The eCommerce market in Lithuania is expected to increase over the next few years, it is predicted that the compound annual growth rate for the next four years will be 5%. Compared to the year-over-year growth of 14% between 2020 and 2021, this decrease in yearly growth suggests a moderately flooded market. However, an indicator of growth potential is the online penetration of 46% in Lithuania. 46% of the Lithuanian population have bought at least one product online in 2021.
Toys, Hobby & DIY are the largest segments in Lithuania and account for 42% of the eCommerce revenue in Lithuania. They are followed by Electronics & Media with 28%, Fashion with 12%, Furniture & Appliances with 11%, and Food & Personal Care with the remaining 7%.
- The EU’s Electronic Commerce Directive (2000/31/EC) establishes rules for online services throughout the EU. The Directive requires providers to abide by the relevant rules and regulations in the country in which they are established. Online providers must respect consumer protection rules such as including contact details on websites, clearly identifying advertising, and protecting against spam. The Directive also exempts companies from legal liability for unknowingly hosting illegal content or when third-party intermediaries transmit illegal content. In 2012, the European Commission issued its work plan to facilitate cross-border online services and reduce barriers.
- In 2003, the EU began applying Value Added Tax (VAT) to sales of Electronically Supplied Services (ESS) by non-EU based companies to EU-based non-business customers. U.S. companies subject to the rule must collect and submit VAT to EU tax authorities. European Council Directive 2002/38/EC offered additional guidance on EU rules for charging VAT. These rules were extended indefinitely following the adoption of Directive 2008/8/EC.
- U.S. businesses affected by the 2003 rule change are primarily those based in the United States and selling ESS to EU-based, non-business customers or to businesses that are EU-based and selling ESS to customers outside the EU who no longer need to charge VAT on these transactions. Such businesses have a number of compliance options. The Directive established a special scheme simplifying registration with each member state and allowed companies to register with a single VAT authority in the country of their choice. Companies may have to charge different rates of VAT according to where their customers are based, but VAT reports and returns are submitted to just one authority. The VAT authority responsible for providing the single point of registration service is then responsible for reallocating the collected revenue among other EU VAT authorities. Additional information on this process is available at https://ec.europa.eu/taxation_customs/business/vat_en.
3. Consumer Behavior-
Lithuanians have different preferences depending on income or age group. Therefore, the market is highly fragmentated. Wealthier customers often choose the brand as the main determinant of purchases, while prices are a determinant of quality for Lithuanians. Importantly, for these consumers, products from abroad are also synonymous with high quality. The Lithuanian economy is growing all the time, which builds consumer confidence. More and more customers pay attention to service and loyalty programs.
4. Intellectual Property Rights -
IP protection in Lithuania is strong, enforcement is good. Infringements and theft are uncommon. Lithuania is not listed in neither USTR’s Special 301 report nor in the Notorious Market report.
5. Local service providers overview -
The biggest player in the Lithuanian eCommerce market is pigu.lt. The company had revenue of US$79 million in 2021. pigu.lt is followed by senukai.lt and varle.lt as the second- and third largest eCommerce retailers with US$69 million and US$34 million, respectively. Altogether, the top three firms account for 15% of online revenue in Lithuania. In Lithuania, Omniva is the most frequently offered delivery service provider among online stores. DPD and Lietuvos Paštas are among the top three shipping service companies offered by online retailers in Lithuania, at rates of 47% and 32%.
Data Privacy and Protection
The General Data Protection Regulation (GDPR), which governs how personal data of individuals in the European Union may be processed, went into effect on May 25, 2018. The GDPR, which replaces the Data Protection Directive 1995/46, is a comprehensive privacy legislation that applies across sectors and to companies of all sizes. Personal data as defined by the GDPR as any information that relates to an identified or identifiable living individual (a “data subject”) such as a name, e-mail address, tax ID number, or online identifier. Processing of data as defined by the Regulation includes actions such as collecting, recording, storing, or transferring data. For more information, please visit: https://www.trade.gov/market-intelligence/eu-general-data-protection-regulation-gdpr