There are many signs that the Baltic e-commerce market will be closely observed by Polish e-entrepreneurs. Polish expansion into the Lithuanian, Latvian and Estonian online sales sectors is to be expected in the coming years. While Estonia stands out from among the Baltic states, as its residents are as eager as Europeans to buy online (76% of online shoppers), the other countries are only slightly behind (Lithuania – 66%, Latvia – 65% of online shoppers).
Thus, the e-commerce market in the Baltics seems to be a great opportunity for the development of Polish companies, which are already experienced, have the right solutions, understand online sales, and know how to support them. However, before conquering this part of the e-commerce world, it is worth learning about the behaviours and habits of e-consumers there. What channels are particularly popular among Lithuanians? Do Estonians prefer Facebook or Twitter? What forms of delivery are preferred by Latvians?
The Baltic e-commerce market – what are our neighbours’ purchasing habits?
The Baltic e-commerce market is estimated to be one of the fastest growing markets in Europe. Residents of the Baltic countries are keen to use popular platforms of global giants such as Zalando, eBay, Amazon or AliExpress. However, similarity to Poland, one of the e-leaders there is Allegro with its local counterparts, such as Pigu, 1a or Kaup24.
The Baltic market is clearly growing and regularly recording quite a dynamic growth. The Lithuanian e-commerce market was worth €1.3 billion in 2022 and is forecast to reach €2 billion in 2025. In Estonia, this value amounted to €830 million and is forecast to reach €1.2 billion in 2025, while Latvia reached €800 million in 2022, with a forecast to reach €1.1 billion in 2025, respectively. Thus, year-on-year growth in the value of e-markets in each of these countries will be around 15%.
Looking at the most popular product categories in this region, there is a noticeable common trend inherent in all these countries. It should also be noted that they are distinguished by certain characteristic features. The direction common to all e-shoppers from the Baltics are product groups such as clothing and footwear (about 40% of buyers), electronic products (more than 50%) or household goods (between 24% and 37%, depending on the country). However, Lithuanians also buy dietary supplements relatively often, Latvians buy consumer electronics and household appliances, and Estonians like to purchase toys online, as well as airline tickets or tickets to various sports and cultural events.
Compared to Polish consumers, Baltic customers show similar shopping preferences and differences are only visible if we take a closer look at the specific brands and prices they choose. Customers in the Baltic countries are more willing than Polish e-consumers to spend money on high-end products. We can also observe a trend of greater interest in technological novelties and IT products in the Baltics compared to Poland. When it comes to the obstacles that determine shopping, they are basically the same as those in Poland. The three key elements relate to the waiting time for the delivery, its cost and whether the product will meet our expectations.
It is worth noting that right after Facebook, the most popular ‘social’ is Pinterest, followed by Twitter. YouTube, Instagram, and Tumblr are also popular in the Baltics.
Opportunities and challenges for Polish companies
Although the e-commerce market in the Baltics is developing very dynamically, Poland remains the growth leader in this region of Europe. This can only mean one thing – Polish companies have a lot of knowledge and experience that is crucial for the skilful exploitation of market opportunities. Therefore, investing in Baltic e-commerce should be considered as the right direction. What counts are the aforementioned strengths, which allow the provision of multi-channel services. It is important to recognise the needs of e-commerce in terms of logistics, such as fulfilment and dropshipping. Issues such as pick-up networks are also important. A good example of that is the organised and strategically located network of pick-up points at the disposal of Venipak, a logistics operator Venipak. The e-partner also does not leave online retailers to deal with the technological organisation on their own. It provides ready-to-use logistics modules, easy integration with the parcel system, print manifests or automatic parcel registration and courier call, as well as pick-up points located in convenient locations such as shopping centres.
Up to 40% higher wages in the Baltics – a growth opportunity for Polish companies
The Baltic markets are also characterised by a significantly higher average salary compared to Polish wages, which amounts to PLN 5,146 net as of 2023. Although the trend in Poland is dynamic and the average salary increases quite significantly year to year, it does not stand up to comparison with the average pay in, for example, Lithuania. Our Lithuanian neighbours earn an average of EUR 1,900, or more than PLN 8,500. Estonians also earn significantly more than Poles, at an average of €1,775, or more than PLN 8,000 per month. Only Latvians have average salaries similar to Polish ones, i.e., €1,126, so just over PLN 5,000. This data should be quite relevant to Polish entrepreneurs. Wealthy Baltic residents are more likely to spend their spare money on online shopping.
Sectors worth noting
Significant values maximise online shopping, proving that the e-commerce market reckons with the expectations of online users. It is also worthwhile to discern e-investments and their characteristics in relation to each Baltic country. Estonia stands out in terms of cyber security, which means that the IT services offered to this market must be of very high quality. The focus here is on financial technology, software houses, the energy industry, the maritime industry, and mechanical engineering.
Latvia has exceptionally fast internet connections, which place it in the top 10 countries in the world. The country’s start-ups, engineering, and MICE (Meetings, Incentives, Conferences, Exhibitions) sectors are developing most rapidly. The Lithuanian population, on the other hand, is extremely linguistically proficient, with as many as 90 per cent of Lithuanians speaking at least one foreign language. Easy communication and the developing medical, tourism, biotechnology and IT sectors encourage investments.
Polish companies looking to expand should look favourably on the opportunities offered by the Baltic e-commerce market. While it is characterised by an exceptionally dynamic growth of online sales, it does not seem to have been fully exploited yet. Polish e-entrepreneurs can also benefit from the development of advanced sales channels, such as mobile apps or social media platforms, which are very popular in the Baltics. They should also pay attention to the specifics of the market and the shopping preferences of local customers in order to better tailor their offers. Let the investors’ imagination be stimulated by the fact that the value of the Baltic market, compared to the combined Croatian, Bulgarian and Slovak markets, is similar, but the consolidated nature of the Baltic countries definitely makes them easier to conquer.
Sources:
https://delante.co/e-commerce-lithuania-latvia-estonia/
https://www.gemius.com/all-reader-news/e-commerce-study-2022-online-shopping-in-baltics.html
https://ersj.eu/journal/2918/download/Development+of+E-Commerce+in+Poland+and+the+Baltic+States.pdf
https://journals.umcs.pl/ijsr/article/download/5069/4942
https://ecommerce-europe.eu/wp-content/uploads/2022/06/CMI2022_FullVersion_LIGHT_v2.pdf