The Finish e-commerce market might be small compared to more populous countries, but Finns are generally well-off, digitally fluent and enjoy shopping online. This makes Finland an appealing target market for e–commerce retailers.

Numbers and facts about Finland

Even though Finland is nearly as large as Germany, with an area of 338,440 square kilometers, it is home to only five and a half million people. The southern part of the country is the most densely populated. On a peninsula jutting into the Gulf of Finland, you’ll find the EU’s northernmost capital city: Helsinki. Approximately 1.4 million residents call this city and its surrounding metropolitan region home.The average population density is only 18 people per km2; however, this is misleading, as most of Finland is covered in forest and 87% of the country’s population live in urban areas.

As one of the five Nordic countries, Finland shares its borders with Sweden to the northwest, Norway to the north, and Russia to the northeast. In addition to numerous flights to Helsinki, the capital can be easily reached by an Baltic Sea ferry from St. Petersburg, Sweden, or Estonia.

86% of Finland’s land is covered by forests, which are still home to moose, reindeer, brown bears, and wolves. Aside from that, the landscape is dotted with an astounding 188,000 lakes, relics from the Ice Age. One-third of Finland lies north of the Arctic Circle, meaning that in Lapland—the area farthest to the north— the sun doesn’t set for two and a half months per year. In December and January, however, constant darkness prevails. Despite Finland’s location in the far north, the climate is surprisingly mild due to maritime influences. Inland, temperatures over 30 degrees Celcius are not uncommon in the summer. Near the coasts and in the polar region, however, it is significantly colder, even in the summer. Winters are cold and long throughout the country, with average temperatures often below freezing.

Income and Currency

Finland’s GDP was $49,169 in 2020, putting it just ahead of Austria and Germany and just behind Australia and the Netherlands. According to a Statista survey, the average annual wages in Finland were €46,672, or about $49,000 in 2022.

Finland has been a member of the European Union since 1995 and has been part of the Eurozone from the very beginning. However, prices are generally rounded to the nearest five-cent increment in cash transactions, making the two smallest denomination coins practically obsolete.

Language and localization

In addition to Finnish, Swedish is the second official language in Finland. About 90% of Finns are Finnish speakers, while approximately 5.2% are Swedish speakers. The Swedish language spoken in Finland is called Finland Swedish, and is spoken somewhat differently from the language in Sweden.

According to the Language Act of 1922, in every municipality where there are more than 8% Swedish-speaking residents or at least 3000 inhabitants, signs must be labeled in both languages. Some schools in Finland teach children in Swedish, and there are Swedish newspapers as well. Authorities and public institutions are expected to provide their services in both languages. Besides Finnish and Swedish, Russian is the third most common native language in Finland, accounting for just over 1% of the total population.

Since the 1990s, increasing consideration has been given to other minority languages, particularly the Sami language. In parts of Lapland, Sami languages can be used in dealings with authorities. Overall, there are still about 2,500 speakers of three different Sami languages in Finland today. Throughout the nordic region, there are 25,000 Sami speakers and ten different languages in total.

For e-commerce localization, indigenous languages play only a subordinate role since the majority of Sami speakers also speak Finnish or Swedish. According to a 2012 survey, 70% of Finns also speak English well – a stroke of luck for foreigners, as Finnish has few similarities to other European languages and is comparatively challenging to learn. Nonetheless, it is advisable to translate your website into Finnish if you want to do business here. Customers almost always prefer to do business in their native language, and decreasing the barrier to entry can only benefit your business.

Trends and insights about internet usage

Few countries in the world have an internet network as good as Finland’s. In 2010, the country made headlines by proclaiming fast internet access to be a fundamental legal right. This groundbreaking move obligated companies to provide broadband connections even in the most remote parts of the country. It paid off: as of 2022, 98% of all Finnish households have internet access. In a 2023 survey, 48% of respondents reported using broadband access at home, and 5G is also widely available except in remote areas. In 2022, Finland ranked first across the entire EU in the Digital Economy and Society Index (DESI), which rates EU countries on their level of digitalization. This includes four categories: human capital (digital skills at a population level), connectivity, integration of digital technology and digital public services.

Trends and insights about online shopping

As might be expected under these circumstances, e-commerce is very popular in Finland. Nearly half of all Finnish retail companies sold products and services online in 2020. According to a study by logistics company Postnord, more Finnish consumers began shopping online during the pandemic—the number of people shopping online at least once per month increased from 45% in 2020 to 59% in 2021.

Prior to the pandemic, Finnish consumers were known for their frequent cross-border shopping. However, this has slowed somewhat at this point as consumers became more eager to support domestic businesses, as well as becoming more aware of the ecological footprint of their shopping habits.

However, foreign providers should not be deterred by this trend: 33% of consumers are still buying from foreign online sites. In 2021, the two most popular countries for cross-border shopping were Germany (42%) and China (40%). Finnish online shoppers are particularly likely to buy products in the clothing and footwear category (68%), followed by electronics (40%) and cosmetics (37%).

The market leader, according to the Finnish Post Survey, is the Finnish online retailer Verkkokauppa, which boasted an annual turnover of $541 million in 2020. It is followed by Zalando and two additional domestic retailers: Gigantti and Kärkkäinen. Postnord reports that Finns are not fans of international online marketplaces—38% of Finns had not purchased from any of the marketplaces named in their survey.

Trends and insights on payment and delivery

Even in the realm of online banking, Finns demonstrate their digital affinity. According to Statistics Finland, 87% of 16- to 89-year-olds regularly use online banking services. For online shopping, 60% of shoppers used online banking, followed by card payments (48%), invoice (24%) and PayPal (21%). Mobile payment methods gained popularity, especially during the pandemic: while only about 8% of Finns used them in 2019, this had more than doubled to 18% in 2021. E-commerce providers should, however, keep in mind that many Finns place the utmost importance on security and data protection—one reason that online banking and payment via invoice are still so popular.

Finnish consumers are unique in one aspect of their shopping preferences. Whereas most countries are concerned with quick delivery speeds, Finnish consumers are more concerned with their options for where the package is delivered. They tend to prefer collecting deliveries from a parcel machine, rather than having them delivered to their homes.

Conclusion

Finland is a true pioneer when it comes to digitalization, which, coupled with an affluent population, makes the Finnish market highly attractive for e-commerce. Unlike many other European countries, major international shipping giants like Amazon are still underrepresented in Finland. Amazon and many others do not offer a Finnish version of their website and ship their goods to the far north for substantial shipping fees, if at all. This stands in contrast to the Nordic trend towards buying locally and sustainability. To remain attractive to Finnish customers in the future, businesses should focus on local warehouses and low-carbon transportation methods.

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autor_eurotext_100Author: Eurotext Editorial Team

We explain how internationalization works, provide tips for your translation projects and outline some of the technology and processes used. We also report on current e-commerce developments and cover a range of language-related topics.