Denmark’s economy was among the most robust in the EU in managing the pandemic. The real GDP declined by only 2.1% in 2020, compared to an EU average of 6.3%, and grew by 4.7% in 2021. The size of the economy surpassed pre-pandemic levels in the second quarter of 2021, earlier than most of its regional peers. The resilience of the economy bodes well for the retail and consumer sector, but the war in Ukraine has heightened risks going forward.
The Ukraine crisis has negatively impacted the consumer sector in 2022, as higher inflation erodes purchasing power and hinders consumer spending growth. however, it has remained more insulated from the impact of the war than many other European countries due to its limited dependency on Russian gas. However, inflation has in some way eroded the purchasing power.
With consumer price inflation reached a four-decade high in 2022, driven primarily by rising food and fuel prices. This led to a fall in consumer confidence to a 14-year low in October 2022, however the figure is slowly rising back.
In response to the crisis, the government has increased energy subsidies for lower-income households and is considering a one-time payment later in the year to ease the cost-of-living crisis. However, all this will affect the retail market and it is expected that real growth in volume terms will slow to about 1% in 2022. During the pandemic, food retail sales were more resilient than non-food retail sales as many purchases of non-essential goods were delayed. However, much of the pent-up demand for non-food sales was released in 2021, and consumers are likely to prioritize spending on travel and leisure services that were often unavailable in the past two years.
E-commerce has seen a significant growth in Denmark, making it one of the leading markets for online shopping in Europe. In 2021, the country registered the highest per capita spending for online shopping in Europe, with an expenditure of USD 3,000, followed by Norway with USD 2,400, and Britain with USD 2,300. The Danish e-commerce market has improved online shopping by offering commerce via smartphones, expanding pick-up options, and using big data analytical tools to address recognized issues.
According to data from PostNord, The leading payment method for online shopping in Denmark in 2021 was debit or credit card, used by 52 percent of e-commerce users, followed by mobile payments such as MobilePay with 22 percent, PayPal with 13 percent, and online banking with 4 percent.
The e-commerce sales of local online retailers in Denmark reached over DKK 130 billion (USD 20 billion) in 2021, while sales from foreign retailers amounted to around DKK 50 billion (USD 7.5 billion). The German online fashion retailer Zalando was the leading e-tailing company in 2021 with a 6 percent market share, despite the limited market presence of cross-border retailers.
In Denmark, the most popular products purchased online in 2021 were clothing and sports equipment, with almost 70 percent of online shoppers making these purchases. However, the value of online fashion sales varies seasonally, with higher spending in the months leading up to major national holidays. The launch of Amazon in the Nordic countries, starting with Sweden in 2020, will likely increase B2C e-commerce in the coming years and provide easier access for US sales channels to Danish consumers. There are multiple guides available to help independent sellers enter the online market and there are B2B and B2C service providers that offer paid services to assist companies in setting up and expanding their e-commerce businesses.
In Denmark, There are about 44.7% of people use credit cards, and 97.4% of people use debit cards. While there are 78% of people purchase on the internet, there is only 83% of people with online banking accounts.
For E-Commerce Customers in DenmarkWhat are the major driving factors to purchasing online?
There is 4.12 million consumer goods e-commerce users in Denmark, and they spend total of around 9.16 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around 2221 USD. Also, in those e-commerce users, about 37.4% of them purchase through their mobile phone.