02 February 2022

Survey: Growth of e-commerce in Finland will stem from Finland and neighboring regions in the future

China’s popularity fading

In recent years, Chinese online stores have been occupying the top positions in online shopping across the world. Now the role of EU countries has strengthened and China’s popularity is on the decline. The key factors explaining this change are Brexit and the EU VAT reform that came into force last year. In the EU, e-commerce has grown significantly.

This information was taken from the e-commerce shopper survey published by the International Post Corporation (IPC). Posti published the results of the survey that are related to Finland today.

The annual Cross-Border E-Commerce Shopper Survey by IPC received approximately 33,179 responses from online store customers in 40 countries. In Finland, the number of respondents was 1,030.

“A clear change is taking place in international e-commerce. E-commerce has grown throughout the COVID-19 pandemic, and now buyers have shifted more towards online stores based in their home country and the neighboring regions. The EU VAT reform came into effect at the beginning of July, so its overall impact on the number of products ordered, particularly from China, won’t be seen until this year,” says Kaj Kulp, Vice President, International eCommerce at Posti.

Role of EU countries strengthens – Brexit and VAT reform explain the change

The United Kingdom withdrew from the EU on January 1, 2020. Approximately one third (31%) of Finnish online shoppers feel that Brexit has affected their purchases. European online shoppers feel equally affected by Brexit. Increased customs clearance fees and higher product prices are the most significant changes experienced by consumers.

Another major change was the e-commerce VAT reform, which entered into force throughout the entire EU at the beginning of July 2021. Due to the reform, all goods items arriving from outside the EU require customs clearance and are subject to VAT. Previously, items with a value up to EUR 22 ordered from outside the EU were exempt from VAT. Almost half (43%) of Finnish online shoppers feel that the VAT reform has had an impact on their purchases. Increased customs clearance fees, higher product prices and the workload related to the different stages of customs clearance have had the greatest impact on Finns’ purchasing behavior.

Germany narrowly overtook China as the most popular

In international e-commerce, the most popular countries among Finnish consumers are Germany (42%), China (40%) and Sweden (24%). These are followed by the United Kingdom (19%), the United States (18%) and Estonia (7%).

Germany increased its share of purchases made by Finnish online shoppers by 5 percentage points during the past year and overtook China for the first time in the history of the survey. Correspondingly, the share of China decreased by 9 percentage points and that of the UK by 5 percentage points.

Of the countries favored by Finns, nearly half of online purchases from Germany and more than 60% from Sweden are delivered in less than a week.

40% of Finns received free delivery for their online purchases ordered from abroad, while the corresponding figure in other countries is already 60%.

Growth of e-commerce in Finland will stem from Finland and its neighboring regions in the future

Finns’ interest in the offering of Finnish online stores has increased throughout the COVID-19 pandemic, and the growth shows no signs of stopping. The majority of Finns (68%) intend to purchase more from domestic online stores in the future. The neighboring areas are also gaining more popularity. Half (49%) of Finns intend to increase their online purchases from neighboring countries and 54% from EU countries. Correspondingly, more than half are planning to reduce their online purchases from China and the UK.

Global platform giants dominate e-commerce – Amazon gaining popularity also in Finland

13% of Finns who purchased from foreign online stores stated that they had made purchases from Amazon and the Chinese online store Wish. About 10% stated having made purchases from Zalando, eBay and AliExpress. Amazon has steadily increased its popularity in Finland as Wish’s popularity has decreased. Zalando also grew in popularity last year.

As many as a quarter of Europeans’ latest online purchases were from Amazon, a fifth from Alibaba/AliExpress and 10% from eBay.

Up to a third of Finnish respondents would be interested in joining the Amazon Prime membership program if it were available in Finland. Amazon Prime is mainly used by consumers in the US (73%), Spain (68%) and Italy (66%).

Swedes, Estonians and Danes purchase from Finnish online stores

Products from Finnish online stores are mainly shipped to the neighboring regions. Of the Swedish and Estonian online buyers who responded to the survey, 14% mentioned that their last purchase was from Finland. Danish consumers were in third place (11%).

The main reason for foreign online shoppers to shop in Finnish online stores is that the desired product is not available elsewhere. Fast delivery appeals to 38% of the respondents, and 36% state the low price of the product as the reason.

Source: Posti Group