General 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 2022 annual Country Report for Sweden by ecommerceDB states that there were 8 million users in Sweden with 77 percent eCommerce penetration.
According to the annual e-commerce report done by Postnord and HUI Research, the total spending on eCommerce goods in Sweden decreased by 7 percent during 2022 from roughly $13.8 bn (2021) to $12.8bn. The decrease is largely attributed to inflation and the recession seen in Europe as well as Russia’s invasion in Ukraine. Consumers have also returned to physical stores after two years of pandemic restrictions. The Swedish B2C eCommerce market in 2022 was characterized by a negative trend for most industries compared to the e-commerce boom of the pandemic.
The two industries which saw a positive trend were clothing and shoes (2 percent) and pharmacies (10 percent). The clothing industry is seeing an upswing thanks to consumers actively looking for more affordable alternatives, as well as a growing interest in the circular business model and second-hand e-commerce. Online pharmacies gathered a loyal customer base, particularly among older consumers, who have gotten used to ordering their medicine on-line. Pharmacies also see growth in skincare, make-up, and supplements.
In 2021, 17 percent of online shopping was spent on services ($3.9 bn), 22 percent on travel ($4.9 bn) and 61 percent on goods ($13.8 bn). The most common product categories purchased online in Sweden in 2022 were home electronics, clothing, pharmaceuticals, sporting goods, and home furnishing. Services purchased online in 2021 include streaming services, insurances, online betting, digital media, donations to charities and tickets to cultural and sporting events. The top eCommerce sites in Sweden are Apotea, Zalando, Amazon, H&M, Adlibris, Tradera, Apoteket, Webhallen, CDON and Inet.
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 Digital Single Market Strategy, 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 on the EU’s official website.
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, electronic identification, consumer sales, consumer credit, consumer protection, 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 also been implemented and is charged by the forwarding agent for the processing of the package. While this fee does not prevent eCommerce from the U.S, it has likely decreased demand for smaller ticket items. Goods valued above $150 can also be subject to duties. These added administrative step increases delivery times, a factor that is of high importance to the Swedish eConsumer.
Consumer Behavior
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 methods to replace the current complicated payment processes and limited payment options. The latter 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 10,5 million inhabitants, 8.6 million were using Swish as of May 2023. The most used electronic identification system in Sweden, BankID, has a high share of users evenly distributed across the ages 13-81+ years. In 2022, nearly 99.2% of the population aged 18-65 years used BankID.
Ten percent of Swedish consumers buy from foreign websites, mainly from Germany, China, the U.K, Denmark, 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, as well as 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.