Latvia E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Latvia E-commerce Market is Segmented by B2C E-commerce (Beauty and Personal Care, Consumer Electronics, Fashion and Apparel, Food and Beverage, Furniture and Home), and B2B E-commerce.

Market Snapshot

Latvia E-commerce Market Size
Study Period: 2020-2027
Base Year: 2021
CAGR: 11.4 %

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Market Overview

The Latvia E-commerce market is expected to register a CAGR of 11.4% during the period 2022-2027. The Latvia E-commerce market is primarily driven by the growing internet penetration and an increased number of online shoppers in the country.

  • The growing internet penetration paved the way for the E-commerce market in the region. As per the Official Statistics of Latvia, household internet access increased to 91.1% in 2021, compared to 86.2% in 2018 in the region. The growth is further supported by strong smartphone penetration in the region.
  • As per the Central Statistical Bureau of Latvia, at the beginning of 2021 internet was used in almost all enterprises (99.97 %). The Central Statistical Bureau's annual survey on the use of information and communication technologies (ICT) and E-commerce in enterprises shows that 68 % of enterprises had their website. Furthermore, 95.5 % of large enterprises, 87.3 % of medium-sized enterprises, and 63.5 % of small enterprises had their own website. For work internet was used by 52.5 % of all employees of enterprises, which is 8.1 percentage points more than in 2020.
  • Many enterprises in the region use social media platforms for digital advertising purposes. For instance, as per the Central Statistical Bureau of Latvia, in 2021, 57.7 % of enterprises used social media. In comparison to 2019, this indicator has risen by 16.8% points. The opportunities provided by social media were used by 90.1 % of large enterprises. In the group of medium-sized enterprises, it was used by 68.4 %, and in a group of small enterprises, it was used by 54.8 %.
  • However, challenges related to EU applied Value Added Tax (VAT) to sales by non-EU-based companies of electronically supplied services (ESS) can hamper the growth of the market in the region. Furthermore, longer than indicated delivery period by E-commerce companies in the region can also affect the development of the E-commerce market.
  • The COVID-19 pandemic accelerated the expansion of the E-commerce market towards new firms, consumers, and types of products in the region. It has provided consumers with access to a variety of products from the convenience and safety of their homes. E-commerce transactions in Latvia have partly shifted from luxury goods and services to everyday necessities such as groceries, relevant to a large number of individuals.

Scope of the Report

Conducting an e-commerce business means fostering relationships and selling information, services, and goods over computer communication networks. E-commerce usually refers to trading goods and services over the internet, which means broader economic activity. E-commerce consists of B2B and B2C and internal organizational transactions that support these activities.

The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period in Latvia. The study further analyzes the overall impact of COVID-19 on the ecosystem. The scope of the report encompasses market sizing and forecast for segmentation by B2B and B2C, in which the B2C channel is further segmented by application.

By B2C E-commerce
Market Size (GMV) for the Period of 2017-2027
Market Segmentation - by Application
Beauty and Personal Care
Consumer Electronics
Fashion and Apparel
Food and Beverages
Furniture and Home
Others (Toys, DIY, Media, etc.)
By B2B E-commerce
Market Size for the Period of 2017-2027

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Key Market Trends

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.
Latvia E-commerce Market Share

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.
Latvia E-commerce Market Growth

Competitive Landscape

The Latvia E-commerce market appears to be fragmented because of the intense competitive rivalry among the players. Major players in the Latvia E-commerce market are adopting strategies like acquisitions and partnerships to expand their reach in the region. Some of the major players in Latvia's E-commerce market include H&M, SportsDirect.com, Euronics, Amazon.com, Inc, etc.

  • March 2022 - FedEx Express announced its international, day-definite e-commerce service is now available to customers in 24 European countries with connections to 47 markets worldwide. After a successful market launch in 2021, FedEx International Connect Plus (FICP) is now available in an additional 14 countries: the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Norway, Romania, Slovenia, and Switzerland.
  • April 2022 - Tallinn-based Montonio raised USD 12 million in a Series A funding round led by Index Ventures as it presses forward with its one-stop-shop checkout solution for e-commerce merchants and consumers' mission. In conjunction with the new lining of the coffers, the startup has announced the launch of its services in Poland, adding to the Estonian, Latvian, and Lithuanian collections. The new funds will be used, in part, to drive expansion efforts even further afield later this year.

Recent Development

  • July 2021 - PrintOnPack.com, a sustainable packaging startup from Latvia, raised EUR 450,000 from SuperHero Capital. The company will use the money to further grow its team, develop the platform, and increase order volumes and revenue.
  • April 2022 - Sell.xyz, a Latvian dropshipping startup for customized products, has raised EUR 1.5 million in seed capital. The company has launched selling apparel, supplements, and cosmetics. The platform follows the footsteps of other Latvian print-on-demand services. Sell.xyz connects online retailers with suppliers to offer personalized products and fulfillment services.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Defination

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Key Market Trends and Share of E-commerce of Total Retail Sector

    4. 4.4 Impact of COVID-19 on the E-commerce Sales

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Growing Number of E-shoppers is Expected to Boost the E-commerce Market

      2. 5.1.2 Growing Internet Penetration

    2. 5.2 Market Challenges

      1. 5.2.1 Challenges Related to EU Applied Value Added Tax (VAT) to Sales by Non-EU Based Companies of Electronically Supplied Services

    3. 5.3 Analysis of Key Demographic Trends and Patterns Related to E-commerce Industry in Latvia (Coverage to Include Population, Internet Penetration, E-commerce Penetration, Age & Income etc.)

    4. 5.4 Analysis of the Key Modes of Transaction in the E-commerce Industry in Latvia (Coverage to Include Prevalent Modes of Payment Such as Cash, Card, Bank Transfer, Wallets, etc.)

    5. 5.5 Analysis of Cross-Border E-commerce Industry in Latvia (Current Market Value of Cross-border & Key Trends)

    6. 5.6 Current Positioning of Latvia in the E-commerce Industry in Europe

  6. 6. MARKET SEGMENTATION

    1. 6.1 By B2C E-commerce

      1. 6.1.1 Market Size (GMV) for the Period of 2017-2027

      2. 6.1.2 Market Segmentation - by Application

        1. 6.1.2.1 Beauty and Personal Care

        2. 6.1.2.2 Consumer Electronics

        3. 6.1.2.3 Fashion and Apparel

        4. 6.1.2.4 Food and Beverages

        5. 6.1.2.5 Furniture and Home

        6. 6.1.2.6 Others (Toys, DIY, Media, etc.)

    2. 6.2 By B2B E-commerce

      1. 6.2.1 Market Size for the Period of 2017-2027

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 H&M

      2. 7.1.2 Frasers Group (Sports Direct)

      3. 7.1.3 Euronics.lv

      4. 7.1.4 Amazon.com, Inc.

      5. 7.1.5 ASOS.com, Ltd.

      6. 7.1.6 About You SE & Co. KG

      7. 7.1.7 Elkor

      8. 7.1.8 Kurpirkt.lv

      9. 7.1.9 Next Germany GmbH

      10. 7.1.10 Dormeo

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

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Frequently Asked Questions

The Latvia E-commerce Market market is studied from 2020 - 2027.

The Latvia E-commerce Market is growing at a CAGR of 11.4% over the next 5 years.

H&M, SportsDirect.com, Euronics.lv, ASOS.com, Ltd., Amazon.com, Inc. are the major companies operating in Latvia E-commerce Market.

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