Finland - Country Commercial Guide
eCommerce

Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.

Last published date: 2021-09-14

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. 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. Consumers bought clothes, take-away food, cosmetics and electronics more online than before. According to Finnish Post B2B research 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. 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.

Assessment of Current Buyer Behavior in Market

Covid-19 increased buying online from domestic sites from previous year’s 61 percent to 64 percent in 2020, according to Finnish Post survey. The reasons behind this were that buyers wanted to favor domesticity and local when choosing online sites. 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. There are some behavioral differences among sex when it comes to buying online. Price and possibility to compare them influence men more than women. Ease and to avoid crowds in stores are important factors for women. When it comes to delivery costs differences disappear. Both sexes in all age groups interrupt the shopping when the delivery costs are too high. Finns are conscientious buyers, which means that two third of buyers online did not return the purchase, according to ecommerce Finland 2020 report. Covid-19 era increased the amount of active online buyers. As in 2019, 65 percent of age group 18-74 years bought online, in 2020 the figure was 73.2 percent.

The top industries selling online in Finland are clothing, home electronics and books. Travel and services, such as train, hotel and plane tickets, games and digital media, are also selling well online, with exception to 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) according to the Finnish Post Survey 2020.  It remains to be seen if the increase during Covid-19pandemic will change consumer behavior permanently. In 2020, the top sites, by net sales, for online shopping in Finland were Zalando, Verkkokauppa.com, Amazon.com, Gigantti and H&M.

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. A Postnord 2020 survey shows that the five most popular countries from which Finns buy online are China (49 percent), Germany (37 percent), the United Kingdom, Sweden and the United States all together 24 percent). 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. Average purchase per year in 2020 was $900,00/pers.

Local eCommerce Sales Rules & Regulations

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.

Local eCommerce Business Service Provider Ecosystem

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 risen 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.

Last mile logistic firms are still taking baby steps in Finland. Finnish Post launched their own at the end of 2019 called Box. It has so far only one location, but it works as a test platform for other types of services for consumers around Finland. Other existing ones are Swedish 

Unifaun’s Delivery Checkout and Budbee. Finnish consumers are enthusiastic in picking up their online purchases at parcel machines and lockers. 35 percent prefer  this method of delivery. In second place was collecting it from a distribution point. The amount of parcel machines are proliferatering and ex. Budbee announced in 2021 to add over 100 new parcel machines all over Finland.

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 percent were using it as payment method in 2020 the percentage had gone up to 16. It isimportant 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.There are several smaller seminars on ecommerce around Finland, but the biggest one is the yearly expo Smart Commerce. The last one was held on January 28th, 2021, in Helsinki.

Resources

Finnish Post Survey 2020

PostNord 2020 Survey

PayTrail

Finnish Commerce Federation

Vilkas Group Oy

Information

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