In early 2020 we were sure that the COVID pandemic changed our lives forever. This seemed a horrific situation for the world economy.
People were forced to close their businesses within almost all niches. We were frightened, many lost their family members, and we saw absolutely empty streets. We realized Covid-19 can happen to anyone in any country and I’m not an exception.
Two years later the Russian conflict against Ukraine made millions believe that the pandemic was not a disaster of the scale we imagine. Ukraine plunged into a crisis Europe has not seen since WW2. As of April 24th, over 5.2 million Ukrainians have now fled their country since the invasion according to the United Nations. Over 6.5 million people were displaced within Ukraine.
As a digital agency that has been working with digital business in Ukraine since 2004, and also as an agency with our main office in Kharkiv, the city which has seen daily bombing by Russians for almost two months, we decided to analyze how the war affects the Ukrainian eCommerce market. This mini-research unfortunately can demonstrate how the customer behavior, product demand, and the state of large eCommerce businesses as a whole can change if a war were to come to your country (which we obviously hope will never happen).
Before we move to the research, we should say that 80% of Promodo employees left their homes to save their lives. The core share of clients was forced to stop any digital promotion.
But our experienced team continues to do work on international projects and to continue the company and the economy in Ukraine. Please let us know if you have any digital marketing challenges! We would be happy to discuss our future cooperation
Data Collection Method
We analyzed four eCommerce niches:
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- Home appliances & electronics,
- Automotive (Wheels & Rims),
- Baby and Kids,
- Women’s Clothing
relying on Google Analytics reports of the most popular eCommerce websites in Ukraine. For a comparative analysis, our Web Analytics department selected three weekly intervals from the end of January 2022 to early April 2022. Since comparison of day-to-day indicators might be unrepresentative as well as month-to-month indicators due to the high rate of change.
- Green period. January 1 – February 6. During the period conflict had not escalated.
- Red period. February 28 – March 3. The worst phase, right after the invasion.
- Yellow period. March 28 – April 4. An extremely optimistic period during the war, when progress began to improve or restore the situation.
We will demonstrate the dynamics of sessions, revenue, transactions, average purchase value, transaction rate, Google Ads budget, revenue share by channels and regions, sales by category, and revenue by category.
Ukrainian eCommerce lost 83% of sessions in one day
Before February 24th, the Ukrainian eCommerce market grew rapidly. In 2020, the market share of eCommerce reached 8% of retail (+45% year-to-year). To compare, the average YoY growth within Eastern Europe was 46% that year. Western Europe’s growth rate remained at 4 percent.
On the day of the Russian invasion, all online stores lost 82.7% of sessions on average. That week we noticed a minor growth.
From mid-March the trend changed into positive and we could see a significant increase in sessions.
This can partly be explained by referring to the emotional stages of people during a war.
- Anxiety, fear, panic
- Anger, irritation
- Apathy, depressive symptoms
The last stage of apathy comes on average on the tenth day of a war. After prolonged stress Ukrainians entered the phase of stabilization which means they act more thoughtful. Tens of thousands of people become volunteers, helping the Ukrainian army and needy people. Millions were forced to flee their homes with nothing, so reaching a more safe place they buy things, including online.
The rise of sessions in the Automotive niche can be proven by the season since in early March it’s time to change winter tires for summer ones. Another factor is that many people who still have good summer tires cannot get to them and are forced to buy new ones, although they did not plan to do so before.
Unprecedented 92% eCommerce revenue drop
While the lockdown reinforced the eCommerce penetration in almost every European country, the war has the power to destroy everything we have built. During the first week, we see how Ukrainian online retailers lost almost all their revenue, by 92% on average.
This data doesn’t demonstrate the scale of the disaster as we can see only their web reports. Behind the scenes, we realize how many employees lost their jobs or left their workplaces, warehouses, physical stores, and delivery transport were demolished, and what unaffordable expenses still remain.
In middle-March we see the growing revenue which lets us cautiously predict positive trends. However, we discern that the losses as of early April are still huge.
Much the same situation we can see in the transaction report. The clothing niche suffered the most as these goods are not essential. However, we can notice a 1264.5% surge in transactions a month after the invasion. We believe that this situation may change significantly when it gets warmer outside since many people who fled didn’t take summer garments with them.
At the same time, the conversion rate was almost back to normal a month after the invasion. Except for the Automotive rate which CR increased due to the seasonality.
The Russian war against Ukraine demonstrated to online businesses how it’s essential to constantly invest in your organic traffic and increase brand awareness. Just one month showed these two channels can keep you afloat if you are forced to optimize your budget.
The average order value fluctuates from niche to niche
Despite a significant decrease in traffic, the average order value in the Home Appliances and Baby & Kids niches has grown. Perhaps customers made expensive purchases as a way to invest money or being afraid of the price increase or supply shortages.
As for the Automotive and Clothing niches, the average order value decreased. This is due to the fact that customers tend to save money by covering mainly basic needs.
All Google Ads campaigns in Ukraine were stopped on February 24th
All retailers in Ukraine expectedly made a decision to stop their ad campaigns from the very morning of the first day of the invasion. The following week we traced that some campaigns were resumed, however as for mid-April, eCommerce retailers don’t risk investing their money in Google Ads.
Today Ukrainian eCommerce websites are gradually resuming ad campaigns and returning to work in relatively safe regions or in war regions with affordable postal delivery.
People need mobile batteries, which is essential when you are seeking refuge in a bomb shelter
Let’s overview of what happened to the category of household appliances and electronics during the war.
Immediately after the invasion, the demand for mobile batteries and external batteries increased noticeably, which is predictable in a period of dislocation to safe areas, limited access to power sources, and power outages in settlements.
By the end of March, we saw the demand for goods that are necessary for work and life stabilized, and the demand for mobile batteries decreased. At the same time, a significant decline in purchasing activity in all categories of household goods. Clearly, customers are saving money, since many of them have lost sources of income or decreased financial opportunities.
Car seat purchases jumped by 70%
The overall condition of the Baby & Children niche was less prosperous than household appliances, but by March it began to recover. Generally, customers buy everything the same as before the war started, including toys since children need entertainment in these difficult times.
As for significant remarks, the volume of car seats for children increased by 70% compared to the pre-war period.
What other product categories grew in March 2022 in Ukraine
In addition to the Household appliances & Electronics, Baby products, Wheels & Rims and Clothing niches are discussed in detail, here is a list of categories that showed a positive trend in March 2022.
- Construction and building materials. Goods for the restoration and strengthening of destroyed housing, plumbing, autonomous gas equipment, and temporary sleeping places.
- Hunting and tourism. Goods for personal safety, survival, and orienteering.
- Adult products. Demand for the entire category has increased. The volume of sales of alcohol and cigarettes also has grown significantly.
- Auto consumables and accessories.
- Pharmacies. Medicines for first aid, sedatives, painkillers, and antivirals.
- Health and beauty. Pads, condoms, soaps, shampoos, toothpaste, body and hair care products, cosmetics, and deodorants.
- Pet food and suppliance.
What Could This Mean For Europe?
This horrific war forced the Ukrainian eCommerce market to face an unprecedented economic disaster. However, as a whole country, they fight for freedom and independence working under inconceivable tension.
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