E-commerce in Latvia

E-commerce

Internet access

Latvia has a population of 1.5 million people, and the internet penetration rate in the country is estimated at 76.3%. The share of monthly active smartphone users was estimated to be at 45.7% in 2017 (Statista). Latvia ranks 19th out of the 28 EU Member States in the Digital Economy and Society Index (DESI) 2018 published by the European Commission. Overall, it made good progress over the last years. Nevertheless, according to the report, half of the population has no or low digital skills. Latvians’ use of internet services (e-banking, social media, news, etc.) continues to be above the EU average, but only 55% of people who used the internet in the last year declared that they had shopped online in 2017 (whereas the EU average is 68%). The most popular web search engines in Latvia are Google (95.5%), Bing (1.6%) and Yandex RU (1.3%).

E-commerce market

E-commerce sales in Latvia generated a total annual revenue of more than US$ 280 million in 2017, and this amount is expected to increase to US$ 418 million by 2021 (Eurostat). The biggest sectors in online retailing are electronics and fashion, which accounted for US$ 99 million and 79 million, respectively. Other common purchases were tickets for events, household goods, travel and holiday accommodations. However, when it comes to the proportion of turnover generated by online business, Latvia is still behind its neighbours. According to data from Eurostat, in 2017 only 9% of Latvia’s business turnover came from online sales (the rate was 13% for Lithuania and 16% for Estonia). According to Statista, there are currently 890,000 e-commerce users in Latvia, with an additional 40,000 expected to be shopping online by 2022. A report from Gemius shows that in Latvia almost 80% of consumers shop online because they can find better prices on the internet, while 69% of users like the fact they can easily compare offers from different stores (in fact, around 55% of Latvians use price comparison sites before they buy something). 40% of Latvian users mention the long delivery time as one of the drawbacks of shopping online. Also, around 35% of consumers feel they cannot find necessary information about the product they want to buy. 1.6 million people in Latvia are active social network users. Among the main platforms are Facebook (580,000 users in 2016), Twitter, Pinterest and YouTube. There are 420,000 Instagram users in Latvia of which 58% are female and almost 85% are aged 18-44. However, the largest social networking website in Latvia is Draugiem, which has approximately 2.6 million registered users.