Finnish e-commerce taking over a bigger share of the market

In recent years, online purchases made by Finns have heavily increased. At the same time, the increase in the share of Finnish retail stores selling digitally has been stronger in Finland than in any other country in Europe. As for the share of retail businesses selling digitally is double in Finland compared to Sweden, while Iceland is the leader by a clear margin.

These facts are indicated in the e-commerce survey conducted by the Finnish Commerce Federation. The survey explores digital purchasing in Finland as well as the most popular online stores among Finns.

“The strong digitalisation of Finnish commerce is good news. On the negative side, online e-commerce still doesn’t reach the international customer base. We are one of the least exporting European countries together along with countries such as Poland and Hungary”, says Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation.

In 2019, Finns made digital retail purchases in the domestic and international market totalling EUR 4.5 billion. The growth since the year 2018 in euros was 12%. Prior to the strong spreading of the coronavirus in Europe, the projected growth for the current year was approximately 11 per cent.*

“Currently, the forecast is subject to great uncertainty. On one hand, the strong decline in customer flows guides customers to digital channels, and on the other hand, the decrease in activities overall, dismissals and temporary dismissals will diminish purchase intent for all channels”, Kurjenoja says.

Increase in digital purchase of consumer goods

Online trade of groceries and daily consumer goods has grown dramatically in recent years. The biggest online stores have more than doubled their net sales. The level of strong growth is not, however, reflected in the market as a whole, for, at least, two reasons: firstly, alcohol orders made from abroad – either directly to home or for pick up at the Estonian harbour, for example – have diminished significantly. Secondly, the growth of online sales for Alko, one of the biggest online stores in grocery trade, has been more subdued than in the rest of the daily consumer goods sector.

Overall, digital domestic and international purchases of daily consumer goods, including digital purchases of alcohol beverages, make up approximately 0.8 per cent of the turnover for daily consumer goods trade. Daily consumer goods trade includes alcohol sales to consumers. Digital purchases not including alcohol orders increased by almost 60 per cent and by 40 per cent including alcohol order.

“Similarly as during the financial crisis, the daily consumer goods and supermarket sectors are likely to grow, and the growth of online grocery trade is likely to further accelerate. Many who try out online shopping now will remain as customers also after the epidemic, and online grocery trade will shoot up to a new level.

China is strong, but domestic e-commerce is growing stronger

The market of the domestic e-commerce has grown during the last years. Of all online purchases made in Finland, 60 per cent are shipped from Finland. China is, nevertheless, a clear number one in cross-border e-commerce bound for Finland. An estimated 13 per cent of the euros Finns spend on digital purchases rushes to China.

The share of China is significant in all Nordic countries, and its position is not shaking in the near future. According to data from last October, Wish was the most frequently used shopping application in the Nordics, both in Apple’s App Store and Google’s Play Store. Aliexpress was also among the top 10 stores.

As for the number of users, the biggest online store or platform in Finland is Zalando, similarly as in the previous year. Most purchases per user were detected in online grocery stores K-ruoka.fi and Foodie.fi. When measuring the number of purchases, the Chinese Aliexpress and DX.com are among the 10 most used online store or platforms.

Finnish online stores receive good reviews

Even through foreign online stores and platforms gain a lot of customers, when examining net sales, domestic and Nordic chains and stores are strong in all the Nordic countries.

“Physical stores support the sales of online stores, and this is one of the competitive advantages of Finnish trade against foreign online stores and platforms. Another strong asset is that Finns appreciate domestic online stores”, says Kurjenoja.

The Finnish Commerce Federation explored now for the third time how consumers assess their use of online stores. Online stores were assessed on a scale of 1 to 10, using 11 criteria, such as price-quality ratio and the effortlessness of payments.

At 8.5 the overall rating is excellent. In total, 14 stores were assessed as excellent, or which 8 – half, that is – were Finnish. Of the top 20 stores, as many as 13 were Finnish. The two stores receiving best reviews, were Levykauppa Äx and Varusteleka, the latter reaching top three for the third consecutive year.

“Even though digital consumers are very price-driven, domestic e-commerce is very well equipped to grow stronger in the domestic market but also internationally. Many of the best online stores have their own brands and products that distinguish them from competitors also internationally”, Kurjenoja says.

* Estimate by Statista. Not including VAT or delivery expenses.

Appendix:

Further information: Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja@kauppa.fi