Overview 

ECommerce turnover for 2020 was $13.4 billion, which is about 2 billion less than in 2019, due to decrease in travel and traffic expenditures. 58 percent of the turnover were spent on goods, 26 percent on services and 16 percent on traveling. Covid-19 explains most of the changes as travel took almost half and goods a third of the distribution in the previous year. The rise of goods is explained by Covid-19 restrictions for certain business not as much on moving restrictions. In general, Covid-19 has not changed consumer behavior. Only 25 percent say they have made more purchases online while 59 percent say it has stayed the same. The biggest change in eCommere in 2021 was the introduction of VAT to purchases under 22 Euros that originate outside the EU. In recent research, 43 % of Finns admitted that the EU’s Ecommerce Package of July 2021 did have an effect on their purchasing behavior shopping outside of EU online stores. The package also increased the popularity of domestic online stores. 

Top products 

The top industries selling online in Finland in 2021 were clothing (55 %), home electronics (40 %), cosmetics (33 %) and books (30 %). Travel and services, such as train, hotel and plane tickets, games, and digital media, are also selling well online, except in 2020 and 2021. Even buying groceries online is advancing but is still having a small role overall, as only 11 percent of all grocery shopping was done online in 2020 (6 percent in 2018). It remains to be seen if the increase during Covid-19 pandemic will change consumer behavior permanently.  In 2021 B2B used ecommerce as purchasing tool in 47 percent of all purchase compared to previous year’s 36 percent. Five-year prediction raises it up to 62 percent. Buyers and sellers value slightly different features. Order tracking and real-time availability are equally important to both as well as renewal of an old order. Sellers value features in integration, customer specific price list, discounts and selection much higher than buyers. Overall ecommerce has taken giant steps in the past year and there is no turning back when both consumers and business increase their demands for ecommerce providers. 

Values 

The total value of eCommerce spending in 2020 was $24 Billion, of which 63 % came from B2B and 37 % from B2C. On the consumer side 49 % spent more than $100 and 21 % over $500 in a three-month period. For single purchases, 64 % were worth less than $50, though the amounts have risen since 2019, mainly due to higher customs duties. Over the course of three months, each Finn on average makes more than five purchases online. Average spending per year in 2020 was $900,00/pers. The share of ecommerce in B2B turnover was 22%, slightly more than the EU average of 20%. Most commonly it was used in hotel and restaurant businesses (55 %), retail (53 %) and wholesale (41 %). Other sectors utilizing eCommerce included construction (4 %), scientific/technical (8 %) and logistics (9 %). Currently 40 % of sellers do not offer any form of ecommerce as a way to do business. 

Demographics 

Covid-19 increased the number of active online buyers, especially in older age groups. In 2019, 65% of the 18-74 demographic bought online; in 2020 the figure was 73.2%. In the last 8 years, the share of ecommerce buyers in the age group 65-74 has doubled, and tripled in age group 74-89, but remained well below younger demographics as a percentage of total online activity. 

According to Finnish Post Survey 2021 there are some gender-based behavioral differences when it comes to buying online. Price comparison shopping is relatively more attractive to males, ease of access and avoiding crowds in stores appeal to women. Women (37 %) are more willing to pay extra for eco-friendly delivery than men (28 %), and those under 35 years of age are more willing than the older age groups. On average, 30% enjoy online shopping as much as shopping at brick-and-mortar. 

In 2020 the five most popular countries from which Finns buy online are China (49%), Germany (37%), and the United Kingdom, Sweden, and the United States (totaling  24%). 

Legal and Regulatory 

Finland applies EU’s Ecommerce Directive 

The European Union has introduced a new VAT eCommerce package, which will facilitate cross-border trade, combat VAT fraud and ensure fair competition for EU businesses. These new rules have been in force as of 1 July 2021. There are no local incentives or initiatives for ecommerce. 

The most important rule for a foreign company building ecommerce in Finland is to make sure that their platform will support local enterprise resource planning systems (ERP), customer relationship management (CRM), local payment methods and Finnish Post. If they don’t, it will be impossible to do business here. 

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: Consumer Protection Act, where distance selling regulations are applied to ecommerce, 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 GDPR, which cover the processing of personal data of EU subjects in connection to the offering of goods and services. 

There are no business/legal obstacles to prevent online/eCommerce financial transactions in Finland. The key is to offer suitable payment methods. 

Consumer BehaviorCovid-19 increased buying online from domestic sites from previous year’s 61 percent to 64 percent in 2020. Difficulties in returning purchase was the most common reason of not buying from foreign online stores. 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. These are also the drivers for online purchases in addition to around the clock availability. Both sexes in all age groups interrupt the shopping when the delivery costs are too high. In fact, 61 % would shop more online, if offered free delivery. 76 % have even added more items to the shopping cart to qualify for free delivery. Finns are conscientious buyers, which means that two third of buyers online did not return their purchase in 2020 t. 

In 2020, most frequently used online shops were Verkkokauppa.com, Zalando, Gigantti, and Kärkkäinen, (Amazon occupied 9th place). Among international online marketplaces, Zalando, eBay and Wish were the most popular. The four most popular eCommerce payment methods in 2020 in Finland were online banking (63 %) and debit/credit cards (49 %), invoice (23 %), and PayPal (21 %) or similar online payment options. Mobile pay has taken big steps in popularity during the past year. When in 2019 8% were using it as a payment method, in 2020 the percentage had gone up to 16%. It is important to assure the safety of all payment methods, as Finns are extremely concerned about the safety of their payment information. Major payment gateways supported in Finland are, PayTrail, PayPal, Klarna, Checkout, Mash, Stripe and Bambora. When it comes to delivery options, Finns prefer to collect from a parcel machine or from a distribution point. Most of them are located next to grocery stores, kiosks or shopping malls. Only 13 percent prefer home deliveries, which can partly be explained by the fact that Finns like to collect packages at a time convenient to their own schedule. 

Digital marketing and social media 

Digital marketing in Finland has grown rapidly in the past few years and more Finnish service providers, including traditional marketing companies (Suomen Digimarkkinointi, Avidly), have arisen to help companies to provide their services. Facebook and Google have established strong positions in Finland, accounting for approximately half of all digital marketing nationwide. 

Nearly all consumers use social media and instant messengers. Search engines, online stores and video websites are the most used types of websites. Google with 96 % is the most used search engine and others like Bing (14 %) and DuckDuckGo (9%) come far behind. Search engines are the most important source of information when searching product information. Finns also check manufacturer and brand websites more than other Europeans. Instant messaging is the most popular social media channel and WhatsApp is the most popular followed by Facebook Messenger, others following far behind. 

There are several smaller seminars on ecommerce around Finland, but the biggest one is the yearly expo Smart Commerce. The next one will be held on February 1st, 2023, in Helsinki. 

 

Resources 

Finnish Post Survey 2020 & 2021 

PostNord 2020 Survey 

PayTrail 

Finnish Commerce Federation 

Statista 

Information 

Interested parties may contact Commercial Specialist Tiina Ketelä-Juvonen, tiina.ketela@trade.gov