THOUGHTS

Why Sweden’s Retail Sector is Captivating International Retailers

Sep 30, 2019

Sweden is considered as an ideal market by several international retailers, primarily due to factors including highly skilled labor force, sophisticated consumers, innovation and technological advancements, smooth business procedures, and stable economy of the country. Sweden has been consistently ranked as one of the most competitive, globalized, and productive countries in the world despite having a relatively smaller population.

Furthermore, the country’s dominance in the Nordic marketplace raises the attractiveness of retail sector investments in Sweden. The country also has the highest retail sector attractiveness when it comes to establishing new business ventures, and international retailers continue to selectively expand in the Nordic region at a slightly faster rate when compared to Europe’s key cities at an aggregated level. Moreover, Sweden’s central location and strategic gateway to Northern Europe have also made it a convenient logistics hub and place for consolidated business operations.

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Why is Sweden an ideal market for international retailers?

Strong retail sector growth

Fueled by steady population growth and rising disposable income, the Swedish retail sector has enjoyed consecutive growth over the past two decades. Growth in both private consumption and retail sales is stronger in Sweden than most of the European countries and is forecast to outperform most of these countries in the next few years. Swedish consumers have increased retail spending for more than a decade and retail sector sales account for nearly 40 percent of the total household expenditure.

Rising population

Sweden’s population is growing steadily, especially in the urban areas. Net immigration, increasing birth rates, and low mortality are key factors that are contributing to this growth. This trend of rising population is expected to continue in Sweden, creating a broader set of audience for the retail sector companies here to target and serve.

Growth of e-tail

Online sales account for a sizeable portion of the total retail sector sales. Items including consumer electronics, clothes, and books top the list of most sold of items through etail. The consumers in Sweden also indulge in shopping from international sites, especially in the case of fashion items and accessories.

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Shopping tourism

The fashionable lifestyle and five-star culinary adventures are garnering the attention of travelers from around the globe to Sweden. Also, tourism is the fastest-growing industry in Sweden. This has had a significant impact on the retail sector and shopping culture in the region. Revenues from international visitors have doubled in the last five years and visitor volumes have increased faster than the European average. This trend can be observed in Stockholm, where luxury brands compete for the affluent traveler’s attention.

Growth of e-tail

Online sales account for a sizeable portion of the total retail sector sales. Items including consumer electronics, clothes, and books tops the list of most sold of items through e-tail. The consumers in Sweden also indulge in shopping from international sites, especially in the case of fashion items and accessories.

Opportunities for different retail segments

Sweden is well suited to new retail concepts and there are several opportunities available in most segments in the retail sector. The retail market here is unregulated, proving to be highly favorable to international retailers. However, as the global retail industry has expanded rapidly into new markets, the Swedish and Nordic markets have been relatively untapped by international retailers. Traditionally, domestic, and Scandinavian brands have dominated the country, but in recent years new brands have entered the market with further expansion plans. There have been a number of new openings during the last five years. There is also an increasing interest from premium brands among retail sector consumers in the region.

Additionally, several international food and beverage players are also increasingly entering the market.Sweden is well suited to new retail concepts and there are several opportunities available in most segments in the retail sector. The retail market here is unregulated, proving to be highly favorable to international retailers. However, as the global retail industry has expanded rapidly into new markets, the Swedish and Nordic markets have been relatively untapped by international retailers. Traditionally, domestic, and Scandinavian brands have dominated the country, but in recent years new brands have entered the market with further expansion plans. There have been a number of new openings during the last five years. There is also an increasing interest from premium brands among retail sector consumers in the region. Additionally, several international food and beverage players are also increasingly entering the market.

Favorable logistics hub

Sweden ranks top as one of the most trade-friendly and logistics efficient nations in the world by smoothly moving goods and connecting manufacturers and consumers with intentional markets. Sweden is the preferred choice when companies consolidate distribution and warehousing activities in Northern Europe to one central location. From Sweden, major cities in Sweden, Denmark and Norway are accessible by road transport in less than 12 hours, while Finland, Latvia, Lithuania, and western Russia are accessible within 24 hours. Several Swedish locations are used by foreign retail sector companies for centralized distribution in Northern Europe.

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