The internet is still growing as a sales channel. The growth is strongest within e-commerce for daily consumer goods, which grew by nearly 90 per cent last year. Using your phone as a purchase tool has jumped in a year: already one-fifth of online shoppers make purchases with their smartphones.

International e-commerce has also continued to grow. In usability, Finnish online stores might not be losing to foreign stores as three out of five stores evaluated as the best by users were Finnish.

According to a survey carried out by the Finnish Commerce Federation, the digital retail product purchases of Finns grew by 8 per cent compared to the previous year. The value of the domestic and international online purchases was already 11 per cent compared to the entire Finnish retail sector, and 20 per cent compared to the department store and specialty goods trade. All in all, Finns made digital purchases totalling almost EUR 4.9 billion.

Jaana Kurjenoja, Chief Economist at the Finnish Commerce Federation, says that the growth in e-commerce is no longer dependent on a growing number of buyers as digital channels are already a part of normal spending. New online buyers are relevant only in the older age groups.

“Consumers are, however, buying more often than before and in bigger quantities. Of course, in some product groups, such as daily consumer goods, even the number of buyers is growing quickly,” Kurjenoja describes.

The e-commerce for daily consumer goods grew by a staggering 88 per cent, but it’s still less than half a per cent of the entire daily consumer goods trade, including VAT.

Mobile purchasing is gaining ground

Almost a third of online purchases are made using a mobile device (a smartphone or a tablet); a fifth are made on a smartphone. The phone is used to make 28 per cent of clothing purchases online. When the majority of Finns use their mobile to stay online, it’s only natural that the number of purchases made using a mobile also grows.

Despite the strong growth, Finland is not at the top of mobile purchasing. In Japan and the UK, already more than half of online purchases are made using a mobile device.

“Stores’ own applications are accelerating the growth of consumers’ mobile purchases. In addition to websites and online stores that are well optimised for mobile devices, applications that entice the consumer to buy give a competitive edge. They should be constantly developed,” says Kurjenoja.

Finns enjoy digital buying

A Finnish consumer heads abroad more often than before when making digital purchases. 54 per cent of the shopping stays in Finland, whereas last year, Finland’s share was 59 per cent. Fashion and spare parts and accessories for cars are especially popular purchases from abroad: more than half of the euros spent on online shopping goes abroad.

This can also be seen from the list of online stores Finns use the most, where five out of the fifteen most popular stores are Finnish. The issue isn’t whether the Finnish trade sector can build good and functional online stores. Out of the ten online stores evaluated as the best, half are Finnish, with Varusteleka and Dermosil at the top.

Consumers evaluated all the online stores they’ve used with an average score of 8.1 on a scale of 1 to 10. Men’s clothing and shoe stores receive the lowest scores, as the need for—and lack of—online support is strongly highlighted.

“Finnish stores are perhaps unfairly criticised for not being able to build upscale digital channels. According to our research, consumers don’t always consider the big international online stores, such as AliExpress or Amazon, as the best,” Kurjenoja explains.

Even though there is plenty of technical know-how and insight, it’s tough competition for Finnish trade as the international online stores and market platforms don’t have the same costs, such as real estate taxes. Chinese e-commerce is additionally aided by the state in transport costs.

“The least that Finland could do is to immediately remove the exemption from taxes that imported products with a value less than EUR 22 currently enjoy. We shouldn’t wait until 2021 when the EU directive related to tax exemptions will be applied. This is what Sweden has done. Since the beginning of March, it is obligatory to pay VAT on all imported products entering Sweden from outside the EU VAT area, regardless of the price of the product,” Kurjenoja says.

Additional information: Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation, tel. +358 (0)40 820 5378.

The Finnish Commerce Federation represents commerce—the largest sector of economic life. Commerce employs around 300,000 people in Finland. The Federation has around 7,000 member companies and represents both retail and wholesale commerce in industry policy and labour market lobbying. www.kaupanvuosi.fi