Surprise at the race of e‑commerce: Latvian companies are the frontrunners
2021-10-28
Vytis Žegužauskas, Luminor Bank's corporate customer department manager
Residents of the Baltics are increasing their presence in online shopping surge, but Lithuanian and Estonian entrepreneurs are still reluctant to reap advantages of e‑commerce, the survey conducted by Luminor indicates. More than half of the entrepreneurs surveyed in Lithuania and Estonia admit that their sales through e-channels did not earn a single euro in 2021, while Latvian companies have already tamed online sales – a fifth of them generate more than 45% of turnover online this year.
The number of people shopping online in the Baltic States is growing every year. According to the data of Lithuanian, Latvian and Estonian statistical institutions, more than a half of the population aged 16-74 made a purchase online at least once a month during 12 months period.
Meanwhile, a survey of small and medium-sized enterprises conducted by Luminor Bank shows that only about 13 % of Lithuanian and 10 percent of Estonian companies generated at least a 45 % of the company's turnover through e‑commerce channels. Latvian SME’s are doing better about a fifth of them generated more than 45% of turnover from online trade.
“Small and medium-sized businesses make up the largest part of the Baltic economies, so with the easily detected growth of a volume of e‑commerce one is given a bit biased impression that the majority of companies are digitalized their sales. It turns out that this is not true - a survey conducted in 2020 and recently this year shows that the majority of companies do not exploit all the possibilities of e‑commerce yet,” said Vytis Žegužauskas, Head of Corporate Banking at Luminor Bank.
54 % of Lituania’s, 67 percent Estonian and 35 percent Latvian SME’s surveyed did not generate any revenue online.
"Latvian entrepreneurs, who invest and earn more from online shopping and are more inclined to e‑commerce, have pushed themselves forward in the e‑commerce race in the Baltics. This should be a serious signal to Lithuanian and Estonian companies, as competition in the field of online trade is constantly increasing and the further sector develops, the harder to catch up will be” V. Žegužauskas said.
According to the study, about the fifth of SME’s surveyed are planning to enter or expand their presence in online business in coming years. About 20 percent Lithuanian, 18 percent Estonian and 27 percent Latvian entrepreneurs’ claim that they are planning to increase their online sales in 2022. A similar trend was seen last year, when the expansion of e‑commerce have been scheduled by 20 percent Lithuanian, 27 percent Estonian and 22 percent of Latvian respondents.
In addition, some companies agree that one of the factors that will determine their success in 2022 is investment in innovation and technological progress. This was indicated by 11% of respondents in Lithuania, 10 percent In Estonia and 12 percent in Latvia.
Luminor Bank survey was conducted in September 2021 in collaboration with market research firm Norstat. The survey participants - 750 Baltic SMEs managers and department heads.
