The Oban Blog


Fast e-commerce growth in Scandinavia boosts market desirability

Focusing on Denmark, Finland, Norway and Sweden

Scandinavia might not seem like an obvious target market for e-commerce expansion plans, with its population of fewer than 27 million people spread across 3.4 million square kilometres. The Nordic countries and their associated territories also have distinct languages only spoken within the region and nowhere else in the world.

Despite this, other nations will struggle to match the region’s impressive internet penetration, and inclination to adopt new technologies. Across the region, six out of ten consumers shop online every month, in a market with well-developed infrastructure and motivated consumers. The countries also rank highly regarding mobile and mobile broadband uptake. Finland has the third highest ratio of mobile broadband connections to people in the world, with more than one and a half connections for every Finnish person.

Retailers shouldn’t ignore the opportunity Scandinavia offers for e-commerce. Indeed, online sales in the Nordics increased by 11% to £8.8 billion in the first six months of 2018 compared with the same period last year. Sweden is the largest e-commerce country in the region with a value of £3.6 billion while Finnish consumers shop less online than their neighbours.

The language barrier

One potential barrier to business is each country’s distinct language. Although many Scandinavian’s speak English to a high standard, consumers still expect e-commerce sites in their native tongue. Scandinavian customers are generally more flexible than the average shopper, but they still prefer the most convenient and appropriately localised option.

While the long-term goal may be to engage in the £8.8 billion market, it is worth considering where the most significant opportunities lie on a country by country basis:

Denmark: the most consumers buying from the UK

Denmark’s B2C e-commerce sales are currently estimated at £2.2 billion annually. Denmark has the highest percentage of consumers buying online from UK companies (33%). The Danish spend on home electronics is second only to Norway, but where Denmark stands out is its use of online grocery shopping, which is more than 40% higher than the average for the Nordics. The population density and smaller distances enable delivery logistics which suit customers seeking perishable goods.

Finland: potential for growth

Although as a region the Nordics have high internet penetration and smartphone ownership, Finnish consumers are still quite conservative when it comes to shopping online and prefer purchasing via desktop.  While Finland’s market is the least mature, the picture is positive for sellers from outside the region as Finnish shoppers lead the way in shopping online from abroad (40% per month in the first half of 2018). As with many other countries and regions, clothing and shoes are the leading items purchased online. Finnish shoppers are particularly keen on buying these items from abroad as domestic sellers fail to provide enough choice and value. Beauty and wellness products are also major spending areas.

Norway: 60% online shoppers use retail platforms

Norway is currently the third largest country for B2C e-commerce sales, at just over £1.9 billion (behind Sweden and Denmark respectively). The Norwegians stand out for shopping for products in the US (23% had bought goods online in the past month, compared to 15% of Swedes and 9% of both Finnish and Norwegian consumers). Part of this behaviour is attributable to the popularity of eBay. 60% of online shoppers purchase from online platforms every month in Norway, with Zalando and eBay the most popular. Norwegians buy the most sports and leisure goods in the region and although 71% of people aged 18-29 shop online every month, shopping in physical shopping centres remains popular.

Sweden: 30% shopping online bought beauty and wellness products

Sweden is the largest market in the Nordics for B2C e-commerce revenue with sales of £3.6 billion. During the first six months of 2018, two out of three Swedish people shopped online. The purchasing patterns are very similar to Norway and Denmark although it is the most advanced for buying medicines online (18% per month) and almost one-third of online shoppers purchased beauty and wellness products. Across the region, the Swedish shop the least from websites outside the Nordics at just 19%. The strong domestic market provides enough choice and value to satisfy consumers. When shopping abroad online, the preference is for Germany, closely followed by the UK and China.

Unifying factors

Nordic consumers exist in mature e-commerce markets with some of the highest internet penetration worldwide, strong economies and well-developed infrastructure. Scandinavian consumers rate convenience as the most significant benefit of shopping online over cheapness, choice and time saved.

Security is a concern, and good communication is especially important – in Sweden, Denmark and Norway nine out of ten consumers said that it was important to have continuous delivery status updates. Weekend delivery is also high on consumers’ expectations – websites who do not offer this risk seeing their customers spend their weekends in physical shopping centres as they prefer not to wait until Monday for delivery.

Tailoring strategies for individual Nordic countries while understanding their shared needs will help retailers looking to effectively and efficiently grow their businesses in this wealthy region.