Online shopping grew by over twenty per cent in Finland – market share of domestic e-commerce is increasing

The recent e-commerce survey by the Finnish Commerce Federation shows that the pandemic steered consumers to use digital channels permanently all over the world. In many countries commerce grew only digitally as physical stores and various consumer services were closed. In China, the largest e-commerce market in the world, e-commerce is projected to make up as much as half of all retail trade. In the UK, a forerunner in European e-commerce, the share of e-commerce of all retail trade jumped to nearly 30 per cent.

In Finland, domestic e-commerce had a much lower share of all retail trade, comprising an estimated 8 per cent. However, the overall share of e-commerce is much larger as a considerable part of online purchases, approximately 36 per cent, are from foreign online stores.

“Although a large share of e-commerce is cross-border trade, the share of foreign orders has clearly shrunk over the last couple of years, including orders from China. Domestic e-commerce has developed and gained market share,” says Jaana Kurjenoja, Chief Economist for Finnish Commerce Federation, describing recent developments.

Online retail trade grew by 22 per cent in Finland last year, a record pace of all of the 2010s. The value of cross-border purchases grew by approximately 10 per cent and that of domestic purchases by as much as 30 per cent. The overall net value* of all purchases both domestic and international reached EUR 5.1 billion.

E-commerce of daily consumer goods also grew to a level that Kurjenoja had previously forecast would be reached in 3–4 years. The share of e-commerce of all daily consumers goods trade jumped from 0.6 to 2 per cent in one year.

Internet is becoming an established purchasing channel

Last year, online shopping became a routine for many consumers. Of people who used the Internet over the past three months, as many as 73 per cent also shopped online, when in the previous year the share was 65 per cent. In addition to daily consumer goods, books, interior design products, home appliances, household goods, cosmetics and pet products were purchased online more frequently than before – and often for the first time.

The year of COVID-19 also changed consumers’ views of themselves as online shoppers. During the spring, summer and autumn 2020, as many as 42 per cent of adult Internet users estimated that their shopping would focus mainly or solely online in the coming years. In January, just before the pandemic started, only 35 per cent thought so.

Although many of us will return to physical stores for buying groceries and clothes as soon as the pandemic eases, there is no going back to exactly how things were before.

“The permanently changed ways of working as well as people becoming used to shopping online during the pandemic will keep facilitating e-commerce in the coming years. At the same time, commerce has developed and continues to strongly develop digital services and their accessibility, which will help retain consumers in digital channels,” says Kurjenoja.

The moment for domestic e-commerce must be seized

The demands set for the digital development of commerce are growing due to e-commerce growing rapidly and becoming an increasingly common part of the daily lives’ of Finnish consumers. This is a decisive moment for domestic e-commerce if there ever was one, and in order to develop it both investments from companies and political decisions are required.

Resources of Finland’s sustainable growth programme should be used for developing domestic e-commerce in order to improve competences and increase internationality. “Investments are required specifically to help SMEs to internationalise their online stores,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.

Finnish companies that build upon a solid customer experience and sustainability have the conditions to make it also in the international market, offering sustainable services and products to their customers.

“Benefiting from the opportunities provided by digitalisation requires investments in competences on different degrees of education. That way commerce can stay competitive in the increasingly close international competition,” Kiviniemi emphasises.

Domestic stores getting a foothold in the list of best online stores

For several years now, Kantar TNS has conducted a consumer survey for the Finnish Commerce Federation in which customers assess online stores based on 11 criteria ranging from their price-quality ratio to their delivery methods. The emergence of domestic online stores is also apparent on this list.

Now, most online stores rated excellent, with an overall rating of 8.5 or higher are domestic. In these times that have been very difficult for the fashion trade, the 15 online stores that Finns rated the highest included as many as three domestic fashion specialty stores (Varusteleka, Nosh and Nansoshop) and two solid sport fashion retailers (Scandinavian Outdoor and Partioaitta). Many of the online stores that made it to the list have done so nearly every year, such as Varusteleka that places in the top three annually. The five online stores with the highest overall rating were Gudrun Sjöden, Varusteleka, Finnish Design Shop, Nosh and Thomann.

“The highest-rated Finnish online stores often have their own products and brands that help them establish a profile and stand out from their competitors. This way they can also create an image of quality instead of competing with the international giants purely based on price,” says Kurjenoja in assessing the results.

*The figure excludes VAT, and takes product returns into account. The figure also excludes services, such as travel tickets, hotels and orders in restaurants and cafés, downloadable digital content, car and boat trade as well as fuels.

Appendix:

eCommerce Finland 2021 (onfy in Finnish)

Appendices available for download for member companies by logging into the member pages:

eCommerce Finland 2021 / for members onlyeCommerce estimates 2021 / for members only

For further information, please contact:

Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, mari.kiviniemi@kauppa.fi

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

Sources of the e-commerce report include official turnover statistics of various countries, reports by Statista, databases and international consumer surveys, eMarketer data, the Finnish Commerce Federation’s own monitoring data as well as consumer surveys conducted by Kantar TNS. The final chapter of the report “The largest online stores that sell to Finland and which are rated the highest by consumers” is based solely on the consumer survey designed by the Finnish Commerce Federation and conducted by Kantar TNS. The appendix includes a more detailed list of sources.