Europe’s e-commerce landscape is experiencing a major transformation, as highlighted in the Tradebyte e-commerce report, which identifies shifting growth patterns across various regions, product lines, and digital discovery channels.
The report, titled “E-Commerce in 2026,” indicates that the industry is not witnessing a “slowdown,” but rather a significant “redistribution” of activities. This alteration is reshaping the competitive landscape for brands, retailers, and marketplaces.
According to Tradebyte CEO Matthias Schulte, “The story of e-commerce in 2026 is not one of slowdown, but of redistribution.”
Regional Growth Dynamics
Although Western Europe remains the leader in gross merchandise value (GMV), accounting for more than 73% of the expected GMV in 2025 from Germany, France, Belgium, the Netherlands, and Switzerland, the highest growth rates are emerging in different areas.
The Tradebyte e-commerce report reveals that Central and Eastern Europe experienced a remarkable 59% increase in GMV, while Nordic countries reported a 37% rise, establishing themselves as the fastest-growing regions within Tradebyte’s network.
Smaller European markets, such as Luxembourg, Norway, Cyprus, Greece, and Portugal, also enjoyed increased GMV growth of over 100% in 2025. This impressive growth is largely attributed to marketplace expansions and the growing importance of cross-border fulfillment.
The insights are based on transactional data sourced from over 1,000 brands and more than 90 retailers utilizing the Tradebyte platform, supplemented by third-party industry research and expert analysis.
Matthias Schulte explained: “Our position at the intersection of brands, marketplaces, and retailers allows us to see shifts in demand and performance as they happen. We’re tracking how growth is moving across regions, categories, and channels, and it’s clear that brands that understand where demand is heading, and can operate with speed and precision, are the ones pulling ahead.”
Disparate Category Performance
The report points out stark contrasts in category performance, with underwear emerging as the fastest-growing segment, showing a 45% increase. Beauty products followed at 16%, while sportswear saw a 10% growth.
Despite fashion being the largest overall category, its growth is increasingly driven by practical and value-oriented products rather than traditional fashion trends.
Returns Impacting Profit Margins
The study also highlights how return rates are becoming a pivotal element affecting profitability across markets. In the UK, the average return rate is around 14%, while in Germany, Switzerland, and Austria, rates exceed 50%.
Given these disparities and their implications for margins, many retailers are expected to discontinue free returns by 2026. This change will place greater emphasis on accurate sizing data, fit information, and high-quality product content to minimize returns.
Evolving Discovery Channels
Consumer product discovery now occurs across multiple marketplaces, social platforms, and AI interfaces, with algorithms playing a critical role in driving visibility on these channels.
Tradebyte’s findings suggest that demand is increasingly generated within digital environments before customers even reach individual product pages.
The Importance of Quality Data
For brands, having structured product data, real-time inventory, and consistent pricing is essential for securing algorithmic rankings and expanding across various markets and channels. These capabilities are also vital for compliance with upcoming regulations such as the Ecodesign for Sustainable Products Regulation (ESPR) and Digital Product Passports.
AI’s Expanding Role in E-Commerce
Artificial intelligence is taking on a broader role in areas like forecasting, pricing strategies, stock management, and content generation. While consumer acceptance of AI shopping tools is progressing slowly, AI mechanisms are already significantly shaping which products appear to shoppers.
The report notes that pricing optimization is one area where the impact is particularly strong relative to the effort involved. Additionally, brands utilizing AI for content generation have reported sales increases between 5% and 15%, alongside reductions in return rates of 5% to 20%.