Denmark is the southernmost of the Scandinavian countries. Its official name is the Kingdom of Denmark. GDP of this country in 2019 reached US$348.08 billion. It was the lowest score among all Scandinavian countries, but it doesn’t mean that its GDP is critically low. Denmark is placed at the 37th (globally) in the case of nominal GDP.
When it comes to ecommerce, Denmark is doing quite well. Last year its ecommerce market was placed ad 29th largest ecommerce in the world.
In this article, we will cover the most important aspects of ecommerce in this country. Let’s begin.
By the end of this year, revenue is expected to reach US$5,216m. There are 4 million users. It is expected to show an annual growth rate at the level of 4.2%, which means in five years, the market volume would hit US$6,418m.
The most significant sector in Danish ecommerce is Fashion, it accounts for 32% of the ecommerce revenue in this country. This is followed by Electronics and Media sector with 28%. Then Toys, Hobby, and DIY with 18%. Beyond the podium are the Furniture and Appliances sector – 14% and the last one – Food and Personal Care that covered 8% of Danish ecommerce revenue.
Which ecommerce won the Danish hearts? The first place belongs to Zalando. Then comes Elgiganten, a Scandinavian electronic retailer. Third place belongs to Bilka – a Danish chain of hypermarkets.
Danish consumer behavior
Danish society can undoubtedly be considered a consumerist. It has a lot of purchasing power that goes with a high-quality lifestyle. Both of these factors contribute to the silhouette of a demanding customer who requires high quality and innovative products from manufacturers. After all, Danes are consumers who are considered to be one of the most demanding on the Old Continent. They have universal access to the latest technologies and can afford them. Average Dane, before buying anything, quite often checks the brand and product before final purchase.
Ecommerce is becoming more and more popular among Danish customers. The pandemic undoubtedly contributed to the great popularity of this market in 2020. When it comes to product preferences – Danes have no problem with purchasing products from abroad, but native items are always highly appreciated. What’s more, products from the international arena are quite often chosen, but only those with an established brand and position.
Denmark is a pioneer when it comes to ecology. It was one of the first countries to develop ecological products. This trend has a significant impact on consumer behavior – they try to limit their consumption for the sake of the planet and their own health.
Danish consumers do cross-border shopping. Their favorite country to make a purchase is Germany – the value of such purchases hit US$20 billion. The second favorite is Sweden – US$11.7 billion is the value of the Danish purchases. The last three – Netherlands with US$7.6, China with US$7.01 and Norway US$5.42.
Payments in Denmark
Danes are the biggest fans of cards in the entire European Union. This method covers over 63% of transactions for a total of nearly EUR 10 billion. This is undoubtedly the most preferred method: per one inhabitant of Denmark will be assigned 1.26 debit cards, which is a very high result compared to credit cards (0.31). Dankort – a Danish credit card provider that offers the possibility of international payments – probably had a significant impact on debit cards’ popularity. The continued high use of cards also means online payments will continue to grow.
Digital wallets account for about 20% of transactions. However, it was assumed that the annual growth rate of this method is 19.5% by 2021. The most popular payment application is local – MobilePay, which has been present in the Danish market since 2013. Currently, more than 60% of Danes use it. PayPal has also found a place in this market – payments with this method account for about 12% of transactions via digital wallets. So far, cash importance is declining. It is expected that by 2021 it will constitute only 7.6% of the whole transactions.
Social media in Denmark
Over 95% of Danish internet users visited social media at least once during one month. They spend around one and a half hour surfing on social media.
The top three social media in Denmark are Facebook, YouTube, and Messenger, to be in touch. So if you want to reach some Danish customers – be present on at least one. It is really profitable to use Facebook Ads – you can get to 3.70 million users. It is quite a big score. Thanks to advertising on Instagram, you can reach a little less – 2.10 million users.
Social media, and especially influencers, have an impact on consumers’ behavior. It was researched that over 60% of them are influenced by a recommendation seen on social media and 44% by an influencer.
Logistics in Denmark is very technologically advanced. Due to the great concern for the environment, LNG ships and e-Vans are used more and more often. Many retailers, such as Amazon, are expanding their logistics centers. Those who cannot afford it outsource 3PL services and more and more often 4 PL.
The most popular delivery service providers are GLS, UPS, and DHL. The leader (GLS) covers almost 40% of deliveries. UPS provides 15% of them and DHL, 12%.
To sum up
When it comes to the Denmark ecommerce market, there are a few takeaways from this article to remember. First, consumers demand a high quality of products and services. Another aspect – Danes support ecology. And the last one – cards are crucial ways of payments when it comes to Danish preferences. Once you cover at least these three matters, you can think about running ecommerce here.
We have hope that you will find these several tips helpful enough to conquer the Danish ecommerce market!