The European B2C online subscription market

Subscription Payments | 10.04.2014

We’ve all heard about the transition to subscription models and the rapid increase in online subscription service providers. But how big is the subscription market, really?

It’s fairly easy to find data on the B2C online sales market in Europe and worldwide, including growth rates and breakdown by type of purchase. On the other hand, it is hard to find data for the subscription market. However, it is generally agreed that subscription models are the future of commerce, that they encourage customer loyalty, and that they offer merchants greater stability.

“Revenue streams from a subscription model are more predictable than a perpetual model, which is a feature that investors love,” according to Gartner.

So how big is the online subscription market? We’ve attempted to gauge the size of this market using all the information we have about the European e-commerce market. We estimate that it is a market worth €62 billion, or 22% of the total e-commerce market. To this should be added about €1.4 billion in donations to charitable organizations made by subscription. These figures are an estimate, and we welcome any comments our readers might have on the matter.

European B2C online market 2012
(EU 28)
Online revenues
estimated
(€bn)
Subscrip. model
penetration
(%)
Online subscrip.
revenues
(€bn)
Telecom mobile, Internet access 35.5 80% 28.4
Media content press, books, music, film subscriptions 20.0 50% 10.0
Utilities water, gas, electricity 12.0 80% 9.6
Computer services server rental, hosting, storage, IT securiy 7.4 80% 5.9
Insurance life and other premiums 19.9 20% 4.0
Travel public transport & toll roads 7.4 40% 3.0
Gaming digital games 4.0 10% 0.4
Electronics consumer electronics 42.9 0,5% 0.2
Travel hotel and air travel 78.6
Fashion clothing 21.8
Household appliances B2C 10.9
Other FMCG, home services 16.7 2% 0.3
Total   277.0 22% 61.8
Charitable orgs. 6.8 20% 1.4

SlimPay estimates – March 2014

It appears that the growth of the online subscription market is at least equal to that of the e-commerce market. We would like to fine tune our estimates, but that is an even bigger challenge. We’d appreciate your help!

Gartner,  New Subscription Delivery Model, Gene Phifer, Tom Austin, John Rizzuto, July 2013

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