Why Does E-commerce Still Account for Only 10% of Retail in Ukraine — and What’s Holding It Back?

Ukrainians spend an average of up to six hours a day on their smartphones. Online meetings, messaging apps, utility payments, and booking a taxi in just a few taps have all become part of everyday life.

Yet despite this high level of digital adoption, online shopping still accounts for only around 10% of Ukraine’s retail market. For a country with one of Europe’s most advanced digital banking ecosystems and a wide range of digital public and financial services, this may seem surprising. By comparison, in most European countries, e-commerce already represents 20–25% of total retail sales.

So why do Ukrainians, who embrace digital technologies in so many aspects of life, still shop online less frequently than their European neighbors?

Basic needs come first

According to Deloitte Ukraine, consumers have become increasingly pragmatic in their spending decisions. Today, up to 84% of household budgets go toward essential expenses. Russia’s full-scale invasion and ongoing economic uncertainty have made people far more cautious: major purchases are often postponed while everyday necessities take priority.

Groceries, medicines, household essentials, and cleaning products are still primarily purchased offline. Interestingly, online shopping is growing fastest in categories associated with comfort and self-expression. The share of clothing and footwear purchased online has increased from 15% to 17%, cosmetics from 15% to 18%, and electronics from 17% to 18%. While these figures are not dramatic, they point to a clear and consistent trend.

From a behavioral perspective, many online purchases are driven by emotion. After a stressful day, consumers browse social media or online marketplaces, discover a product they like, and decide to treat themselves or someone close to them. This makes speed critical: see it, want it, buy it. Every additional obstacle between those moments increases the likelihood that the purchase will never happen.

The gap between intention and purchase

Visa’s research supports this pattern. Although 89% of Ukrainians prefer shopping via smartphone, 73% have abandoned an online purchase at least once because the checkout process was inconvenient. For 43%, repeatedly entering card details was a significant frustration, while more than half say they would shop online more often if payments were simpler.

Consumers are clearly willing to shop online—but only if the experience is effortless. Price and product selection matter, but so do convenience, speed, and ease of use. Ukrainians actively use digital services and increasingly interact with brands online. However, barriers such as complicated payment flows or previous negative experiences continue to slow e-commerce growth. Several factors could help unlock the sector’s full potential.

Authentic experiences matter more than advertising

According to Deloitte, purchasing decisions are increasingly influenced by recommendations, reviews, and social media. However, the nature of trust is changing.

Standardized ratings and generic marketplace reviews are losing credibility because consumers have learned to recognize low-quality or manipulated content. Instead, authentic user experiences—detailed reviews with photos, videos, and honest descriptions of both strengths and weaknesses—carry far greater weight.

This is why user-generated content has become one of the most powerful sales drivers. Consumers want to see products used by real people in real-life situations. Today’s buyers are well informed, and brands need to communicate accordingly.

Payments should be invisible

As noted earlier, smartphones have become the primary point of interaction between businesses and customers. If Ukrainian e-commerce wants to accelerate its growth, the journey from product selection to payment must become virtually frictionless.

Stored card credentials, Apple Pay, Google Pay, payment links, and one-click checkout are no longer premium features—they have become fundamental elements of customer experience that directly influence conversion rates and consumers’ willingness to complete purchases.

Financial flexibility is becoming equally important. In today’s economic environment, the ability to split payments into installments or use buy-now-pay-later solutions is increasingly influencing purchasing decisions.

Offline is not the competitor

Contrary to popular belief, offline retail should not be viewed as e-commerce’s competitor. The fastest-growing retail markets are those where the distinction between physical and digital commerce disappears, allowing customers to choose whichever shopping journey best suits them.

Today’s consumers want flexibility. They may want to examine a product in-store before ordering it through an app. Or purchase online and collect it at a pickup point. Or return an online purchase at a physical store. For customers, the sales channel matters far less than convenience, speed, and a seamless experience.

This is why the industry increasingly talks not simply about e-commerce, but about phygital commerce—an integrated model that combines the strengths of both digital and physical retail. The fewer barriers exist between these two worlds, the more naturally consumers will move between them.

Businesses need the right financial infrastructure. Growing e-commerce requires more than a smooth customer journey. Merchants also need financial infrastructure that enables them to scale efficiently. Fast settlements, access to financing, automated payment processes, and integrated financial services help businesses expand product offerings, improve operational efficiency, and maintain high service standards.