Market Trends of Denmark E-commerce Industry
This section covers the major market trends shaping the Denmark E-commerce Market according to our research experts:
Rising Adoption of Card Payments is Expected to Boost the E-commerce Market
- The Danish cards and payments market is well developed and continuously growing, with Danes being prolific users of card payments. Consequently, the share of cash payments within total payment volume has consistently declined. Growing acceptance of payment cards by retailers, e-commerce, and the advent of contactless technology has resulted in accelerated use of electronic payments.
- Online payments in Denmark are card-based and the most preferred online shopping option. Overseas merchants offer comprehensive card payment functionalities to reach as many consumers as possible and gain market share in the region.
- Cards dominate the Danish payment mix. Dankort debit cards co-branded with Visa are the most popular. As per HootSuite, credit card penetration in the region with 44.7%, while debit card penetration is 97.4%, mainly due to Dankort, the domestic bank-based card scheme that is free of charge for users. The card is commonly co-branded with Visa, offering international payment capabilities. The Dankort, the national debit card, is just as popular as cash for retail transactions in Denmark.
- With a 100% banked population and growing adoption of contactless payments, card payments are anticipated to further displace cash transactions over the coming years. Moreover, as per EUROSTAT, the region has a high percentage of users who bought online goods and services, which increased from 82% in 2017 to 91% in 2021. With the increasing convenience of the card payments system, the e-shoppers and e-commerce market is expected to grow further over the forecast period.
- As per Danmarks Nationalbank, the total value of transactions with Danish payments cards in Q1 2021 was 145,929 DKK million. Co-branded Dankort debit card generated the highest value of 100,940 DKK million, followed by the International debit card with 34,515 DKK million. Furthermore, this total value increased to 193,921 DKK million in Q4 2021. The rising adoption of card payments is expected to drive the e-commerce market over the forecast period.
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Fashion and Apparel Segment Accounted for the Largest Market Share and is Further Expected to Grow at a Significant CAGR
- The fashion segment is Denmark's most popular e-commerce purchase, with "Clothing, footwear, and jewelry" being the number one category. This applies to both sales revenues and the volume of purchases. This is evident because of the popularity of online fashion retailers in the region, where the most popular websites are fashion retailer companies.
- The German clothing giant Zalando is a famous market participant in Denmark. The company launched its second-hand service Zircle on the Danish market in 2021, which further boosted the sales of clothing and footwear in the region, growing the demand for the fashion and apparel segment in Denmark.
- With the increasing demand for fashion and apparel products, new players are emerging in the region to gain market share. One such player is the online platform The Founded. The Founded was created by the Danish fashion company Bestseller Group. The Founded offers sales of several fashion brands, including clothing from Jack & Jones, Only, and Vero Moda. The Founded replaces the company's former online store Bestseller.com.
- Streaming services and social media platforms like Facebook, Instagram, Spotify, and YouTube are becoming increasingly popular for fashion-related advertisements, mainly aimed toward younger consumers. Since the country has high internet penetration, the advertisement conversion into sales is significantly higher, increasing the sales of fashion-related products in the country.
- As per Statistics Denmark, sales turnover of clothing in Denmark was 2,403 DKK million in the first quarter of 2021, which increased to 5,203 DKK million in the third quarter of 2021. The rise in sales turnover of clothes is further expected to boost the demand for the fashion segment in the region over the forecast period.
