Estonia, Good for Business, Internet, Retail
International Internet Magazine. Baltic States news & analytics
Wednesday, 08.05.2024, 05:46
Estonia's e-commerce turnover hits EUR 1.4 b in 2019
Tonu Vaat, manager of the Estonian E-Commerce
Association, said that online sales already account for about one-fifth of
total retail trade, being the most important sales channel for many businesses.
"It's important to note that e-shopping outside
Estonia, especially in third countries, including Asia, has grown by as much as
half in the past six to seven years and, all told, Estonians make purchases in
Estonian and foreign e-stores in equal amounts," Vaat said.
The head of the Estonian E-Commerce Association described
growth in e-commerce from Asia, particularly China, as impressive. Despite
that, Estonian e-retailers have been very successful in the past year, as
shopping from Estonian e-stores grew 36 % and shopping from foreign e-stores 18%
in 2019.
Vaat said the scope of Chinese e-commerce is demonstrated by
the numbers of standard mail arriving from Asia. He described it as noteworthy
that the number of international items of correspondence has grown to 2.5 mln
items in the past five years.
"An average Estonian sends only one standard letter a
year. How many of us have got new friends and acquaintances abroad who send
standard letters? This increase in standard letters by several mln clearly
demonstrates only one thing -- these are e-commerce purchases that are arriving
in our mailboxes mainly from Asia, and without paying tax," Vaat said.
According to the Competition Board, the three biggest
providers of courier service in Estonia -- DPD, Itella and Omniva
-- hold a market share of 80% combined, with DHL and UPS having another 10%
between them. Hence the five companies account for 90% of the market.
"According to the association, the parcel volume of the
five biggest courier companies is approximately 20 mln units a year, of which 9
mln are cross-border parcels," Vaat said, adding that about half of the
total parcel volume was moving via Omniva.
Estonians used a bank link in paying for 70% of e-commerce
purchases last year, a ratio higher than in most European countries. About
80-90% of purchases and first inquiries about products were made via mobile
phone in 2019, data from the major e-retailers shows.
In at least 90% of all cases the customer's journey to
getting familiar with a product, a service or a business starts on the
internet, Vaat said, urging retailers to be more active investing in e-commerce
channels with a view to converting the investment into sales.
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