Finland - eCommerceFinland - eCommerce
B2B/B2C eCommerce sales channel in Finland
Finland has one of the highest Internet and broadband penetration rates in the world. Finland has also developed a robust eCommerce service provider ecosystem, and eCommerce is popular and growing, driven primarily by the greater variety of goods and lower prices offered when compared to traditional brick-and-mortar retailers. In the B2C market, in 2017 Finns spent approximately $9.6 billion online on retail goods and services (travel included) from Finland and abroad. According to Euromonitor, 84 percent of Finns shop online, spending an average of $3,770 a year per capita, with purchases of home technology and clothing leading the way. In the B2B market, eCommerce is attractive and quickly growing. That said, B2B eCommerce companies in Finland have been slower than B2C companies to respond to growing customer concerns about privacy, security, and trust issues related to online stores in the advent of increasingly sophisticated methods of exploiting customer data and behavior in an omni-channel environment. As such, B2B companies have fallen behind B2C companies in active social media engagement. Finns rely heavily on foreign retailers for online purchases, giving foreign e-retailers a clear opportunity to acquire customers.
Most Finnish laws relevant to online business activities apply to all business activities, not just online business. The most relevant regulations to online business are: the Information Society Code (917/2014), which sets regulations on e-privacy, consumer protection, communications networks, and data security with the aim of promoting simplified procedures and equal opportunities for service providers in the market; and the Personal Data Act (1523/1999) and Regulation (EU) 679/2016, which cover the processing of personal data of EU subjects in connection to the offering of goods and services.
How consumers (B2B/B2C) in Finland purchase online
Foreign players are central to Finnish eCommerce. Fifty four percent of all online shoppers in Finland have made purchases abroad. In 2017, foreign online shops were mainly used to purchase clothing and footwear, media and home electronics. Approximately $5 billion was spent on online purchases (goods + services), of which 54 percent was purchased from foreign websites.
Many Finns believe that there are advantages to shopping online, finding it cheaper, more convenient, offering a larger and better range of goods and services, and saving time when compared with traditional brick-and-mortar retailers. All these factors favor foreign retailers, which often offer a range of goods not available through Finnish vendors, at more competitive prices, with delivery times no different than for products ordered from Finnish stores thanks to Finland’s excellent logistical infrastructure. The competitiveness of foreign retailers in eCommerce is bolstered by the increasing use of payment via credit and debit cards and the use of mobile devices.
The top industries selling online in Finland are clothes, shoes and accessories, media, and electronics. Travel and services, such as train, hotel and plane tickets, games and digital media, are also selling well online. Even groceries are advancing and will grow bigger once delivery options become more flexible. In 2017, the top sites for online shopping in Finland were tori.fi, oikotie.fi, kela.fi, and ebay.com.
The most common online marketing mistake in Finland is to underestimate the importance of marketing. The most successful firms are those that identify the right target groups, then promote their websites and other outlets to those target groups through a mix of channels including paid advertisements, social media, and e-mail. B2B companies in Finland appear to have fallen behind B2C companies in active social media engagement.
The leading digital marketing technologies that are changing the ecommerce landscape in Finland
Digital marketing in Finland is somewhat less advanced than in other leading international markets, and domestic Finnish firms have been edged out by U.S. firms. However, Finnish companies are increasingly using retargeted marketing. Facebook and Google have established strong positions in Finland, accounting for approximately half of all digital marketing nationwide. In 2017, 30 percent of all media marketing in Finland was digital advertising.
Social commerce is also blooming in Finland. Online retailers are finding it essential to reach their customers through social platforms to make it easy to access websites and make purchases.
Trends also show an increase in mobile commerce, especially amongst millennials. Use of mobile devices for online purchasing has been increasing due to a growing trust in mobile payments. Smartphone applicable websites have become extremely important for retailers.
Can a U.S. business enter the market via eCommerce sales channels, or find opportunity to expand online/digitally in Finland?
Yes. A Postnord survey shows that the five most popular countries from which Finns buy online are Germany, China, the United Kingdom, Sweden and the United States. Foreign online shops are used, in particular, to buy women's clothing and accessories. Finnish consumers are enthusiastic about shopping online, whether through a desktop computer, laptop computer or mobile device. Over the course of three months, each Finn on average makes more than five purchases online.
There are no business/legal obstacles to prevent online/eCommerce financial transactions in Finland. The key is to offer suitable payment methods. The four most popular eCommerce payment methods in Finland are debit/credit cards, direct payment via bank, invoice, and PayPal or similar online payment options. It is also important to assure the safety of those methods, as Finns are extremely concerned about the safety of their payment information.
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