Market Trends of Latvia E-commerce Industry
This section covers the major market trends shaping the Latvia E-commerce Market according to our research experts:
Growing Number of E-shoppers is Expected to Boost the E-commerce Market
- The rising number of E-shoppers in the region is expected to drive the E-commerce market in the region. As per Eurostat, the percentage of internet users that bought goods or services online in Latvia has grown, which can be attributed to the COVID-19 pandemic. Furthermore, the percentage of GDP comprised by E-commerce sales increased from 0.69% in 2018 to 1.14% in 2021, as reported by IMF.
- Moreover, the frequency of buying or ordering goods or services over the internet in the region is rapidly increasing. For instance, as reported by the Official Statistics of Latvia, the percentage of individuals who made purchases over the internet during the last three months 3-5 times was 30.4% in 2020, which increased to 33.2% in 2021. Furthermore, 14.7% of individuals ordered online 6-10 times in 2021, compared to 10.8% in 2020. Similarly, 17.8% of individuals ordered online more than 10 times in 2021, compared to 9.4% in 2020.
- Furthermore, as reported by the Official Statistics of Latvia, in 2021, individuals aged between 25 to 44, who made purchases more than ten times over the internet during the last three months, were 47.6%. Similarly, 32% of individuals aged between 25 to 44 made purchases 6-10 times over the internet. The frequency of ordering online indicates the rising popularity of E-commerce among the Latvian population aged between 25 to 44. This is further expected to increase the E-commerce market in the region over the forecast period.
- Moreover, the purchasing power of E-commerce consumers is gradually increasing in Latvia over the past few years. Consumers are spending more on online purchases compared to the past years. For instance, as reported by Official Statistics of Latvia, 25.1% of individuals spent EUR 100-299 on goods or services bought or ordered over the internet during the last three months of 2021, compared to 23.6% in 2020. Similarly, the percentage was 9.4% in 2021 and 8.4% in 2020 for the price range EUR 300-499. Furthermore, the percentage increased from 2% to 4.4% for a price of more than EUR 1,000.
- All of the aforementioned factors are expected to drive the E-commerce market in the region over the forecast period.
Understand The Key Trends Shaping This Market
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The Fashion and Apparel Segment Accounted for Largest Market Share
- The fashion and apparel products segment is the most popular product category in the Latvian E-commerce market and is further expected to grow in the near future. This is further driven by the offers provided by many Latvian companies, such as airBaltic and most of the local banks and insurance companies, which have offered incentives for customers to use their services exclusively through the internet.
- As reported by the Official Statistics of Latvia, clothes (including sports clothing), shoes, or accessories ( bags, jewelry, etc.) purchased over the internet by individuals during the last three months in 2021 was 61.1%, which was the largest category of goods purchased by individuals over the internet among all other goods in 2021.
- Online fashion market players such as H&M, Elkor.lv, and others are exploring alternatives to today's standard materials, with key players focused on more sustainable substitutes that include recently rediscovered and re-engineered old favorites as well as high-tech materials that deliver on aesthetics and function.
- Furthermore, with high smartphone penetration and rising social commerce, the fashion segment is growing at a faster rate. Enterprises in the region use social media for digital advertising of their fashion-related products to influence the customers and increase the consumer base. This is further supported by the increasing use of social media such as Facebook and Instagram by the Latvian population.
- The factors mentioned above are further expected to boost the demand for the fashion and apparel segment in Latvia's E-commerce market over the forecast period.
