{"id":9792,"date":"2024-09-19T09:00:46","date_gmt":"2024-09-19T07:00:46","guid":{"rendered":"https:\/\/eurotext.de\/en\/?p=9792"},"modified":"2024-09-30T08:47:50","modified_gmt":"2024-09-30T06:47:50","slug":"fashion-e-commerce-in-sweden-scandinavian-sustainability","status":"publish","type":"post","link":"https:\/\/eurotext.de\/en\/blog\/fashion-e-commerce-in-sweden-scandinavian-sustainability\/","title":{"rendered":"Fashion E-Commerce in Sweden – Scandinavian Sustainability"},"content":{"rendered":"

Sweden is one of the most connected countries in the world (94% of the population is online) \u2013 and who would blame them with cold weather prevailing for much of the year. Swedish online shoppers are tech-savvy and well-versed with all the traps the Internet has in store. It is therefore unsurprising that Swedes are at the top of the list for e-commerce usage in Europe and\u00a0\u2013 per capita \u2013 globally.<\/p>\n

What\u2019s more, Sweden is ranked the third-best country in the world to live, and the annual household income in Sweden is well above the global average. A perfect environment for e-commerce at large and online fashion retail in particular. Let’s have a look at the particulars of this interesting Scandinavian nation.<\/p>\n

Discerning clientele<\/h2>\n

Having said that, the Swedes don\u2019t spend their money just anywhere. They are highly environmentally conscious. Climate change is a major concern, and the nation as a whole strives towards a circular economy to conserve resources. Sustainability and a low carbon footprint are more important to Swedish online shoppers than 24-hour deliveries.<\/p>\n

In line with the changing priorities of consumers, Swedish fashion designers are focused more on lasting quality than on fleeting trends. Even if that might mean lower profits on their products short-term.<\/p>\n

Sellpy is a second-hand e-commerce platform addressing the growing demand for sustainable fashion in Sweden. The fashion retail giant H&M has recognized the trend towards more sustainability among Swedish online shoppers, and, as a result, has purchased a majority stake in this popular platform.<\/p>\n

Textile & Fashion 2030<\/h2>\n

Textile & Fashion 2030 is a government-supported, national platform for sustainable fashion and textiles. Their motto is \u201cSustainability by Sweden\u201d. It aims to test and study various scenarios for sustainable fashion settings close to industry, consumers, or both. The purpose of the initiative is to figure out how lessons from small-scale sustainability advancements can be rolled out on the world stage. The initiative works closely with national universities in the fields of fashion, design, textile manufacture, logistics, and more.<\/p>\n

This new awareness in Sweden and among Swedish online shoppers has resulted in other important trends to be aware of: Just 25% of online shoppers purchase from non-Swedish online retailers. This figure is significant as it is down on previous years. In 2012, 40% of online shoppers were still buying abroad.<\/p>\n

This indicates the offering from local e-commerce websites and is now more appealing to consumers than it used to be. One of the reasons for the decline in purchases from foreign online shops<\/a> may well be the very high tax rate. When consumers do make foreign purchases, the UK<\/a>, China<\/a>, Germany<\/a>, and the US<\/a> are the most popular online offerings.<\/p>\n

25% VAT<\/h2>\n

Sweden is a member of the EU. Non-EU companies with an online presence offering or selling goods and services to Sweden must comply with EU regulations.\u00a0 The Digital Single Market Strategy, Electronic Commerce Directive (2000\/31\/EC) (e-Commerce Directive), the European General Data Protection Regulation (GDPR), and a lot more regulations regarding e-commerce in Sweden and in the EU can be found on the EU\u2019s official website.<\/p>\n

Sweden has a high VAT rate of 25%. That number is significant when applied to the sale of goods from foreign countries and can affect the competitiveness of online shops in Sweden.<\/p>\n

VAT exemption?<\/h2>\n

According to Chapter 5 of the Swedish VAT Act, the \u201cusual place of supply\u201d (i.e. the origin of the products) for goods is where the products are located at the time of supply, provided that they are not imported. However, if the products are being transported, different rules apply.<\/p>\n

Therefore, if goods are located in Sweden and do not need to be transported from Sweden for their supply, Sweden is considered the place of supply. Moreover, one of the crucial conditions for a transaction to be exempt from VAT in Sweden is that the supply occurs in Sweden.<\/p>\n

The EU\u2019s VAT reform, effective from July 1, 2021, affects e-commerce businesses involved in cross-border EU transactions or those importing goods from outside the EU. The newly introduced One-Stop-Shop (OSS) system allows these businesses to register for VAT and submit quarterly VAT returns in just one EU member state. Furthermore, for imported goods, the Import One-Stop-Shop (IOSS) has been established.<\/p>\n

The OSS mechanism builds on the earlier Mini One-Stop Shop (MOSS) scheme, which was designed for VAT application on specific digital products within the EU. Both these systems were devised to streamline tax procedures, minimize administrative tasks, and enhance tax revenue collection. Through the OSS, companies can register and declare their VAT in a single country, regardless of whether they serve multiple national markets. The unified OSS threshold across the EU stands at EUR 10,000 or SEK 66,980, eliminating the need to monitor differing distance selling limits for each nation.<\/p>\n

While the OSS caters to EU businesses selling to EU consumers, the IOSS is geared towards non-EU businesses that sell products valued at up to EUR 150 to EU online shoppers. In these instances, standard VAT import rules are applicable.<\/p>\n

Bottom line<\/h2>\n

Swedish online shoppers are discerning, quality-driven, and always on the lookout for a good deal. Sustainability, a low carbon footprint, and good visuals with compelling product texts are the way to go. Registering a company in Sweden would make sense for any online entrepreneur seeking to do business in the country.<\/p>\n

Overall, fashion e-commerce in Sweden is definitely on the rise, and well-worth investigating.<\/p>\n
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Sources<\/h2>\n