E-commerce Payments Trends

Portugal’s e-commerce market is steadily expanding, with younger citizens driving growth


Portugal’s e-commerce market is compact, but shoppers are increasingly turning to e-commerce for their fashion and technology needs, and are determined to find a bargain

Key Takeaways

Portugal’s business-to-consumer e-commerce market has been growing steadily, and is expected to continue to grow to 2023. Younger demographics dominate the market, with fashion and technology key market segments. 

Cards and open invoicing via Multibanco dominate online payments. International merchants offering card payments with Multibanco as a secondary method can therefore access the vast majority of the Portuguese online shopping population.

International merchants benefit from the country’s tendency to prefer international sales platforms to shop. Global e-commerce trends such as Black Friday are also gaining traction in Portugal. 

Portugal 2020

Portugal’s e-commerce market has witnessed double digit growth since 2017, driven by increasing numbers of citizens going online to shop for the first time.1 The percentage of Portuguese who have used e-commerce hit 39 percent in 2019, up 2 percent on 2018.2 As a result, e-commerce now accounts for 4.4 percent of total retail in the country.3

In Portugal, men (40.9 percent) are more likely to shop online than women (36.7 percent). Younger age groups dominate e-commerce adoption—the age group 25–34 has the highest online shopping penetration at 71 percent, followed by 18–24s at 62.3 percent.4

International online shopping events, including Black Friday and Cyber Monday, are gaining ground in Portugal, with sales up 792 percent on Black Friday 2018 compared with average daily sales volumes. Over half (56 percent) of Black Friday sales were for apparel and footwear. The next most-popular categories were technology (49 percent), perfumes and cosmetics (24 percent), appliances (21 percent) and toys (16 percent).5

 

Single-digit sales growth expected post-COVID-19 

  • The Portuguese business-to-consumer e-commerce market is worth EUR6.1 billion (US$6.8 billion). Growth is forecast to drop to a compound annual growth rate (CAGR) of 7.8 percent to 2023,6 with Portugal’s economy hit hard by restrictions on tourism and travel in 2020 due to COVID-19.
  • The average annual online basket spend in Portugal is EUR1,513—just below Spain, and on a par with major e-commerce market Germany.7 This figure, however, is dwarfed by Europe’s highest online spenders, the UK (EUR3,615).8
  • Portugal is developing its own online shopping culture. 'Online Shopping Day', the Portuguese version of Black Friday, was launched in 2011. In 2019, 245 online brands joined the annual initiative. Nine out of 10 reported a significant increase in sales.9  

 

Mobile Commerce Tipped for Double-Digit Growth to 2023

  • Mobile commerce currently takes a 37 percent share of the overall business-to-consumer e-commerce market,10 at EUR2.4 billion in annual sales.11
  • Going forwards, mobile commerce is expected to grow faster than overall e-commerce, at a compound annual growth rate of 15.4 percent to 2023, to become a EUR4 billion market by that point.12
  • In 2019, 81 percent of households had access to the internet in Portugal, up 1.5 percent on 2018. Lisbon, at 83 percent, has the highest internet penetration rate across the country.13

 

Desktops Remain Preferred E-commerce Access Option 

  • Smartphone penetration is good at 74 percent.14 This rate is similar to neighboring Spain (72.5 percent) but lower than major e-commerce economies such as the UK, Germany and France.
  • The most popular device to access e-commerce in Portugal remains desktops (62 percent), followed by smartphones (35 percent) and tablets (2 percent).15 When using mobile commerce, apps are preferred over browsers, with 54 percent of sales taking place via an app.16
  • The most popular e-commerce websites indicate Portuguese citizens like to research and to find a bargain: price comparison site olx.pt is most popular, followed by marketplace worten.pt and price comparison site custojusto.pt. AliExpress comes in fourth.17 Other major sites by sales volume are Amazon.com and Amazon.es, Zara and marketplace fnac.pt.18

 

Open Invoice is Portugal’s Primary Online Payment Method

  • Domestic scheme Multibanco has led to open invoicing being the preferred online payment method in Portugal. The system launched in 1985 and allows users to settle bills and invoices post-purchase at ATMs. All major Portuguese banks participate in the scheme.19

  • Card is the second-most popular payment method, accounting for 19 percent of payments.20 Debit cards, at 2 per capita, are in higher circulation than credit cards, at 0.85 per capita.21 High debit card penetration means the average consumer is likely to own at least one card, making non-card methods of payment optional.

  • Digital wallet providers Paysafecard and PayPalTM have collaborated with Multibanco to allow users to add credit to their digital wallet accounts using Multibanco.22 Digital wallets are expected to grow to take a 19 percent share of the payments market by 2023.23 PayPalTM, with a market share of 8–12 percent, is the most-used brand. Other digital wallets present in the market include MB WAY, MEO Wallet and Masterpass.24

 

China and Spain are Key Overseas Shopping Destinations

  • Cross-border shopping takes 23 percent of the overall e-commerce market in Portugal, with six out of 10 online shoppers having already made a purchase from abroad.25
  • China is the most popular country to shop from, followed by neighboring Spain. The UK comes in third place.26 Spain offers a similar language and faster shipping, while UK and China sites both offer vast product inventories and a sophisticated user experience.
  • As a European Union member, Portugal is subject to EU rules surrounding import tariffs. China has been making efforts to boost trade relations with Portugal, signing multiple new cooperation deals in late 2018.27

 

Portuguese Government Backs E-commerce as Route to Economic Growth

 

  • Regulation/trends
    The government and the national e-commerce association, ACEPI, are promoting e-commerce to citizens and domestic merchants. The state runs the Digital Commerce Programme, an initiative to encourage online commerce, and the ACEPI provides Portuguese small to medium enterprises with tools to create e-commerce sites.28
  • Barriers or benefits to e-commerce market entry
    No local entity is required. There are no currency or foreign exchange limitations.29

Portuguese consumers have ongoing concerns regarding security problems. As the market develops, online fraud remains an issue.30 Merchants may wish to consider offering Portuguese language options to reassure shoppers.

  • Factors driving the cost of payment acceptance
    The cost of accepting primary online payment method Multibanco is higher than the average cost of accepting cards. PayPalTM is more expensive than Multibanco.31

The European Commission has capped interchange on consumer debit and credit cards to 0.2 percent and 0.3 percent respectively.32

 

J.P. Morgan has analyzed 34 e-commerce markets to decipher the trends and challenges driving global e-commerce in 2020. To access our insights on a country-by-country basis, click here.

 

1. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Edgar, Dunn and Company via IDC, 2019.
2. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Edgar, Dunn & Company via Eurostat, 2020.
3. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ACEPI, 2019.
4. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ACEPI, 2019.
5. portugalresident.com, November 2019. ‘Black Friday and Cyber Monday – situation in Portugal.’ Accessed July 2020. 
6. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ACEPI, 2019.
7. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
8. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
9. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ACEPI, 2019. 
10. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via O Observador Cetelem, ECOMMERCE 2019.
11. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company and WPL, 2020.
12. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company and WPL, 2020.
13. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ACEPI, 2019.
14. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via ACEPI & Marktest, 2020.
15. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via O Observador Cetelem, ECOMMERCE 2019, 2019.
16. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via O Observador Cetelem, ECOMMERCE 2019, 2019.
17. similarweb.com, June 2020. ‘Top sites ranking for e-commerce and shopping in Portugal.’ Accessed July 2020.  
18. statista.com, June 2019. ‘Most popular online stores in Portugal in 2018, by e-commerce net sales.’ Accessed July 2020.  
19. boacompra.com, April 2018. ‘Multibanco: The most popular payment method in Portugal.’ Accessed July 2020.  
20. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
21. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Banco De Portugal, 2018.
22. shifter.sapo.pt, May 2018. ‘PayPal e Multibanco passam a entender-se e dispensam cartão de crédito.’ Accessed July 2020.  
23. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.
24. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.
25. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Eurostat, 2020.
26. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020 and IPC, Cross-Border E-Commerce Shopper Survey 2018, 2019.
27. channelnewsasia.com, December 2018. ‘Portugal to cooperate with China to create 'new Silk Roads' of trade.’ Accessed July 2020.  
28. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.
29. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company 2020.
30. portugalresident.com, November 2019. ‘Black Friday and Cyber Monday – situation in Portugal.’ Accessed July 2020.
31. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.
32. J.P Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.