When you think of Sweden, you probably picture the incredible natural landscapes, the northern lights, and forests filled with fir trees. And if not that, then you’re most likely thinking of the famous blue and yellow furniture manufacturer who has helped make Scandinavian design a global phenomenon. But Sweden has much more to offer than furniture and forests. It is actually an extremely modern, digital country that is the birthplace of a number of global corporations, including (of course) Ikea, the fashion retailer H&M, the music streaming service Spotify, and the payment services provider Klarna, just to name a few. Klarna, especially, is a familiar name in the world of e-commerce — and Sweden is a country that loves e-commerce. Continue reading to learn more about Swedish consumers and how they shop online, what they expect from online shops, what to look out for when targeting Swedish customers.
Sweden and its inhabitants
Sweden is located in the north of Europe, stretching over the eastern part of the Scandinavian peninsula and the islands Gotland and Öland. It borders Norway and Finland and connects to Denmark at the Öresund Bridge. Two-thirds of the country is indeed covered with forests, fields and wilderness— as one might imagine — but it also has the largest population of all the Scandinavian countries, with over 10 million inhabitants. However, those inhabitants are spread across 529,000 square kilometres, making Sweden one of the countries with the lowest population density in Europe, alongside Iceland, Russia, Norway and Finland.
Sweden’s GDP in 2021 was US$627.44B, and it is a country that is known for its high quality of life. It has ranked high in a number of different quality of life indexes for many years.
Swedish Government and the EU
Sweden is a parliamentary democracy and a constitutional monarchy. Its head of government is the prime minister, while the head of state is the monarch. The government exercises executive power while the single-chamber parliament holds legislative power.
Sweden has been a member of the European Union since 1995, but it has kept the Swedish Krona (SEK) as its currency. It is eligible to join the European Economic and Monetary Union (EMU), but the Swedish Parliament has voted not to change to the euro. This is not expected to change in the near future.
Sweden is a Scandinavian country, also referred to as the Nordics in the e-commerce industry. But although this might make it sound like the region forms a single, unified target group, there is no single “Scandinavian” or “Nordic” language. Online retailers who want to attract customers in the Nordics need to bear in mind that each individual country has its own language: Swedish, Danish, Norwegian, and Finnish.
The official language in Sweden is Swedish, of course, but certain regions of Swedish also use the languages Finish, the Meänkieli dialect, and the Sami language. Most people in Sweden speak excellent English, but they still prefer to do their online shopping in their native language whenever possible. This makes it a good idea to have your website translated into Swedish if you want to attract Swedish customers.
Internet and digitalisation
85% of Sweden’s population lives in the south of the country, primarily in the three major cities: Stockholm, Gothenburg and Malmö. The northern part of the country is sparsely populated and has somewhat worse infrastructure as a result.
Sweden has a digitally-adept population with approximately 93-98% broadband internet access. In 2021, 79% of the population used mobile internet from a laptop, notebook or tablet computer, while 92% of Swedes accessed the internet via mobile phones.
A nearly cashless society
Consumers in Sweden pay for nearly everything digitally, using debit cards or other digital payment methods. 99.7% of Swedes have a bank account, and the use of cash as a currency is plummeting. 41.5% of online transactions are paid for using cards, and bank transfers are another popular means of payment. Digital bank transfer payment apps like Swish are also growing in popularity, as is the buy-now-pay-later payment services provider Klarna, which is based in Sweden but popular throughout Europe. Digital wallets such as Google Pay and PayPal are also much-loved by the Swedes.
The e-commerce market in Sweden
With a turnover of US$16 billion in 2021, Sweden comes in 19th in the list of the largest e-commerce markets worldwide, landing in between Poland and Turkey in the list. The Swedish e-commerce market has been growing consistently for years, but the last two years since the pandemic have resulted in a particularly large jump in e-commerce shopping.
7.6 million Swedes — about 76% of the population — made at least one online purchase in 2021. 34% of Swedish consumers have also made cross-border purchases.
Although Swedes have a high GDP (and therefore a generally comfortable financial situation), they spend somewhat less than average on online purchases, with an average of 1,932 euros per person compared to a European average of 2,364 euros. This, along with the 76% adoption rate, indicates that there is still plenty of room for growth in Sweden’s e-commerce market.
Most popular products for e-commerce
According to a study in 2021, the following product categories were purchased most frequently online:
- Pharmacy/drogerie – 69% of purchases
- Clothing and shoes – 61% of purchases
- Household electronics – 38% of purchases
- Cosmetics and skin care products – 37% of purchases
- Books and media – 32% of purchases
- Food – 32% of purchases
- Nutritional supplements – 31% of purchases
- Furniture / home accessories – 27% of purchases
Where do the Swedes make the most cross-border purchases?
When Swedish consumers make cross-border purchases, they are most likely to purchase from: Germany (US$32.1 million turnover), the Netherlands (US$10.9 million turnover), and Denmark (US$9.6 million turnover). Other popular countries are Norway (US$8.6 million turnover) and China ($US7.02 million turnover).
What Swedish consumers look for when shopping
Sweden is a nation of consumers who look for high quality at a good price. They place great value on the expertise of the online store and after-sale service. 53% of consumers do research on the internet before making an online purchase.
Although the Swedes are open to shopping internationally, they tend to buy from domestic brands. This can be seen in the ranking of Swedish consumers’ top 10 preferred brands, where Apple and Google only just made it onto the list in the last two slots.
Swedish consumers are very health-conscious and make an effort to purchase high quality products, preferably those that are natural and organic. For both food and cosmetic purchases, they vastly prefer these to industrially produced items.
Logistics and shipping
In the southern part of the country (where 88% of the population lives), the logistics infrastructure is well developed and customers are accustomed to short delivery times. The most important logistics centres are located in Malmö, Helsingborg, Gothenburg, Norrkoping and Stockholm. In the north of the country, where things are more rural, there is less logistics infrastructure and deliveries can take several days. However, this is normal for these regions and consumers accept the longer wait.
PostNord is the most popular logistics partner for Swedish e-commerce sellers, handling 81% of deliveries. Other popular logistics companies include BudBee Home Delivery and DHL (30%), DB Schenker (14%) and UPS (13%).
New VAT Regulation
On 1 July, 2021, the European Union introduced a new VAT regulation for e-commerce. It stipulates that (in cases where turnover surpasses 10,000 euros per year), the VAT must be paid in the buyer’s country. The new law is intended to simplify the collection of VAT, which could be quite complex in the past. However, it will also have the added effect of increasing the cost of foreign goods for Swedish consumers. Whereas they previously would have paid the lower VAT in the seller’s country, they will now have to pay the 25% Swedish VAT tax on any items they buy from sellers based in other countries. Swedish e-commerce businesses, on the other hand, will become more competitive as the VAT will be reduced for customers outside of Sweden.
Swedish consumers are a modern, digital target group. The market is currently quite active, but not yet saturated. Most Swedish consumers enjoy shopping online and are also open to ordering from foreign sellers. There is definitely room for growth, particularly for brands that meet the Swede’s high quality expectations. Businesses who plan to target Sweden as a target market should plan to translate their website into Swedish, offer the payment methods that the Swedes prefer, and ensure that the products are geared towards the quality expectations of this demanding market. With those boxes checked, it’s a target market with great potential.