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European Ecommerce Overview: Estonia

Estonia is a Northern European country with access to the Baltic Sea. It borders Russia, Latvia, and Finland through Finnish Bay. It is one of the most computerized countries in the world.

Estonia is a member of NATO and the European Union. Its GDP in 2019 was US$39.1 billion. In this article, you will find out some clues about Estonian ecommerce. Let’s start with a quick overview. 

Estonian ecommerce overview

Revenue in the Estonian ecommerce market is forecasted to reach US$372m by the end of this year. The annual growth rate is at the level of 4.8%, and thanks to this, in five years, the market volume is projected to reach US$470m. This year user penetration may reach 53.2%, and by the end of 2025, it is forecasted to amount to 63.4%. 

The average consumer’s revenue is expected to hit US$527.00.

When it comes to the largest segments in Estonian ecommerce, there are three of them. The first place belongs to travel and accommodation services (61% of e-shoppers), then comes entrainment, i.e., event tickets (57% of Estonian shoppers) and the last one is the clothing and sports equipment sector (49%). 

source: https://merchants.glopal.com/en-us/sell-online/estonia

What are Estonians’ favorite ecommerce stores? The first place belongs to Kaup24. It is an Estonian marketplace in which you can find a variety of products. Then comes On24, also a marketplace. The last place on the podium belongs to Hansapost, another Estonian marketplace. The last two are also stores where you can buy products from a variety of groups. Both are based in the Estonian domain. 

source: https://merchants.glopal.com/en-us/sell-online/estonia

What is worth to mention – Estonia is all about the Internet and startups. This country is the most connected in the world. That is why a large part of the economy is based on the Internet. There is nothing that cannot be dealt with online actions in this country. From government litigation to buying bus tickets. 

A free Wi-Fi network has been operating in Estonia since 2002, which guarantees access to the Internet connection in most urbanized areas. When implementing this solution, many private companies found employment, which significantly strengthened the economy.

 Interestingly, Estonia has the most per capita startups than anywhere else in the world. Surely you’ve heard about Taxify or used Skype – these are just two examples of companies that were born in this market. Believe us, there are more. 

Consumer behaviour in Estonia

Estonia is an example of a country that has come a long way in terms of the economy. We can say the same in terms of consumer behavior. They are price sensitive society, but this sensitivity decreases over the years, and with more income, they spend more. Like most European markets, Estonian is also aging. Despite this, there is a clear interest in ecommerce and social media. The Internet is also a decisive factor. The domestic market is quite large, but foreign brands are a very frequent choice. This trend does not apply to food. When it comes to this category, local products are the first choice of Estonians. 

In the case of cross-border shopping, Estonians heavily rely on Russia. Purchase value from this country stands at the level of US$2.91 billion. Then comes Germany with US$2 billion. The third-place – Finland with a little lower score, US$ 1.92 billion. China comes with US$1.51 billion and last but not least, Sweden with US$ 1.16 billion.

source: https://learning.eshopworld.com/ecommerce-blog/estonia-ecommerce-insights/

Estonian payments method

Almost half of Estonians consumers choose payments via mobile. Both Apple Pay and Google Pay are available in this country. Nearly ⅓ of Estonian consumers choose credit cards. Also, bank transfers have fans in this country – 10% of transactions are done this way. E-wallets cover 8% of Estonian payments. 

source: https://www.paymentwall.com/pl/payment-methods/estonia

Similar to Latvia, there is a MINT solution available on the market – a prepaid option that allows Estonians easy and secure payments. It operates globally. Nevertheless, due to the low popularity of the prepaid solution, MINT is not a common choice.

Another famous worldwide option is Mobiano. It allows payment in a secure and fast way straight from the customer’s mobile. It offers its services in 65 countries, so cross-country transactions shouldn’t be a problem any longer.

Social media in Estonia

Internet penetration in Estonia reaches 90%. There are 760 thousand social media users, which means 57% of Estonians are present there. It is a 6% increase comparing to 2019. 

source: https://datareportal.com/reports/digital-2020-estonia

What is essential, 95% of social media users use it from mobile. The widest reach in terms of advertising has Facebook. Thanks to this platform, you can get to even 650 thousand social media users. The second place belongs to Instagram, with 370 thousand users of advertisement reach. The lowest score here has Twitter. You can reach 131.5 thousand users thanks to ads on this platform.

source: https://datareportal.com/reports/digital-2020-estonia

Logistic in Estonia

Estonia is strategically located. It connects the Scandinavian countries with the Baltic countries. This makes transport in this part of the European Union much easier. Estonia is one of the most open economies, and due to its small size, logistics is not a big challenge here. The level of automation, which is very high in Estonia, also helps a lot. Projects such as Rail Baltic or Tallinn Airport will strengthen this country’s position on the European logistics market. 

Thanks to the continuous development of road and IT infrastructure, Estonia has become a very important point on Europe’s logistics map. It not only connects its northern part with the rest of the continent but allows a faster flow of goods from all over Europe to Russia, which is an essential player in the global and European economic market.

To wrap up

Despite its small size, Estonia is a very receptive market where ecommerce is continuously developing. Consumers show some similarities to those from other eastern European countries, such as Lithuania or Latvia. Still, there are also purely Estonian aspects that are worth paying attention to, such as the fact that the most popular online shopping destinations are Estonian marketplaces.

If you are also interested in other markets in this part of Europe, we recommend reading texts about Lithuania and Latvia.