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No doubt times have been tough in Europe. Britons are so concerned about paying their bills they are selling their possessions (46%), buying lottery tickets (12%), and entering competitions (42%) according to the J.Walter Thompson austerity index released August 8. It’s not just bad in the UK, 90% of the Spanish and French are worried about making ends meet.

Times have been tough for the two e-tail giants in Europe as well,, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY). CNBC’s Jim Cramer characterized eBay Inc (NASDAQ:EBAY) as, “… the U.S. company that complained the loudest about European weakness,” in his segment on companies possibly benefiting from a European recovery. On its second quarter earnings presentation the company commented on the macro environment that, “Europe (was) slower than we expected, impacting both PayPal and Marketplaces.”, Inc. (NASDAQ:AMZN), Inc. (NASDAQ:AMZN)’s second quarter was also affected by European weakness with net international sales only up 13% compared to robust US net sales growth of 30%.

Ready for a recovery
Despite these discouraging results, in 2012 of 820 million Europeans, 250 million were e-shoppers and that percentage is expected to grow exponentially with the European Union pushing for a doubling of online sales from 2011 levels. Europeans average spend was 1,243 Euros and the fastest growing segments were eastern Europe, followed by Southern Europe but all of Europe saw double-digit growth in e-shopping. (See enlightening infographic here.)

Forrester Research expects online commerce to grow 12% annually in Europe through 2016 with much faster rates in southern Europe. Of interest in their report is that showrooming is growing as a phenomenon in Europe. Bricks and mortar retail prices aren’t sitting well with people who are taking in lodgers (4%) or making their children take jobs (4%) as the austerity index details.

Any recovery would be good news for eBay Inc (NASDAQ:EBAY)’s Marketplaces (Fixed Price, Auction, and Motors), its more challenged division. Marketplaces still makes up half of revenues with second quarter reporting 120 million active users worldwide. Marketplaces is expected to grow by only 14% and PayPal will grow by 22% as CEO John Donahoe predicted at an analyst day in March. Analysts have less sanguine expectations for 15% 5 year EPS growth yoy.

Most of the bull case for eBay Inc (NASDAQ:EBAY) has centered around the success of PayPal, especially PayPal as a mobile wallet. While PayPal only generates 42% of revenues for eBay Inc (NASDAQ:EBAY), in the second quarter those revenues grew 21% year over year. These increasing European e-commerce trends bode well for PayPal in particular.

Pay Pal has an expanding global presence supporting several European currencies including the euro, pound sterling, and Scandinavian currencies. For the last seven quarters PayPal’s international segment has comprised 51% of total PayPal revenues. International revenue from PayPal came in at $827 million in the second quarter growing by 21% year over year.

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