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ONLINE RETAIL - Global online retail clicks with the Baltics

  • 2007-10-17
  • By Kimberly Kweder

SHOP ANYWHERE: The allure of browsing through products and making purchases online is that it doesn't involve making trips to stores, crowds or queues.

The Internet has made retail truly global prospect. At the simple click of a mouse, it's possible to go shopping for the Baltics' traditional hand-made linen and amber jewelry, even from thousands of miles away.

Online shopping also saves time and money, not to mention warding off the hassle of waiting in long lines at the check-out counters in stores. With the Internet, text messaging and camera phones, consumers are also making purchasing decisions even before leaving home. In this week's Industry Insider, The Baltic Times

VILNIUS - Until recently, Baltic net surfers faced a huge problem when they wanted to do their shopping online:
 Most of the online retail shops in the world are located in the U.S. They do not accept credit cards from outside that country, or even ship internationally for that matter.

Now things are changing as a handful of forwarding companies in the U.S. are realizing that there is a hole in the market when it comes to Europe, and are moving to fill it.

One of these is U.S.-based company Netikuller.ee, which manages orders and shipments to Estonia.
Since the online company uses bulk shipping, clients receive cheaper international shipping rates for their products.

Netikuller CEO Heikki Haldre told The Baltic Times there's been a 100 percent increase in online shopping every four months since the time the company started four years ago.

"People are getting more comfortable with using the Internet and getting over their fears," Haldre said.

"Buying something from the Internet has its drawbacks because you can't hold electronic items in your hand."
To reassure customer satisfaction, Haldre said all items are insured with full warranty protection.

The Apple iPhone is the most popular item ordered through the Netikuller service, but electronics only count for half of the merchandise because clothing, shoes and personal items are also in demand, said Haldre.

Online shopping is gaining momentum in Estonia. Eesti Post reported a 100 percent increase in shipments from outside the European Union in a twelve month period, according to a Postimees article published in July.

Netikuller has an office in Tallinn and is looking for local partners to expand its services in Lithuania and Latvia.
It would appear to be a wise move, as the online retail market is still growing throughout the Baltic region.

In Lithuania, 32 percent of all items were purchased on the Internet, according to a study released in January by market research companies UAB Gemius and TradeDoubler.

In general, the most popular items bought by Lithuanians included CDs, films, train, bus and plane tickets, cinema and theater tickets, computer hardware and other travel services.

"An interesting fact is that in the meantime there are no outstanding leaders in the Lithuanian e-commerce market," stated Jolita Reidman, head of sales for UAB Gemius Baltic, in a press release.

While some items like electronics show popularity over the Internet, some other items and services don't fare as well.

Aare Ristal, OMD worldwide media communications CEO in Tallinn, said furniture and groceries are two areas where potential buyers like to have more up-close contact before purchasing.

"I think it's only natural that people would rather prefer to test and sit on a sofa, look at sizes of materials, and see samples," said Ristal.

A couple of years ago in Estonia, the Selver supermarket chain tested a virtual shopping Web site where clients could order groceries, but it failed to gather enough interest.

"People weren't willing to do it, the Web site engine was a little clumsy so selecting the goods was not too comfortable," said Ristal. 

Regardless, the Internet is helping consumers make better informed purchasing decisions by providing reviews on products and making price comparisons.

And there are ways to further improve e-commerce services in Central and Eastern European countries, which could open the way for more online transactions to be made.

"In order to do this, security of paying for products and services should be ensured, their quality needs to be improved and e-stores and auction portals have to place more comprehensible information about the products they offer," said Reidman in the Gemius press release.