Domestic e-commerce recovering – growth of nearly five per cent in the second quarter

According to the Verkkokauppapulssi* survey by Digital Commerce Finland, the Federation of Finnish Special Commodity Trade ETU and the Finnish Commerce Federation, e-commerce in Finland grew by nearly five per cent in the second quarter of this year when compared to the same period last year. Meanwhile, according to Statistics Finland, sales in the retail sector as a whole increased by 1.4 per cent and sales in the specialty goods sector increased by 0.9 per cent.

In the future, online stores expect sales to grow, especially abroad. In the previous Verkkokauppapulssi company survey in April, a third of online stores selling on the international market expected rapid growth of more than 10 per cent in the next 12 months. Now, as many as 59 per cent of exporting online stores are expecting rapid growth.

“Although online store exports, especially to the United States, have decreased due to tariff wars and general geopolitical uncertainty, many online stores are now aiming for the international market and Europe in particular,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation, explaining the results of Verkkokauppapulssi.

Domestic online sales are also expected to increase over the next 12 months, although the expectations are more moderate than those for growth in the international market. In the domestic market, 36 per cent of online stores expect rapid growth of more than 10 per cent in the next 12 months. Although online retailers’ belief in the acceleration of growth has strengthened since the spring, Finland’s financial situation is still seen as a problem in e-commerce as well.

“Online stores see weak consumer confidence and purchasing power, as well as competition from Chinese low-price commerce, as the largest obstacles to growth in Finland. A customer base with more purchasing power is being sought from abroad,” says Kurjenoja.

There are also obstacles to the internationalisation of e-commerce

According to the results of Verkkokauppapulssi, internationalisation has its own difficulties despite the expectations of growth. It is difficult to stand out from the wide selection, even if the products sold are of high quality. Therefore, marketing competence and resourcing are essential in internationalisation. Some online stores are already utilising the possibilities offered by artificial intelligence in order prediction, advertising automation and translation, for example, but some are still getting started.

“It is sometimes difficult for online stores to find research data on the consumers in the destination country or the right partners to support the development work required for internationalisation,” says Mirva Sandström, Digital Commerce Director at Digital Commerce Finland, describing the challenges faced by online stores that are internationalising.

Freight and delivery costs are also seen as factors slowing down international sales, and some online stores are concerned about the pricing of deliveries.

“In their experience, deliveries from abroad to Finland are cheaper than deliveries from Finland to abroad. Another matter is Chinese low-price commerce, which does not always seem to include shipping fees at all,” says Sandström, summarising the perspective of online retailers.

Conflicting expectations in the e-commerce of interior design

According to Verkkokauppapulssi, the global growth trend in the cosmetics sector appears to continue in Finland. However, online stores selling interior design and fashion have the greatest expectations for international growth.

“Here in Finland, we have interesting interior design and fashion brands and online stores that believe that high-quality products will be successful in the international market despite the global price competition and low-price commerce,” says Ulla Pöllänen, Managing Director of the Federation of Finnish Special Commodity Trade.

The interior design sector is very divided in terms of domestic expectations. While some interior design online stores expect a considerable increase in domestic demand, some consider the sales of their online store to be tied to the construction sector’s economic cycle – as does the hardware trade.

“When the construction of new apartments is low and the sale of apartments has not really taken off, it is reflected in the sales of furniture and hardware in all channels,” says Pöllänen.

*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. 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