast delivery is a consequence of the country’s reputation for world-class delivery and logistics. The Dutch government actively promotes the Netherlands as an e-commerce logistics hub for the rest of Northern Europe.34  Its strong road, rail and air infrastructure, multilingual workforce and positioning between the three biggest e-commerce markets of the UK, France and Germany, provide it with valuable competitive advantages. This enables the Netherlands to offer late cut-off times for next-day delivery, further improving speeds.

E-commerce delivery methods are even evolving to include delivery by bicycle. In 2018, Coolblue began rolling out next-day delivery of packages by bike across all major cities in the Netherlands, where customers can time their deliveries for within a one-hour slot.35 International e-commerce merchants will need to provide a prompt, tailored delivery service to make an impact in this market.         

Innovation and enthusiasm make the Dutch Europe’s mobile commerce forerunners

 

Smartphone browsing is a way of life for the majority of the Dutch population, with 87 percent of people accessing the internet on their mobile devices, compared to the European Union average of 65 percent.36 Consequently, mobile commerce has grown rapidly in the Netherlands. The country is predicted to be one of the fastest-growing mobile commerce markets of all European countries included in this report series,* with a projected compound annual growth rate of 31 percent between 2018 and 2021,37 by which point mobile commerce is expected to be a €13.3 billion market.38

Various factors support this highly positive prediction. The rise of unlimited 4G bundles in the Netherlands has given smartphone users the ability to spend more time online browsing, which has helped boost mobile conversion rates.39 The rise of mobile banking apps is also pushing mobile commerce growth. Domestic bank transfer brand iDEAL has found great success with its app offering.40 In 2018, half of all iDEAL transactions, the leading Dutch online payment method, were made in mobile banking apps.41 Mobile commerce is also being backed by the development of smartphone-only payment solutions. iDEAL, for example, has launched payments via Quick Response codes. On taking delivery of an item, customers can make payments with their smartphones immediately.42 This allows for fast mobile payment-on-delivery – in keeping with the appetite across central Europe for payment after an item has been delivered.

Bank transfers dominate but cards and digital wallets make major gains

 

The payments landscape in the Netherlands is notable for the relative absence of cards. The frugal Dutch have a culture that does not embrace debt, and many shops in the Netherlands still do not accept credit card payments. The online payments space is dominated by bank transfers, which are used to complete 60 percent of all e-commerce transactions.43 This has in part been driven by the online ubiquity of the domestic brand iDEAL. Developed and launched by Dutch banks in 2005, this online bank transfer payment system dominates, with an estimated 56 percent market share.44

Despite being well-established, iDEAL is not resting on its laurels. Transactions via iDEAL rose by 33.8 percent in 2017, driven by strong usage of mobile banking apps.45 International e-commerce merchants entering the Netherlands should therefore consider adding iDEAL as a payment method. Online merchants report substantially higher conversion rates for Dutch customers (up to 90 percent higher) when they add iDEAL as a payment option.46

The dominance of bank transfers in the Netherlands is expected to be threatened slightly by the rise of both cards and digital wallets. By 2021, bank transfers are expected to account for 58 percent of the online payment market, digital wallets are predicted to grow to take eight percent, and cards a 20 percent share of the market.47

Digital wallets and cards, although accounting for much smaller shares of the market, are in growth. Online card payments are now worth €3.6 billion and are set to grow at a compound annual growth rate of 29.2 percent until 2021.48 Meanwhile, the value of digital wallet transactions is set to increase at a compound annual growth rate of 23.5 percent over the same period.49 PayPal® was the most-used digital wallet option, accounting for six percent of the overall additional payment market.50 Looking ahead, new app-based payment providers may have a better chance at winning market share as the revised European Payment Services Directive regulations come into place, opening up the market. Third-party providers will be able to initiate payments without the need for the customer to use their online bank’s website.

Fraud rates remain stable

 

The country’s fraud rate is in line with the European average, with two percent of individuals experiencing fraud when shopping online.51 Phishing and identity theft are common fraud techniques in the Netherlands.52 One reason could be that Dutch people are relatively more prone to throwing papers or documents with account numbers in the rubbish bin – 22 percent admitted to doing so in a recent survey, which is well above the figure of 12 percent in Germany, for example.53 On a positive note, the general trend in Europe is that chargeback rates are falling and this should be reflected in the Dutch market in the coming years.

Key takeaways

 

  • Looking ahead, online shopping market growth should prove resilient, with a compound annual growth rate of 11 percent between 2018 and 202154
  • The country is predicted to be one of the fastest-growing mobile commerce markets of all European countries included in this report series,* with a projected compound annual growth rate of 31 percent between 2018 and 202155
  • The online payments space is dominated by bank transfers, which are used to complete 60 percent of all e-commerce transactions56

 

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.

 

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.

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

 

i JPMorgan Chase & Co. Q4 2018 Earnings Report 2018.

ii The Nilson Report, #1132 May 2018.

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 Thuiswinkel.org, Nederlandse consumenten besteedden € 22,5 miljard online in 2017, 9 March 2018.

2 European Commission, July 2018. ‘Summer 2018 Economic Forecast.’ Accessed November 2018.

3 European Commission, July 2018. ‘Summer 2018 Economic Forecast.’ Accessed November 2018.

4 European Commission, July 2018. ‘Summer 2018 Economic Forecast.’ Accessed November 2018.

5 European Commission, July 2018. ‘Summer 2018 Economic Forecast.’ Accessed November 2018.

6 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.

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 Eurostat, 2018.

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, 2018.

9 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.

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 CIA, 2017.

11 World Bank Open Data. ‘Netherlands.’ Accessed December 2018.

12 Thuiswinkel.org, Nederlandse consumenten besteedden € 22,5 miljard online in 2017, 9 March 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, 2018.

14 Thuiswinkel.org, Nederlandse consumenten besteedden € 22,5 miljard online in 2017, 9 March 2018.

15 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 Internet World Stats (2017).

16 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.

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 via World Bank, 2017.

18  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 ECB Statistical Data Warehouse, 2018.

19 Thuiswinkel.org, Nederlandse consumenten besteedden € 22,5 miljard online in 2017, 9 March 2018.

20 Thuiswinkel.org, Nederlandse consumenten besteedden € 22,5 miljard online in 2017, 9 March 2018.

21 Guardian.com, October 2017. ‘Dutch parties agree coalition government after a record 208 days.’ Accessed October 2018.

22 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.

23 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 GlobalData, 2017, and World Bank, 2017, and Internet Live Stats (2015 & 2016) and Internet World Stats (2017).

24 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.

25 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.

26 Ecommerce News Europe. ‘The Netherlands rank first on UN’s ecommerce index.’ Accessed December 2018.

27 Twinkle100.nl, September 2018. ‘Bol.com, Coolblue en Zalando bovenaan de Twinkle100.’ Accessed October 2018.

28 Ecommercenews.eu, August 2018. ‘Highest online store density in the Netherlands.’ Accessed October 2018.

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

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

31 Semrush.com, February 2018. ‘International e-Commerce: 19 Experts From 10 Countries Share Their Experience.’ Accessed November 2018.

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

33 Postnord.com. ‘Ecommerce in Europe 2018.’ Accessed November 2018.

34 Hollandinternationaldistributioncouncil.com, October 2018. ‘Cross-Border E-commerce.’ Accessed October 2018.

35 Bike-EU.com, April 2018. ‘1st Large Ecommerce Company Starts Deliveries by Bike.’ Accessed October 2018.

36 CBS.nl, February 2018. ‘The Netherlands leads Europe in internet access.’ Accessed October 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 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report The Netherlands 2018.’ Accessed November 2018.

40 Ideal.nl, January 2018. ‘iDEAL leading payment method on mobiles.’ Accessed October 2018.

41 Ideal.nl, January 2018. ‘iDEAL leading payment method on mobiles.’ Accessed October 2018.

42 Ideal.nl, January 2018. ‘iDEAL leading payment method on mobiles.’ Accessed October 2018.

43 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.

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 Ideal.nl, January 2018. ‘iDEAL leading payment method on mobiles.’ Accessed October 2018.

46 Ideal.nl, January 2018. ‘iDEAL leading payment method on mobiles.’ Accessed October 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 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.

50 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.

51 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.

52 Ecommercewiki.org, March 2018. Ecommerce Foundation, ‘Ecommerce Report The Netherlands 2018.’ Accessed November 2018.

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

55 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.

56 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.

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