Hungary is an ideal location if you want to expand your eCommerce activities. There are almost 8 million Internet users, which is about 80% of the country’s population, while Internet penetration is also about 80%. The number of active online customers is estimated to be around 3.2 million, and the number is constantly growing. Data collected by the International Monetary Fund suggests that GDP based on Purchasing Power Parity is 284,266 million in Current Int$, while GDP (PPP) per capita is 28,910 Int$, with a real GDP growth rate of 3.20%.
The growing potential of online selling
Online selling gains more and more popularity each day. Top product categories include electronics (mostly computers and home equipment), toys, and presents. However, the greatest growth in Hungarian eCommerce is expected from the sale of fast-moving consumer goods, including food and toiletries.
While local businesses usually operate their own webshops, many international eCommerce websites are also present in Hungary. The top platforms include eBay, Alibaba, and Booking.com, as well as Amazon.com. To enter the Hungarian market, you might consider checking these platforms first to see which one fits your offers or products best, with special regard to the buyers they attract, traffic volume, and competition.
Thinking about local consumers
The number of Hungarian visitors to your online store can be greatly increased by local marketing and SEO activities. These should include translating your product descriptions and marketing materials in Hungarian, as the majority of Hungarian nationals prefer using their mother tongue also when looking for products to buy. Keep the preferences of your intended customer in mind when you localize your online store and plan your marketing activities, and also decide accordingly which advertising platforms to use.
One of the important aspects of online selling in Hungary is providing appropriate payment, delivery, and checkout options to your potential customers. Even if your product is attractive to them, they might abandon their carts if they do not find convenient currency conversion and their preferred or trusted payment methods. The Hungarian currency is the Hungarian Forint (HUF), and popular payment methods include credit card payment and PayPal.
A common reason for potential customers to abandon their carts is the price of shipping. Striking a deal with reliable international shipping or parcel forwarding service can get you cost-effective prices, which in turn gives you a competitive advantage. An option for order tracking is also attractive to many buyers, while many of them prefer picking up packages at public drop-off points instead of waiting for home delivery.
Bearing mobile users in mind
Optimizing your online store should definitely include catering to mobile users. The number of people using their phones to surf the web is constantly growing: currently, mobile traffic is just as prevalent as desktop traffic. Accordingly, the mobile shopping experience you provide should be flawless in order not to use customers to competitors. Most recently, popular measures include integration with SimplePay, the online/mobile payment tool of Hungary’s biggest bank, OTP.
Company registration and setup
You may also easily enter the market by setting up a company in Hungary. Company formation in Hungary takes only 4-5 business days after the application is submitted, which can also be done via a power of attorney. You must visit Hungary only for the opening of the company bank account, which must be done within 8 days after the company is registered. That done, you can start operations including international trading right away since your company is immediately issued an EU VAT number as well as a Hungarian tax ID.
The benefits of Hungarian company formation include the option for setting up the company on your own, without the obligation to involve a local partner, and if you decide to make Hungary your regional headquarters, you can take advantage of the Central-European location and the good infrastructure. And If you’re moving to Hungary for business, you can be eligible for the Hungarian residence permit.
Before you decide to enter the Hungarian eCommerce market, you might want to look for appropriate tax advice in Hungary. Taxation for distance selling in the EU in general is riddled with where and how to pay how much VAT, and your actual profits may vary greatly depending on where your products are manufactured, stored, and delivered.
Surveying your existing practice, your conditions, and your goals before you start selling in Hungary will let you seek expert advice on how to make your Hungarian operation as profitable as possible.