The vast majority of the Finns buying from online stores would like to buy from domestic online stores but will, however, often choose a foreign online store. In some of the product groups, domestic commerce is not able to respond to the price competition. Nevertheless, more than half of all of the euros spent will stay in Finland. The Finnish commerce sector employs many people and in order to be able to keep up with international competition, the prerequisites for the functioning of commerce cannot be limited further.

Just over half of the euros spent by Finns on e-commerce stay in Finland. The Finnish Commerce Federation estimates that at least two billion out of the euros spent by consumers in online stores for retail goods are spent in Finnish online stores.

Foreign online stores receive from EUR 1.2 to 1.6 billion, which is up to 44 percent of all online retail purchases. In all, Finnish people spent EUR 3.6 billion on retail goods online last year.

A consumer survey carried out by the Finnish Commerce Federation shows that, in principle, Finnish consumers would like to buy from Finnish online stores but in reality, often behave differently. The price is the pre-eminent selection criterion: nearly 80 percent of online shoppers choose where to buy based on the price. The range is an important criterion for more than 60 percent and delivery costs for almost half of the online shoppers. Ultimately, the domesticity of the online store is an actual criterion only for 13 percent of customers.

“A Finnish consumer is able to do business in any part of the world and, largely guided by the price, he will do so. It is the right of the consumer. Despite its strengths, Finnish commerce does not always have equal opportunities to compete with foreign ones. Finnish commerce is competing with the foreign price level at the domestic cost level,” says Juhani Pekkala, Managing Director of the Finnish Commerce Federation.

Fashion and beauty from abroad, electronics and interior decoration from Finland

The study shows that euros spent on fashion and beauty purchases mainly flow abroad. The price guides consumers buying fashion and cosmetics as well as hobby equipment online more than average. Their buying decisions are also strongly influenced by the delivery costs.

Most of all, however, the price controls consumers buying electronics. Despite this, the majority of the euros spent in electronics stay in Finland. According to the survey, yearly domestic purchases are also considerably higher than foreign purchases. Many of the most popular electronics online stores also have brick–and–mortar stores in Finland.

“A brick–and–mortar store considerably supports the sales of electronics. A pick-up from the store decreases delivery costs and the total price as well as is speeding up the delivery time,” summarizes Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

The delivery time is evidently a much more important selection criterion for consumers buying electronics than others when it comes to choosing where to buy.

Finns are also more likely to buy household goods, interior decoration and gardening products from domestic than foreign online stores. Online sales of the products are boosted if the online stores also have brick–and–mortar stores.

For the e-commerce of interior decoration products, the range is an important selection criterion. Many of the Finns’ favourite online stores that sell interior decoration products include the company’s own or generally Finnish brands in their range.

“Strong, Finnish consumer goods brands help the competitiveness of Finnish stores. On the other hand, Finnish stores could also be able to take them abroad. Unfortunately, there is little production of consumer goods in Finland,” regrets Kurjenoja.

Commerce is more international than ever before

E-commerce has made the business environment of the Finnish commerce more international than ever before. Tougher tax solutions brought in during the present government's reign have, however, further reduced the competition possibilities of Finnish commerce.

Indirect taxation increases the costs of commerce and service and the tighter consumption taxation cuts the purchasing power. Juhani Pekkala is afraid that the next government will continue to chip away at the business environment of commerce and services.

“The next government must understand that weakening the prerequisites for the functioning of commerce and services will also be reflected in employment and investments. Commerce is the largest employer in economic life and one of its biggest investors, and the success of the sector brings well-being for the whole of Finland,” Pekkala points out.

The survey on the division of e-commerce purchases made by Finns between foreign and domestic online stores was carried out by TNS Gallup. At the turn of January-February, it interviewed 3,619 Finns aged 15 or older. The home country of the online store is defined by the head office location of the company or group.

For further information, please contact:

Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)9 1728 5134, jaana.kurjenoja(at)kauppa.fi

Juhani Pekkala, Managing Director, Finnish Commerce Federation, tel. +358 (0)9 1728 5111, +358 400 419 560, juhani.pekkala(at)kauppa.fi

Attachment:

Summary of the foreign e-commerce

Members of the Finnish Commerce Federation can find more extensive material on the results of the study from member statistics.

 

The Finnish Commerce Federation represents commerce – the largest sector of economic life. Commerce employs around 300,000 persons in Finland. The Federation has around 7,000 member companies and represents both retail and wholesale commerce in industry policy and labour market lobbying. www.kauppa.fi