The number of orders in online stores increased record-breakingly rapidly in April and June of 2020, informs the latest e-commerce index. The index, provided by Vilkas Group, is the most accurate available insight into Finnish ecommerce, and it is based on real sales events of over 2000 webshops.
“An enormous number of new customers found online stores due to Covid-19. The digital future is, indeed, here and its economic significance is great. The number is greater in orders than in euros, but an increase of 25 % in euros in April and June means that e-commerce is going to increase by a billion euros even without another wave of corona”, observes Vilkas Group’s CEO Markku Korkiakoski.
Aki Kangasharju, the CEO of ETLA Economic Research, thinks that the growth story of ecommerce this spring is very understandable.
“Corona brought a noticeable number of new customers to online stores. At first, these customers bought goods with smaller amounts and then, the average sum of purchases has started to grow and at the same time, many of these newcomers have stayed as recurring customers in online stores”, Kangasharju explains.
Kangasharju estimates that e-commerce has found a new level. The likely new, second wave of corona would add to e-commerce, but not in a similar, enormous way as the pandemic did during this spring.
E-commerce has found a new level
“When the second wave most likely hits, it will be more like putting out forest fires than a total lockdown. The increasing e-commerce trend continues, but the leap will not be as enormous.”
Cost-effectiveness may bring on exploding growth
“Cost-effectiveness enables a change in the structure of retail trade that will be an even greater shift to online stores than what has happened due to the pandemic”, Kangasharju envisions.
“The current percentual growth of e-commerce is great. In the big picture of retail trade, it is still small, but there is great potential for growth. When online stores are able to demonstrate that lower costs mean lower prices, the growth will be immense”, Kangasharju predicts based on the price-consciousness of customers.
Amazon is coming, what will Finland do? The media is also in danger
Markku Korkiakoski, the CEO of Vilkas, adds the potential arrival of Amazon, the global e-commerce giant, into the e-commerce equation. Amazon could potentially reach Finland during the coming autumn, according to Korkiakoski.
“If we, both the retail trade and the state, do not prepare ourselves for the arrival of Amazon with determined measures, things could end badly. Amazon’s cost-effective, oiled machinery is huge, but the profits go to the pocket of the world’s richest man, Jeff Benzos, and Finland will be left with the scraps. If the Finnish marketing budget, which is insufficient to begin with, begins to sink into Amazon, the Finnish quality media will suffer in addition to the Finnish trade business and production.”
Korkiakoski is happy that the Pelastetaan kauppa campaign (Let’s save the trade) literally saved hundreds of Finnish businesses with webshops. However, a lot remains to be done.
”There is a danger that the laudable work of hundreds of these new merchants will have been partly futile. Finnish consumers have to find the products as well, which entails massive investments into marketing. Without strong marketing, it is very difficult to compete against Amazon. Here we need new kinds of thinking and work without prejudice across society”, Korkiakoski confirms.