The country which gave us ABA, Ace of Base, and the Cardigans is not only a great exporter of music, but also a state whose modern and friendly business environment makes it a favorable place to export to. Despite its high cost in manpower, a rigid labor legislation and high individual tax rates, Sweden is still one of the most competitive economies in the world.
Sweden is strongly dependent on foreign trade. Their efforts to stay competitive include a direct tax system, user-friendly bureaucracy, low corporate tax, contribution exceptions, and different support for investment. Swedes are also recognized for being open-minded to new products and ideas, and the country’s economy is at the forefront of new technologies and innovations. Its labor force is well-educated, skilled, and multilingual. The access to capital is also relatively easy.
Sweden is a gateway to Norther Europe and the Baltic sea region with access to new products, skills, innovations and technologies. In this guide, we will guide you through the process of reaching Sweden’s consumers, successfully making sales on e-commerce channels, and getting your products to reach the desired consumers.
Almost three in four Swedish households with access to the internet have ordered something online in the last twelve months. Almost three in ten Swedes order something online at least once a month. Although ecommerce is widely distributed troughout the country, the most active ecommerce customers can be found in inland municipalities in the north of Sweden.
The most frequent online shoppers are 45-59 years old
Sweden has seen good growth in retail ecommerce sales over the past few years, and 2014 was no exception. According to a February report from PostNord, Svensk Digital Handel and HUI Research, digital buyers in Sweden spent a total of SEK42.9 billion ($6.25 billion) on online purchases of retail goods last year, representing 16% growth from 2013. As such, digital accounted for 6.4% of total retail sales in the country in 2014. While internet users in Sweden still tended to prefer domestic ecommerce sites when it came to buying on the web, one-third of digital buyers told PostNord that they had made an online purchase of a retail good from a foreign merchant in 2014. In all, cross-border sales represented more than one-quarter (26.8%) of last year’s total retail ecommerce sales, or SEK11.51 billion ($1.68 billion). As in 2013, consumer electronics was the single-largest sector in terms of retail ecommerce sales in Sweden last year. PostNord found that digital sales for that industry reached SEK10.3 billion ($1.50 billion) in 2014, up 17% over the previous year. The strongest growth, however, was seen in digital sales of children’s items/toys at 38%, followed by construction at 33%. Nevertheless, these two categories accounted for just SEK1 billion ($145.7 million) and SEK2 billion ($291.5 million) of total retail ecommerce sales in Sweden in 2014.eMarketer expects retail ecommerce sales in Sweden to grow by 11.7% in 2015 and reach $9.71 billion, representing 3.8% of total retail sales in the country.
Nearly a quarter of merchants are seeing positive ROI from their social media spend, with Facebook by far the most popular. YouTube has a place however as do Twitter and Snapchat. 42% of Swedish respondents are using Instagram daily. Sweden has the second-highest penetration of teen snapchat users, behind Ireland. This doesn’t suggest that there are more users in this demographic than in the US, merely that a higher proportion of ‘mobile’ teens use the app.
Fashion is the most popular online retail sector in Sweden, followed by media and home electronics. Travel is by-far the most popular vertical for purchases via a mobile device while apparel and electronics are showing signs of expansion. The key brands to watch, especially in the international space, are Amazon, CDon, eBay, HM.com and Zalando. CDon and Komple are particularly interesting brands worth investigating further.
Swedish online customers like to pay by credit card, with MasterCard and Visa being their most used cards. Online bank transfers are also popular as they are used by three in ten online customers. Almost the same amount of people prefer to pay per invoice cards.
Bank transfer is a popular method in Sweden. This service sees the consumer making a ‘push’ payment from their bank account to that of the merchant. Again, this provides consumers with additional confidence as they feel more in control of the transaction. As there are large banks in Sweden, it is worth using a partner that can aggregate these services as part of the checkout process.
Especially in Sweden, more and more people are using their smartphone to shop online. Over there 20% of residents used this device for ecommerce purchases during the second quarter of this year (2015).
The global rank also serves to highlight how advanced Swedish consumers are in the adoption of smartphones yet, although the usage of mobile devices is growing, it is also important to note that desktops are still an important component in the digital journey. In Sweden, a mobile device is the preferred choice. Apple smartphones hold a slim majority over Android devices. A recent study by the Nordics Smarter eCommerce Group showed that 80% of Swedish retailers use a responsive site to optimise the customer experience. App usage is quite low at 6%.
Reinforcing concerns around simple payment methods, the following graphic highlights payment method availability as the biggest concern by respondents to a DIBS survey.
A 2014 survey by Bring highlighted security as the most important consideration for consumers shopping online.
Direct Link is a fully-owned subsidiary of PostNord, the merged Swedish and Danish post offices, offering a gateway to the Nordics through customised B2C delivery and distribution solutions. It can reach 100% of addresses in all four Nordic countries and o ers a choice of options with light goods directly to the customer’s mailbox, a collection point or home delivery with a ‘leave in safe place’ option.
Direct Link operates facilities in the UK, Germany, US, Hong Kong, Singapore and Australia providing services with the following transit times (subject to point of origin):
In addition to using the local postal service provider as the nal delivery agent, retailers will be able to access services through their own domestic postal providers.
There are a number of global carriers able to provide collection, distribution and delivery into the Nordics (using their own operations or local partners). The main ones are:
UPS – Offers a range of services and delivery times to the Nordics subject to country of origin and the specific destination
Fed Ex – Offers two main services to the Nordics with delivery times subject to country of origin and the specific destination:
DHL – Offers one main service option, namely – Export Express Worldwide – guaranteed delivery by the end of the next possible working day. As an example, from the UK to the Nordics this will typically be the next working day subject to the exact delivery address.
TNT – Offers a range of international services to the Nordics starting from next day by 09:00 subject to country of origin and the specific destination. As an example, from the UK:
TNT does not offer its lower cost day-defined Economy Express service from the UK to the Nordics
DPD – DPD is particularly of note in the Nordic market because PostNord (the postal service provider for Sweden and Denmark) is a strategic partner and its delivery partner in all four countries. It offers a range of service options to the Nordics with the examples below showing transit times from the UK in business days:
In respect of e-retail deliveries perhaps the two most interesting services are:
PostNord was formed as a merger between Post Danmark (Denmark) and Posten AB (Swedish Post) and now provides domestic ecommerce delivery services.
The delivery operator selected will be able to provide full details and advice on the necessary documentation and processes and some can go further by pre-clearing orders while the goods are in-transit or at the start of their journey using a consumer duty paid process. This can be done using the HTS code assigned to each product category and can reduce delivery times and remove a potential barrier of having the goods held when they arrive in country. Retailers are therefore advised to specifically ask what their chosen delivery partner can do to facilitate customs clearance and duty calculation / collection.
Fyndiq AB is a Swedish fast-growing ecommerce company that, since its inception in 2010, established links with over 1,500 traders who together sell over 500,000 products in categories such as fashion, baby, beauty & health, electronics, sports & leisure, entertainment, mobile & tablet PCs, home etc.
The Swedish CDON Marketplace has over 2 million active users and sells products from other merchants as well as its own inventory.
Tradera (eBay) Tradera.com is one of the leading online commerce services in Sweden, with over 2.5 million members and stores, 1.3 million visitors per week and over one million listings. Although Tradera welcomes members from all over the world, most are Swedish.
The national tax laws of each EU member are framed within certain parameters specified by the EU in the Sixth Council Directive 77/388/EEC (as amended) on the common system of VAT and the uniform basis for its assessment. Under this directive, a common VAT system is compulsory for all member states.
The European Union Law has important influence on Swedish Tax Laws. Sweden became a member of European Union in January 1, 1995 and while The Ministry of Finance and the Swedish Tax Administration independently administer the Swedish tax system, this administration happens in concert with European Union regulations.
In Sweden, the VAT is known as “moms” (short for mervärdesskatt). The standard VAT rate is 25 percent, the highest rate in the EU. VAT is a state sales tax that is levied on all increases in value throughout the production and distribution chain and reported to the tax authorities. E-commerce transactions in Sweden are taxed in the same way as regular purchases, with the VAT rates applied to digital goods and services.
Sweden has adopted the provisions of EU Directive 2002/38/EC on VAT on ecommerce. As such, non-EU businesses supplying software updates, electronic data, distant learning, online subscriptions, or other electronic services in Sweden, are subject to VAT in accordance with the location of the customer, not the supplier, as per the standing EU Directive.