How Ukrainian
eCommerce Survived
2023

• The niche is showing positive dynamics. In 2023, UAH revenue surged by 17% compared to 2021, while the USD revenue growth marked 2%, respectively. The growth started in Q3. 2023, while substantial changes were seen in Q4. 2023. Still, November USD revenue marked a 7% slump compared to the same period in 2021, while UAH revenue fell by 24%. It is worth noting that in 2023, a top niche player significantly cut down its market share.

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• December 2023 proved much better. The USD revenue growth marked 5%, while the UAH revenue growth reached 32% compared to 2021. In this vein, we assume that many retailers did not limit their Black Friday promotions to the last week of November. This indicates that despite solid purchasing power, domestic consumers are rather sensitive to discount offers. The dynamics also show that Ukraine is transitioning towards the European model where December holidays predetermine sales growth.

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• In 2023, the revenue side stabilized across the niche compared to 2022. In 2023, the niche resonated with its usual seasonality.

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• The average UAH check was 50% higher than in 2021, while the USD YoY growth marked 28%.

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• Since February 2023, retailers' spending on Google advertising has reached the budgets of 2021. Since August, players have started to increase them - in the second half of the year, they grew by 30% in UAH. 2023 USD budgets were 30% lower, though managed to overtop November-December 2021 figures by 11%, respectively.

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• The average cost per click (CPC) in UAH has been growing since July 2023, though CPC in USD has not changed at all.

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• In 2024, the niche competition will get more intense, given CPC growth.

• By income rates, in 2023 the niche grew by 65% in USD. In USD, the niche surged by 85%, respectively. Herewith, one should account for the fact that in 2022 niche players rapidly moved online and showed gradual growth since July 2022. 

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• In 2023, the average check across the niche was similar to 2021. However, it was 50% lower in USD at the dawn of the year compared to the same period in 2021. It was only in May that the average check leveled off and almost reached 2021 indicators.

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• In 2023, the average check in USD dropped by 10% compared to 2021. That is to say, online customers either order a cheaper basket or make more purchases at a lower check.

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• The conversion rate (CVR) in the niche decreased in 2023, whereas revenue and traffic showed rapid growth. This indicates that many users visit niche websites only to monitor prices without ordering anything.

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• Retailers have actively invested in advertising since July 2021. Since the beginning of 2023, the niche has grown steadily and is prone to its own seasonality. By the end of 2023, the budgets were 50% higher than in 2021. 

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• The niche has sped up. We predict that the number of niche players will grow in 2024. Respectively, the cost per click (CPC) will also grow: in 2023 it was 56% lower than in 2021.

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• It is worth mentioning that by contrast to electronics, the share of search campaign types within the niche increased by 5% in 2023. This is logical while the niche brands have worked actively to attract new users.

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• In 2023, the revenue of players in this niche dropped by 41% in USD and 27% in UAH. The niche started its online revival in July 2023, though failed to reach 2021 indicators even in UAH. We estimate the niche as the most pessimistic in the domestic online segment due to forced migration and depopulation.

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• In 2023, the average UAH check grew by 31%, while the average USD check grew by a mere 2%. The number of users decreased by 31%. The seasonality has changed: there was no growth from January to September, while a certain increase in the number of website visitors began only in October.

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• USD ad budgets in 2023 were significantly lower: January 2023 was twice as low as January 2021, and February by 50%, accordingly. Niche players started to reach 2021 figures only in March. A drop in UAH value: January - by 30%, and February - by 20%, respectively. Since March, we have seen budget growth from 6 to 20% compared to 2021 indicators.

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