Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
Last Published: 7/11/2017

Overview
Iceland follows European e-commerce regulations.  E-commerce consists of online banking and shopping, including sales of airline tickets, hotel lodging and events tickets. ShopUSA, an Icelandic online service company, coordinates delivery and shipping of U.S. products to Iceland.
Icelanders have very high internet usage (96.5%)). Internet shopping is growing in Iceland, with just over 67.3% of internet users doing at least some of their shopping online in 2014, up from 55.8% in 2013 (there are no statistics available for 2015 or 2016).

A new tax for electronic media was implemented in 2011. Vendors must register with the Icelandic tax authorities if they sell more than $8,000 worth of products per year to Icelandic customers.

Current Market Trends
Icelanders are increasingly using the internet to shop, as products are generally expensive in Iceland. Icelanders purchase clothing online, as well as baby and children’s products (clothing, strollers and car seats), home décor and larger items including bicycles. With better and faster shipping services, and reduced tariffs, Icelanders are increasingly purchasing larger items from abroad online.

Domestic eCommerce (B2C)
Local service providers are also increasingly offering their products online, namely Icelandic clothing brands including iglo+indi and Lín Design, online stores offering home décor and Icelandic and Nordic design such as Epal, Esja Dekor, Hjarn, Hrím Hönnunarhús, Módern, and Snúran, and stores carrying clothes and high-end products for babies and children, such as Askja Botique, FIFA Iceland, I am Happy, Pæjur og Pollar, Petit, Sirkus Barnavöruverslun, and Tiny Trésor. Online ecommerce platform Hopkaup.is offers a range of products, including childrens’ toys, gadgets, tours, books, and group offers on services such as massages. Icelanders can buy food products and meals online via websites such as Eldum rétt, as well as fast food such as Domino’s Pizza and Pizzan. As consumer products are generally expensive in Iceland, buying and selling used items from children’s clothing and toys, to camping trailers and cars is quite popular, both on Facebook and on websites such as Bland, a popular used goods seller. Please note that this list of websites is not exhaustive, but it gives an indication of the ecommerce market in Iceland.

Cross-Border eCommerce
Ecommerce platforms like AliExpress are very popular, as well as European and American online retailers, especially those who offer free or low-cost delivery to Iceland. Tariffs on many imported goods have been reduced or eliminated, but customers have to pay VAT upon the arrival of goods to Iceland. Icelanders purchase clothing online, as well as baby and children products (clothing, strollers and car seats), home décor and larger items including bicycles.

B2B eCommerce
B2B ecommerce is growing in Iceland as companies are increasingly offering their services online. The high-tech and IT industries are flourishing in Iceland. IT companies generally offer their services online to other companies, such as software solutions for businesses. Two of the largest companies in Iceland that provide IT solutions and services for businesses are Advania and Nyherji. Microsoft is also present in Iceland.

eCommerce Services
As noted above, the high-tech and IT industries are growing fast in Iceland. Several companies offer IT services in Iceland, such as Advania, Microsoft, Nyherji, and TM Software. Several smaller Icelandic companies and startups offer unique software solutions, such as HR software, advertising solutions, online banking software, and online payment solutions. Sprotar, a business technology website, provides a comprehensive list of IT startups in Iceland. The data center industry is also growing in Iceland, as Iceland is a convenient location for data centers due to the cold climate, renewable energy, convenient location between Europe and the U.S., and safe environment.

eCommerce Intellectual Property Rights
Iceland adheres to key international agreements on property righs, for more information see the chapter on Intellectual Property Rights.

Popular eCommerce Sites
It is quite popular to both purchase and sell used goods, including clothing, strollers, bicycles, toys, trailers, tires and cars, in Iceland. There are several facebook groups devoted to this, often for specific goods like children’s clothing, or spare parts for cars. The most popular facebook group is “Brask og brall” which has over 100,000 members, or about a third of the Icelandic population. The most popular website to sell and buy used goods is Bland, where smaller businesses and individuals also advertise their products and services.

Foreign ecommerce platforms are rapidly growing in popularity in Iceland, namely AliExpress which offers low-cost Chinese-made products. Icelanders are also increasingly purchasing goods from American and European retailers, mostly clothing, baby and children’s products, as well as equipment and larger items like bicycles and bicycle products. Many Icelanders use the services of ShopUSA, which is an Icelandic online service company that coordinates delivery and shipping of U.S. products to Iceland.

These Icelandic online stores are popular:

  • Icelandic clothing brands iglo+indi and Lín Design
  • Online stores offering home décor and Icelandic and Nordic design Epal, Esja Dekor, Hjarn, Hrím Hönnunarhús, Módern, and Snúran.
  • Stores carrying clothes and products for babies and children, often high-end products Askja Botique, FIFA Iceland, I am Happy, Pæjur og Pollar, Petit, Sirkus Barnavöruverslun, and Tiny Trésor.
  • Online ecommerce platform Hopkaup.is offers a range of products, including childrens’ toys, gadgets, tours, books, and group offers on services such as massages.
  • Icelanders can buy food products and meals online via websites such as Eldum rétt, as well as fast food such as Domino’s Pizza and Pizzan.
  • Many Icelanders use the services of ShopUSA, which is an Icelandic online service company that coordinates delivery and shipping of U.S. products to Iceland.
  • The most popular website to sell and buy used goods is Bland, where smaller businesses and individuals also advertise their products and services.
  • Foreign ecommerce platforms are rapidly growing in popularity in Iceland, namely AliExpress.
  • Please note that this list of websites is not exhaustive, but it gives an indication of the ecommerce market in Iceland.

Online Payment
Online retailers offer secure online payment. Visa and MasterCard credit cards are accepted in most, if not all places in Iceland, and an increasing number of retailers accept American Express. Apps that facilitate online payment are widely used amongst younger people, including AUR, Kass, and Netgiro.

Mobile eCommerce
As noted above, younger people widely use mobile apps such as AUR, Kass, and Netgiro.

Digital Marketing
Digital marketing is widely used in Iceland. Many smaller companies only advertise on social media, mostly facebook, and many use social media influencers to market their products. Larger and more established companies use digital marketing in combination with conventional marketing.

Major Buying Holidays
December is the major shopping season in Iceland, starting three to four before the Christmas holiday.

Social Media
As stated above, many Icelandic retailers and service providers use social media to advertise their products. Internet usage is widespread in Iceland, with facebook being the most popular form of social media. Snap chat and instagram are also popular. Many smaller companies only advertise on social media, mostly facebook, and many use social media influencers to market their products. Larger and more established companies use digital marketing in combination with conventional marketing.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Iceland eCommerce Industry Trade Development and Promotion eCommerce