For eCommerce companies trying to increase their international attain in the present day, Denmark is among the many most promising candidates to contemplate. Though its measurement and inhabitants are modest, its sturdy financial system and complex banking, digital, and technological infrastructure give it a strong place within the high 35 international GDP rankings, with a Gross Home Product of $355 billion (US) in 2020 and a nominal per capita GDP of $60,494 (US).
Denmark eCommerce: rising potential and challenges
Denmark’s dense inhabitants has a dedicated base of city buyers, deep web penetration, and optimum postal and supply operations, which make it a pure for eCommerce. In 2020, the Denmark’s eCommerce market grew greater than 30 %, with over $6 billion in gross sales, rating it within the high 30 on this planet. At this price, it appears Denmark is destined to see double-digit development over the subsequent few years.
Naturally, with super development and alternative there are additionally challenges: Danish buyers are accustomed to high-quality and confirmed merchandise, have excessive expectations for supply, and are used to purchasing from native and international gamers like Zalando, Elgiganten, and Apple (making up 15% of all on-line gross sales) which might make it intimidating for on-line corporations hoping to interrupt in.
To achieve success within the Danish eCommerce enviornment, it’s vital to be well-versed and able to accommodate all facets of the nation’s enterprise local weather, together with:
- Denmark’s distinctive shopping for and fee preferences
- Native banking and logistical necessities
- Denmark’s tendency to default to native favorites like Saxo and Nemlig, as effectively H&M, Amazon and different international retailers.
COVID’s affect on Danish eCommerce
Though the COVID-19 pandemic had a unfavorable affect on the Danish financial system, leading to a 2% lower, their resolution to lock down swiftly finally had a constructive impact on their eCommerce success. In mid-2020, 26% of customers reported problem acquiring items, which led to important features in on-line gross sales of grocery, meals and drinks, with different classes quickly to comply with, with an total 10% enhance in on-line gross sales.
Client research have reported that nearly 20% of Danish buyers have switched from brick-and-mortar retail to on-line purchasing because the pandemic started, with a whopping three out of 4 Danish residents purchasing on-line and eCommerce making up nearly 20% of all retail gross sales, and anticipated to solely develop extra into 2022.
Cell is the key to eCommerce uplift in Denmark
Denmark is among the main nations in Europe for smartphone and cell eCommerce penetration, at 86.4% and 45%, respectively. Naturally, this implies they’re comfy with—and like—making their on-line purchases with their telephones over different units.
Contributing to that is the rising recognition of retail apps like SHEIN, Zalando, and Coop and the native and handy fee app MobilePay (Danskbank). With these facets in thoughts, any cross-border enterprise trying to increase into Denmark ought to make optimizing their techniques for cell units a high precedence.
The confluence of Danish high-tech sector development and B2B eCommerce
Denmark, significantly Copenhagen, has turn into a brand new middle for startup capital and innovation, with corporations like Zendesk and Tradeshift standing out. The nation just lately was ranked quantity six within the International Entrepreneurship and Improvement Institute’s International Entrepreneurship Index.
This could solely imply good issues for cross-border retailers trying to capitalize, particularly within the B2B enviornment – as 24% of Danish B2B enterprises are already doing eCommerce, Denmark is second solely to Iceland in Europe when it comes to massive corporations promoting on-line.
Software program market development presents potential to sellers in Denmark
Software program in Denmark noticed a year-over-year enhance of virtually 6% between 2016 and 2020, with $3.4 billion in gross sales final yr, and it’s anticipated that it’s going to proceed to develop and hit round $5.5 billion by 2025. For SaaS, that is extraordinarily excellent news and but one more reason to pursue cross-border alternatives in Denmark.
Danish buyers have various purchasing preferences and favor subscriptions
Most on-line purchasing in Denmark is concentrated in style, media, furnishings and home equipment, and meals and private care. About 30% of their on-line spending is for style, 29% for electronics and media, and nearly 20% for toys, hobbies, and DIY, for instance.
Danish customers like to browse on their cell units and through social media channels. There’s additionally a rising urge for food for subscriptions, which at present make up 21% of Denmark’s eCommerce income, with video and music streaming, transport, and health companies main their preferences.
About 55% desire month-to-month renewals (though annual renewals are additionally a robust possibility that ought to be provided), and the common annual renewal price is round 78%, in line with buyer knowledge from 2Checkout (now Verifone).
Promoting On-line in Denmark
On-line fee strategies in Denmark reveal the nation’s preferences, and money shouldn’t be certainly one of them—retailers trying to get the eye of Danish buyers ought to plan to supply quite a few fee strategies. Over 60% of on-line transactions are at present credit score or debit funds, with 23% for digital wallets, the place MobilePay leads. Nonetheless, over 60% of funds are made through Dankort.
Dankort, clearly the dominant fee selection in Denmark, is complemented by Danske Financial institution, Nordea, and Handelsbanken, that are additionally Danish favorites, in addition to PayPal and different, extra novel biometric strategies.
Supply issues to Danish buyers
Denmark prides itself on its postal and supply experience and effectivity, and their expectations for their very own on-line purchases are comparable. They could not count on same-day supply, however next-day is most well-liked. Greater than that, and home sellers or corporations like Amazon, with native distribution facilities, could win out.
Don’t neglect privateness, cybersecurity oversight, and VAT
It will be important for cross-border retailers to understand that Denmark is a member of the European Union, and subsequently topic to Basic Information Privateness Regulation (GDPR), which was formally carried out in Could 2018. Denmark’s Danish Enterprise Authority and Centre of Cybersecurity oversees cybersecurity, cookies, and telecommunications. These businesses additionally publish their very own steerage on knowledge safety for organizations.
When it comes to taxation, retailers promoting in Denmark are not required to gather VAT except they attain or exceed yearly EU vast gross sales of €10,000 (~$11,000 US). After they attain that degree, nevertheless, retailers should both register with the Danish tax authority or, in the event that they promote to clients exterior Denmark, they might register within the One-Cease Store (OSS) system, a voluntary platform that establishes a single account for dealing with taxation throughout all EU member states (the registration could also be completed within the service provider’s residence nation).
To study extra about making the transfer to promoting in Denmark, learn our eBook “eCommerce in Denmark” and uncover the conditions wanted to attain success on this Nordic nation.