Sweden E-commerce Market Overview
Sweden is one of the most connected societies in the world and consumers have achieved a high level of maturity when it comes to eCommerce. Consumers in Sweden are technology savvy and qualified spenders, and at the top of eCommerce usage in Europe and globally. The 2021 annual Country Report for Sweden by ecommerceDB states that there were 8 million users in Sweden with 80 percent eCommerce penetration.
According to the payment provider Nets’ annual survey Swedish eCommerce 2021, the total spending on eCommerce in Sweden increased by 10 percent during 2021 from roughly $20,3 bn (2020) to $22,3. The Swedish B2C eCommerce market was characterized by a will to return to a pre-pandemic life during 2021, with a 67 percent increase in travel and tourism sales ($4,9 bn) compared to 2020. Litium’s report on Nordic Digital B2B Commerce states that there is a growing trend of eCommerce within the B2B segment, partially due to the COVID-19 pandemic, with key driving forces being to simplify administration and streamline sales.
In 2021, 17,3 percent of online shopping was spent on services ($3,8 bn), 22,2 percent on travel ($4,9 bn) and 60,5 percent on goods ($13,5 bn). The most common product categories purchased online in Sweden in 2021 were pharmaceuticals, clothing, beauty products, groceries, and takeaway food. Services purchased online in 2021 include streaming services, insurances, online betting, digital media, donations to charities and tickets to cultural and sporting events.
The ecommerceDB annual report on eCommerce in Sweden states that smartphones are the most frequently used devices for B2C online shopping in Sweden. Online shoppers are most price-oriented about clothing which also has the highest return rates in Sweden. The top eCommerce sites in Sweden are NetonNet, Elgiganten, Apotea, Zalando, Apotek Hjärtat, Apoteket, Mathem, H&M, Ikea, and Apple.
Legal and Regulatory Environment
Sweden is a member of the EU and therefore U.S. companies with an online presence offering/selling goods and services to Sweden must comply with EU regulations. The Electronic Commerce Directive (2000/31/EC) (e-Commerce Directive), the European General Data Protection Regulation (GDPR), and other regulations pertaining to e-Commerce in the EU can be found in the EU Country Commercial Guide (https://www.trade.gov/knowledge-product/european-union-ecommerce).
Sweden has implemented the EU regulations into Swedish law. Relevant regulations can be found in the areas of contracts, marketing, distance and off-premises contracts, electronic communications, consumer sales, consumer credit, price information, and product safety. As laws affecting eCommerce are continuously updated, it is recommended that U.S. companies considering conducting online business in Sweden seek legal guidance.
Issues that U.S. companies can potentially face in Sweden include:
B2B: Swedish importers are legally responsible for the products they import to Sweden and will therefore only be interested in importing products that fulfill EU and Swedish regulations and requirements.
B2C: Swedish consumers are obliged to pay Swedish VAT (usually 25%), which is not included in on-line purchases from outside the EU. There is no de minimis amount for such purchases. As of March 1, 2018, an administrative fee has been implemented and charged by the forwarding agent for the processing of VAT upon the consumer’s receipt of the package. The fee is $8-13 per non-EU package, depending on the value of the goods, and in addition to the product’s VAT. While this fee does not prevent eCommerce from the U.S, it will likely decrease demand for smaller ticket items. Goods valued above $175 can also be subject to duties. The added administrative step increases delivery times, a factor that is of high importance to the Swedish eConsumer.
According to the payment provider Nets’ annual survey Swedish eCommerce 2021, the primary reason for Swedes to shop online is that it is more convenient than shopping in physical stores. Other key decisive factors include lower prices, avoiding crowds, and greater product ranges. There is an increasing demand for fast and convenient payment method to replace the current complicated payment processes and limited payment options, that are both listed as some of the main reasons for Swedish online shoppers to refrain from completing their online purchases.
Debit and credit cards remain the most used payment method on the Swedish eCommerce market, followed by Swish (Swedish mobile real time payment application), invoices, direct bank transfers, PayPal and Apple Pay. There is an increasing trend in using Swish as the preferred payment method. Out of 10,2 million inhabitants, 7,9 million were using Swish as of April 2021. Statista’s 2021 report on Digital Payments in Sweden also lists Klarna, Qliro, Trustly and PayEx as other commonly used payment methods. The most used electronic identification system in Sweden, BankID, has a high share of users evenly distributed across the ages 13-81+ years. In 2020, nearly 99% of the population aged 21-50 years used BankID.
Twenty percent of Swedish consumers buy from foreign websites, mainly from Germany, the United Kingdom, Denmark, China and the U.S. The main reasons for shopping abroad are that the products cannot be found in Sweden, the prices are lower, and the selection is wider. The difficulty to return items is the number one reason Swedes do not shop abroad to a greater extent. Other reasons include the total cost including shipping and customs fees becoming too high, long delivery times, and the desire to support businesses in Sweden.
There is an increasing consumer demand for zero-emission or fossil-free deliveries in Sweden. The PostNord annual report states that sustainable delivery alternatives are increasingly important to Swedish consumers, many of whom are willing to wait 1-2 days longer to receive such a delivery.