E-commerce turnover grew 26 percent hitting €1.4 billion in 2019 ({{contentCtrl.commentsTotal}})

The turnover of e-commerce in Estonia grew 26 percent year-on-year to €1.4 billion in 2019, and the average monthly turnover of e-commerce during the year was €118 million, figures from the Bank of Estonia show.

Tõnu Väät, manager of the Estonian E-Commerce Association, said online sales already account for about one-fifth of total retail trade and is the most important sales channel for many businesses.

"It's important to note that e-shopping outside of 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," Väät said.

He 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 percent and shopping from foreign e-stores 18 percent in 2019.

Väät 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 million 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 million clearly demonstrates only one thing - these are e-commerce purchases that are arriving in our mailboxes mainly from Asia, and without paying tax," Väät said.

The Competition Board said the three biggest providers of courier service in Estonia, DPD, Itella and Omniva, hold a market share of 80 percent combined, with DHL and UPS having another 10 percent between them. Hence the five companies account for 90 percent of the market.

"According to the association, the parcel volume of the five biggest courier companies is approximately 20 million units a year, of which nine million are cross-border parcels," Väät said, adding that about half of the total parcel volume are moving via Omniva.

Estonians used a bank link in paying for 70 percent of e-commerce purchases last year, a ratio higher than in most European countries. About 80-90 percent 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 percent of all cases the customer's journey to learning about a product, a service or a business starts on the internet, Väät 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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Editor: Helen Wright

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