The Irish online sector is expanding at a rate that's nine times faster than the general economy, according to a new study.
Digital marketing agency Wolfgang Digital's latest Online Economy report shows that Irish ecommerce sites saw 45% growth in online revenue for the second consecutive year in 2016.
With retailers enjoying very healthy growth of 24%, travel websites in particular charged ahead with a massive 79% expansion. Overall traffic to Irish ecommerce websites was up 17%.
The study, which analysed traffic, revenue, devices used and geo-location for retailers with a combined 2016 revenue of nearly €300 million, also notes that smartphones have taken over as the device of choice when accessing the web.
Some 45% of website traffic comes from mobile phones, versus 42% on desktop and 13% on tablet. This is the first year mobile traffic has exceeded desktop traffic.
Since launching in late 2016, Google Shopping has already become a top performing online revenue driver. Study participants who’ve adopted the service generated 30% more revenue in the final quarter of last year than those who did not.
Facebook's new conversion-focused ad format Dynamic Product Ads (DPA) also made a noteworthy impact. Launched in the second half of 2016, early adopter study participants reported DPA campaigns generated the best revenue figures they have seen from Facebook yet.
Alan Coleman, CEO of Wolfgang Digital, said:
"Irish ecommerce websites once again showed extraordinary levels of revenue growth in 2016.
"We can expect this rampant growth to continue. Online spend represents 6% of the Irish economy. In the advanced UK market, online’s share of spend is as high as 16%.”
On the downside, the share of retail revenue coming from shoppers outside of Ireland declined sharply, from 36% in 2015 to 19% in 2016.
With the majority of international shoppers to Irish online retailers coming from the UK, the swing from strong pound to euro in 2015, to weak pound to euro in 2016 played a major part in this decline.
”With the finer details of a post-Brexit EU yet to be ironed out, there are some early indicators as to how a post-Brexit Irish online economy might look if online retailers switch their focus to the lucrative European market.
“As the €153bn UK market e-commerce market becomes less accessible to Irish e-commerce websites, the €500bn European market has to become a priority.
"The twin factors currently making the European market increasingly attractive to Irish business are the EU’s drive to enhance the 'Digital Single Market' and the fact that our competitors in the UK, arguably the world’s most advanced digital media market, are now floating further and further away from the valuable European market."