Why should you start a dropshipping business in Luxembourg?

The ecommerce market

• Luxembourg's ecommerce market is estimated to be worth USD 1,146.00 million by 2023 (Statistia, 2023).
• The ecommerce market has been growing steadily and is expected to see a compound growth rate of 7.2% between 2023 and 2027 (Global Data, 2022).
• Online shopping has a 13.6% share of Luxembourg's retail market and will increase by an average of 6.9% to 17.8% by 2027 (eCommerceDB, 2023).
• 60% of Luxembourgers prefer to make an online purchase from Germany if buying cross-border (Statista, 2022).
• Only 19% would buy online products from France (Statista, 2022).

The online behaviour of Luxembourgers is difficult to measure due to the small size of the country. Unfortunately, this nation is rarely included in European ecommerce reports or surveys. The large portion of immigrants from other European nations may also be the reason that cross-border online shopping is so popular in Luxembourg.

Product categories with high sales

Luxembourg's most popular categories of consumer goods as per ecommerceDB, 2023:

• Fashion (34.2%)
• Food and personal care (25.6%)
• Toys, hobby, DIY (14.3%)
• Furniture and appliances (13.2%)
• Electronics and media (12.8%)

Rising number of internet users

According to Data Reportal, 2023, almost every citizen of Luxembourg has an internet connection. The national usage rate is 98.7%, compared to the global average of 64.4%.

Statistique reports that in 2021, these were the types of devices used to access the internet:

• 90% smartphone
• 62% laptop
• 45% tablet
• 41% PC
• 38% other devices (e.g. games console or TV)

In 2022, the vast majority of Luxembourgers accessed the internet once a week, including every day (95%), with nearly all surveyed saying they used it on a daily basis (92%), as per data from Statista, 2023.

Use of smartphones

The younger generations in Luxembourg prefer to access the internet via smartphone. Statistique found that in 2021, 97% of 16- to 24-year olds prefer to use their mobiles to use the internet, and 63% use their laptops. This compares with 73% of 65-74-year-olds using their mobiles for the internet and 52% using their tablets.

According to Post Luxembourg, smartphones in the Grand Duchy are mainly used for:

• Messaging apps (90.7%)
• Social media (88.4%)
• Online shopping (69.4%)
• Entertainment and video (67.2%)
• Other, including maps, video games, and financial services

Logistics

The logistics system in Luxembourg is substantial and efficient, says Britannica. The road network in Luxembourg is small but well-maintained. The railway lines with high-speed trains are a major transportation system for the population and provide postal service to neighbouring countries. Major players in Luxembourg's logistics and transportation industry:

• Post Luxembourg
• UPS
• DHL Express
• FedEx
• Kuehne + Nagel
• Deutsche Post

Dropshipping is an online retail business model. It is an accessible and low-risk business strategy as it allows you to sell goods online without ever handling the warehousing, packaging, or shipping. A dropshipping supplier will store the goods in their warehouse, and once you have a sale on your ecommerce website, the order is sent directly to the supplier to pack and ship on your behalf.

To set up a dropshipping business, you need to use a supplier that has a dropshipping programme, such as dropshippingXL by vidaXL. This programme is beneficial for its flexible cancellation policy, zero joining fee, zero commission on your sales, and no contract.

Luxembourg has relatively low competition in the ecommerce market. The main rivals would be cross-border retailers in France and Germany. Although the population is small, there could be interesting potential to start a dropshipping business in Luxembourg when taking into account the high internet penetration rate, high numbers of smartphone users, and frequent online shoppers.