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Market Insights

Discover new customers and markets

Through our annually conducted studies of the development of e-commerce, we have gained deep knowledge of consumer behavior and general conditions for e-commerce in many different markets. And although e-commerce is growing at an impressive rate in many countries around the world, there are some markets and regions that have developed in a particularly interesting way. To meet this accelerating demand, we have put together additional
solutions which are tailored to each country’s and region’s specific situation. Our offer includes customs clearance and delivery options depending on weight, value and specific commercial needs.

Direct Mail

Yes, our world is becoming ever more digital. However, physical direct mail is still very much a well-tested and proven way of communicating, both in terms
of customer retention and in order to acquire new customers. We offer a range of services within this segment.

Targeting & Addresses
(Available for the Nordic countries)

When you know the socio-demographics of your best customers in your other markets, such as age, educational level, type of residence, income level and gender etc., then we can utilize this information to target potential customers who share the same characteristics as your existing customers elsewhere. We can provide addresses to all households in the Nordic countries.

Customer analysis & Campaign follow-up
(Available for the Nordic countries)

When you have begun your marketing activities and started to build up a customer base in your new market, we can execute follow-up analyses to monitor the socio-demographic attributes of your most valued customers and then direct upcoming marketing efforts to the target groups and geographical areas where the chances of finding new profitable customers are the best.

Key Market Solutions

Cross-border e-commerce is growing. And while markets such as Australia, Israel, Russia and USA are experiencing high growth, even specific regions within the European Union, such as the Nordics, Poland, and UK, are showing impressive growth.

To meet this rising demand, we have developed additional solutions which are adapted to each country’s situation.

THE AUSTRALIAN E-COMMERCE MARKET

With one of the largest online populations in the Asia-Pacific region, and along with its stable economy, Australia is helping the global e-commerce market to positively develop. Out of 20 million inhabitants over 15 years of age, 65% are online consumers. Approximately 70% of total online consumers purchase from abroad. This makes Australia’s share of cross-border shoppers among the world’s largest.

About Australia

The average Australian online consumer is tech-savvy and digitally mature. Close to 30% of smart phone and tablet users have made online purchases via their devices – 49% of Australians own more than five devices such as computers, smartphones and tablets.

Reasons for cross-border purchases

Australia has a tax exemption on foreign purchases up to a value of AUD 1,000 making it possible to find online bargains overseas. A good price is a strong argument. Apart from the latter, getting good deals, better availability and a bigger range of products abroad, are what Australians say are reasons for buying cross-border. Currently, the US, the UK and China are the most favored overseas markets.

The dominant e-commerce overseas categories are Books, CDs, Clothing & Footwear, Digital Cameras and Cosmetics.

Delivery, Returns and Payment

Australian online consumers accept that cross-border deliveries will have a longer delivery time. But on the other hand, they are quite sensitive to costs associated with delivery. Most cross-border consumers expect low-cost delivery as well as free returns.
Regarding online payment methods, around 85% of Australian online consumers prefer to pay with credit and debit cards.

E-commerce companies from the northern hemisphere should also consider counter-seasonality from both a marketing communication and product perspective.

Key Statistics

Population: 24 million
Language: English
Currency: Dollar (AUD)
GDP: USD 1.24 trillion
Internet Penetration: 85%

Brazil – a huge and fast-growing e-commerce market

Brazil is the largest economy in South America. It is also the leading e-commerce market. In fact, globally, the Brazilian e-commerce market is the 9th largest. And while its gross domestic product declined in recent years, it’s still the market selected by cross-border retailers who want to establish themselves in South America. Brazil’s e-commerce market is projected to increase substantially over the next few years and is forecasted to reach over USD 29 billion by 2018.

Big market players already established

Companies coming from the US and China are the largest e-commerce merchandisers so far – selling their goods to the estimated 40% of Brazilian online consumers who make cross-border purchases. Their main product categories are Fashion & Accessories and Home Electronics.

Consumer Behavior

The number of online consumers is still relatively low compared to the total number of inhabitants yet the figures are steadily rising – today’s approximately 37 million online shoppers are expected to rise to 47 million within two years.

The search for attractive prices characterizes the consumer behavior in this market. Value for money is highly prioritized and Brazilian consumers in general are partial to price over delivery speed. The most preferred payment method is by far credit cards. It is very common practice to split payments by credit cards into multiple installments.

Key Statistics

Population: 205 million
Language: Portuguese
Currency: Brazilian Real (BRL)
GDP: USD 1.77 billion
Internet Penetration: 65%

 

THE EUROPEAN E-COMMERCE MARKET

The larger e-commerce markets in northern and central Europe are highly developed. On the other hand, markets in the south and east have lagged somewhat, but are starting to catch up. Countries such as Spain, Italy and Poland are quickly increasing their Internet penetration – these up-and-coming e-commerce markets are definitely promising.

The most preferred online product categories in Europe are Clothing & Footwear, Home Electronics, Books, and Media Products. In recent years, there has been an increase in Cosmetics and Home Furnishing products.

Cross-Border purchases offer many benefits

As in most other parts of the world, conducting cross-border online purchases is becoming the norm among European consumers. The lower prices found in other countries is a strong driver for these types of purchases. It is also easier to find other products not easily available in the consumers’ own home market.

When Europeans purchase goods from other countries within Europe, the UK and Germany remain by far the most popular countries to buy from. Outside of Europe, the US is still a popular market, but the cross-border purchases from China have the highest volume growth.

Consumer Behavior – Multiple delivery & payment options needed

As for preferred payment methods, the European markets are quite diverse. While the use of debit or credit cards and invoices are favored in several markets, Pay Pal, or a similar payment option, is dominating the preferences in Spain and Italy. In Poland, more than 20% prefer to pay by cash on delivery (COD). The most important factor regarding delivery in most of the markets is cost.
Demands for faster delivery times have increased; a majority of online consumers expect the delivery to happen within 2-5 days. Yet, more buyers increasingly expect 1-2 days’ delivery. The European online consumers also find it positive to be able to choose where their products are to be delivered. Getting purchased goods delivered in the consumers’ own private mailbox is a popular alternative as well as picking it up themselves at service points. In some markets, buyers want to be able to choose a specific time of day (evening or daytime) for their deliveries.

The search for attractive prices characterizes the consumer behavior in this market. Value for money is highly prioritized and Brazilian consumers in general are partial to price over delivery speed. The most preferred payment method is by far credit cards. It is very common practice to split payments by credit cards into multiple installments.

Key Statistics

Population: 511 million
Most common languages: English, French, German and Spanish
Predominant currency: Euro (EUR)
GDP: USD 14.9 trillion
Internet Penetration: 44%–98%

 

THE ISRAELI E-COMMERCE MARKET

Despite its modest population (8.2 million), Israel is an interesting e-commerce market. This is especially true from a cross-border perspective and is due to certain domestic circumstances.

The number of Israeli businesses selling online are few – with prices that are usually substantially higher than those of cross-border retailers. This is because of high value-added taxes (VAT) as well as monopolies on numerous consumer goods. Nearly 80% of Israeli online shoppers have bought products from abroad, predominantly from China, the UK and the US.

High Growth Projections

Between 2009 and 2014, e-commerce in Israel showed a compound annual growth rate (CAGR) of close to 25% which was more than double the global growth rate. E-commerce revenue in Israel is forecasted to reach USD 3.6 billion in 2016 and rise to USD 4.9 billion in 2020.

Israel is a fairly-digitalized country with a 75% Internet penetration and a smartphone market of over 60%. The dominant e-commerce categories in Israel are Home Electronics, Fashion & Footwear and Media Products. Housewares and groceries are also popular to buy online.

Israel’s official languages are Hebrew and Arabic. However, a clear majority of the population speaks and reads English. Communicating in Hebrew or Arabic is not considered necessary.

Delivery and Payment Options

The Israeli Post has around 1,000 service points for consumers who choose to pick up their online purchases. There are also a number of companies offering home delivery as well.

A majority of Israeli online consumers prefer to pay for their purchases by credit or debit card. The second most popular payment method is e-wallet services such as PayPal.

Key Statistics

Population: 8.2 million
Languages: Hebrew, Arabic, English
Currency: Shekel (NIS)
GDP: USD 286 billion
Internet Penetration: 75%

THE NORDIC E-COMMERCE MARKET

The Nordics – Denmark, Finland, Norway and Sweden – have a very high level (95%) of Internet penetration; a large proportion (89%) of the population are active online consumers. Nordic residents are also very keen to buy from abroad with 73% doing so. The Nordic market has one of the highest per-capita e-commerce spendings in Europe.

Steady growth projected even in mature market

The Nordic countries are considered mature e-commerce markets and online spending is projected to hold steady at 12-15%. The most popular product categories in the Nordics are Clothing & Footwear, Home Electronics and Media Products with Cosmetics & Skincare bringing up the rear. The UK, US, China and Germany are the most favored markets chosen when Nordic consumers purchase online from abroad.

Consumer Behavior – Delivery & Payment Options

Nordic e-commerce customers are quite sensitive when it comes to delivery costs. A reasonable price for delivery, or better yet, free delivery, can be an effective argument when selling to the Nordic markets. On the other hand, a very small part of the consumers expect delivery within 1-2 days. A majority are satisfied with a 3-5 day delivery time frame; as many as 25% are willing to wait for delivery 6 days or more.

The delivery preferences, like in most other markets, vary rather widely. But it’s clear that the Nordic consumers prefer delivery to their own private mailbox or to pick the products up themselves at a partner outlet or service point.

The most preferred payment options in the Nordics are debit and credit cards. However, a large part (27%) of the consumers prefer to pay by invoice after receiving the goods when that alternative is given. A good idea would be to offer as many payment options as possible.

Key Statistics

Population: 25 million
Languages: Danish, Finnish, Norwegian, Swedish
Currencies: Danish Krone (DKK), Euro (EUR) in Finland, Norwegian Krone (NOK), Swedish Krona (SEK)
GDP: USD 1.3 trillion
Internet Penetration: 95%


Direct marketing and customer segmentation in the Nordics

Direct mail delivered to a person’s physical mailbox holds a strong position in the Nordic media landscape. Both addressed and unaddressed Direct Marketing to a mailbox is tangible and this physical aspect is known to work well. This fact, in combination with analysis and our highly-developed tools for customer segmentation, opens interesting possibilities for marketing initiatives in all four Nordic countries.

If you know the socio-demographics of your key customers in your other markets, such as their:

  • age
  • type of residence
  • education level
  • marital status
  • group interests
  • income
  • gender,

then, we can utilize this information to target customers in our Nordic markets who share the same characteristics as your customers elsewhere.

When you have begun your marketing as well as building your customer base here, we can then create follow-up analyses to monitor the characteristics of your most-valued customers.

Direct Link can help you take that big step into the Nordic region – our home market. Watch this short video about how we help e-commerce businesses succeed in the Nordic market.

 

THE RUSSIAN E-COMMERCE MARKET

Russia is one of the world’s most populous countries with close to 144 million inhabitants – making it a potentially large e-commerce market. Russia has lagged behind most European countries in terms of Internet penetration but has been catching up in recent years; it currently has an estimated 70% usage. Around 84 million Russians over 16 years old are using the Internet. However, there are regional differences with the larger cities being far ahead of rural areas. The online e-commerce market represents approximately 4% of the total Russian retail market.

Currency fluctuation no strain for e-sales

There is an assumption that the negative trend of the country’s currency, the Russian ruble, has somewhat hampered cross-border growth. However, foreign retailers’ online sales to Russia have grown considerably over the past few years. The cross-border market was believed to reach USD 4.3 billion in 2016 – a growth of 25% compared to 2015.

Cosmetics, Clothes & Footwear, Books and Home Electronics are popular online product categories. The most popular cross-border market is China though this could be due to the currently weak position of the ruble together with China’s low prices.

Popular Payment Options

The average Russian online consumer tends to be a bit wary towards new or unknown brands. For new entrants establishing themselves in the Russian market, it is highly recommended to translate their web sites into Russian. As in most other markets, it is also advisable to offer a variety of payment methods. Though the use of credit and debit cards is increasing, many Russian online customers still prefer cash on delivery (COD) which in most other markets is very unusual today.

In terms of preferred delivery options, home delivery is most chosen. However, many online consumers also like to collect their wares from service points and retail stores. The local post office is also a popular alternative. One thing that should be noted is that over 60% of Russian online buyers state that they regard high delivery costs as an obstacle for their online purchases. A low price or better yet free delivery would be an effective argument for cross-border retailers to use in order for the purchase to go through.

Key Statistics

Population: 143 million
Language: Russian
Currencies: Ruble (RUB)
GDP: USD 1.35 trillion
Internet Penetration: 70%

 

THE US E-COMMERCE MARKET

Representing one of the largest global economies, the United States is a very attractive market for potential cross-border e-commerce retailers. The fact that over 70% of the online consumer population has made international purchases is another reason it’s a good market to get into. There are, however, some important aspects to consider before launching an e-commerce business targeted to US shoppers. The country consists of 50 states and is partly governed by its federal government and partly by the states’ own governments – each having its own individual structure, law and taxes.

Huge Consumer Retail Market

The US has a high level (87%) of Internet penetration. It is an excessively consumer-driven society where retail has always been a strong sector with annual sales of USD 3.5 trillion. E-commerce accounts for approximately 10% of this figure. Online marketplaces account for a sizeable part of total e-commerce sales.

The largest markets for cross-border online consumers in the US are China, the UK and Canada, and the most popular product categories are Clothes & Footwear, Cosmetics, Jewelry and Home Electronics. The main reasons for shopping from another country are competitive prices and the ability to find products not available at home. Many of the purchases are made on laptops with devices such as smart phones and tablets being used by around 15% of the consumers respectively.

Delivery and Payment Options

When it comes to different online payment methods, almost half of US online consumers prefer to use credit or debit cards. PayPal also has a strong position in the market with around 15% regularly using its services.

US online consumers are generally quite sensitive about costs connected to shipping and delivery. A majority think that free shipping is a very strong reason to buy a product online as well as getting specific information on total shipping and delivery costs. Studies have shown that 60% of online shoppers have abandoned their online shopping carts when surprise additions of other costs made the order more expensive than what was first expected.

Key Statistics

Population: 318 million
Languages: English (80%), Spanish (13%)
Currency: Dollar (USD)
GDP: USD 17.3 trillion
Internet Penetration: 87%

DIRECT: ENHANCED SERVICES

DIRECT is a comprehensive range of enhanced services for e–retailers, tailored for effective, fully tracked deliveries of your customers’ parcels up to 30 kg (subject to quotation). Available for Europe, USA, Australia and the Far East.

Combining simple integration, online tracking and electronic notifications with flexible delivery options, DIRECT gives you fast and reliable access to your customers in key markets globally.

More information about DIRECT (pdf) »

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