Although the number of Russian travellers and their consumption in Finland continue to decline from last year, the pace of the decline has slowed down and is beginning to bottom out. This is visible in both border crossings and consumption. At the same time, e-commerce and Estonia are becoming increasingly strong competitors in the consumption of those visiting Finland. An international Russian at home in the digital world continues to be an attractive customer for Finland’s travel sector.

According to a survey* of the Finnish Commerce Federation, online shopping is becoming increasingly common among Russians visiting Finland. Whereas two years ago, less than 40 per cent of Russian travellers to Finland had shopped online, the corresponding figure now is as much as two-thirds.

Russians shopping online represent an attractive customer segment to Finland’s service sector, because they spend more holidays and have more overnight stays here than other Russians. In terms of actual shopping and day trips, however, they lag behind other travellers. For these Russians accustomed to online shopping, prices and selections are nevertheless the reason for shopping more often than for others. In this respect, Finnish commerce finds itself in a challenging competition with global online commerce.

“Finnish commerce and other services are engaged in increasingly tough competition over international Russians who feel at home in the digital world. However, this issue goes beyond Russians alone, and concerns travellers in general. Will Finland be able to compete with the range, prices and quality of its services and products?” asks Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

In addition to Russians used to the online environment, Russian travellers visiting both Estonia and Finland are also desirable customers for our travel sector. Compared to Russians visiting only Finland, they enjoy a slightly better income, use money on services and shopping here more often, and spend short, one or two-night holidays here, rather than making more frequent daytrips. As are those Russians who shop online, Russians travelling in both Estonia and Finland are more price-driven than the rest.

“Prices drive Russians visiting both Estonia and Finland to shop more often than others. This is, of course, a little concerning considering that Estonia’s price level in many services and products is lower,” says Kurjenoja.

Is the consumption slump bottoming out?

The survey of the Finnish Commerce Federation reveals that while the number of Russian travellers and their consumption continues to decline, the pace of this decline is slower than last year. The number of Russian travellers visiting Finland in January–August fell by 11 per cent compared to last year, but the drop during the corresponding period last year was more than 30 per cent. The amount of invoice receipts also fell by 30 per cent in January–August last year, whereas the drop during the corresponding period this year was a mere 7 per cent. The 48 per cent slump in tax free purchases in January–August last year softened to a 25 per cent drop this year.

The total consumption of an individual Russian traveller in Finland reduced from EUR 156 to EUR 148 in January–August, while the amount spent on purchases fell from EUR 122 to EUR 117.  
“Although Russians’ overall consumption in Finland this year may fall by 15 per cent, the free fall is beginning to slow down. We should nevertheless not expect any significant growth in Russians’ consumption in Finland over the next year, since their purchasing power will not improve without robust economic growth—and there’s none in sight,” says Kurjenoja.

* Tutkimus- ja Analysointikeskus TAK Oy interviewed 5,801 Russians aged at least 15 leaving Finland in January–August 2016 and a total of 7,379 Russians from September 2015 to August 2016.
 
Further information:

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

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 industrial policy and labour market lobbying.www.kauppa.fi