E-commerce grew early this year – exports to the United States have decreased

According to the Verkkokauppapulssi survey* conducted by Digital Commerce Finland, the Federation of Finnish Special Commodity Trade ETU and the Finnish Commerce Federation, the online sales of online stores operating in Finland increased by 2.2 per cent in the first quarter of the year when compared to the same period last year. Meanwhile, according to Statistics Finland, the sales of the entire retail sector decreased by 0.7 per cent.

Approximately 66 per cent of online retailers expect their online sales to grow in Finland during this year, even though the sales expectations for the whole year are slightly lower. In February, 37 per cent of online stores estimated that their domestic sales would grow by as much as 10 per cent, but in April only 29 per cent of online stores made the same estimate.

In Finland, growth is expected especially in the fashion and hobby product groups. Consumer sales in the hardware trade are also expected to recover gradually. On the other hand, the online sales of cosmetics and health products are expected to be on the rise.

“Online retailers see consumer confidence, slow purchasing power development and low-price foreign commerce as the biggest factors slowing down growth in Finland,” says Ulla Pöllänen, Managing Director of the Federation of Finnish Special Commodity Trade, describing the barriers to growth in e-commerce.

Although online retailers’ sales expectations for the entire year in Finland are slightly lower, the outlook for the next three months has picked up when compared to the beginning of the year. The same trend can also be seen in the European Commission’s Business Survey, which shows that the sales expectations have improved in both the specialty and household goods trade and in the entire retail sector. Spring and the approaching summer are clearly boosting the expectations of e-commerce and the entire commerce sector.

Online store exports are expected to continue to increase

The sales expectations for exports have remained high despite the threat of trade wars. Almost all online stores selling to foreign consumers are expecting at least a slight growth. However, the highest growth expectations have decreased. In February, as many as 53 per cent of exporting online stores expected their sales to grow by more than 10 per cent, compared to just 33 per cent in April. The online retailers of interior decoration products, in particular, expect stronger growth in international online sales than others.

“Particularly small online retailers expect the growth of foreign online sales, but they feel that they do not always have enough expertise in marketing. Successful marketing is one of the key factors in internationalisation – it helps you differentiate yourself from the numerous competitors and the huge global selection of products,” says Mirva Sandström, Digital Commerce Director at Digital Commerce Finland, summing up the thoughts of online retailers.

Online store exports to the United States have decreased

When selling through Amazon, the largest e-commerce market for Finns is the United States, which accounts for more than half of online sales to Europe and the USA. In April, the volume of online sales from Finland to the United States on the Amazon platform decreased by 29 per cent from last year.

“The unpredictable customs policy has increased the uncertainty of American consumers, which is reflected in foreign online store orders. In addition, consumers in the United States apparently believe that the removal of the USD 800 duty-free limit for Chinese e-commerce, which came into force at the beginning of May, also applies to other sellers,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

Cosmetics is the best-selling product group of Finnish online stores in the Western market on the Amazon platform, but its sales also decreased in April. Cosmetics were sold almost seven times more than the second largest product group: sports and outdoor products.

“The global market for natural cosmetics, in particular, is expected to grow rapidly in the coming years, with particularly rapid growth in many Asian countries. Although the shrinking of the US market is a hard hit for small cosmetics brands, the growth of the global market also offers opportunities,” says Kurjenoja.

*Verkkokauppapulssi is a company survey for online stores that is carried out quarterly. It typically receives responses from approximately 100–200 companies. The respondents receive an e-commerce report that discusses the development of e-commerce more extensively than the results of the survey and also utilises other sources of information. The report of the first quarter presents, among other things, conversion rates by product category and online sales in April on the Amazon platform. Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation, is responsible for analysing the results of the company survey and producing the content of the e-commerce report.

For further information, please contact:

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

Mirva Sandström, Digital Commerce Director, Digital Commerce Finland
Tel. +358 (0)400 984 141, mirva.sandstrom(at)digitalcommerce.fi

Ulla Pöllänen, Managing Director, Federation of Finnish Special Commodity Trade (ETU)
Tel. +358 (0)50 300 1660, ulla.pollanen(at)etu.fi