Items that could no longer be purchased freely due to the restrictions on gathering, could be ordered, and the remote shopping opportunities were tried by many citizens and businesses precisely because of the pandemic. Many experts point out that this trend is here to stay, and most likely, after all the restrictions have been lifted, we will be shopping on the Internet more frequently than before the outbreak of Covid-19.
However, problems have also been highlighted. One is linked to an increasing volumes of Internet fraud. The other concerns small retail markets such as Latvia: local residents are increasingly shopping in Internet shops registered in other countries, and this has a negative impact on local businesses and their jobs, as well as taxes.
Data compiled by Eurostat shows that the number of internet purchases made by Europeans has steadily increased throughout the previous years, but last year the mark of 70% has been passed. Last year 72% of the European Union (EU) citizens have made at least one purchase on the Internet. The Internet has been used most for purchases in the Netherlands, Denmark, Germany, Sweden and Ireland. More than 80% of Internet users have purchased something on the Internet in these countries.
The most frequent online shopper from the Baltic States was Estonia, where 76% of Internet users have purchased something at least once last year. In Latvia the figure was 63%, while Lithuania accounts for 64% of Internet users.
On the other hand, less than half of Internet users purchased remotely in Bulgaria, Romania and Italy.
The average purchase rate on the Internet has also increased. Overall, on average, the most Europeans make three to five purchases on the Internet over a period of three months. Last year, this was 19% of Internet users.
Last year, 19% of the population using the Internet purchased something once or twice over three months in Latvia, 12% up to five times, 4% six to ten times, 4%. If the proportion of people who made one or two purchases on the Internet has not changed specifically in the course of three months, the share of the most frequent purchases has increased.
Not surprisingly, the most ordered items on the Internet were those which could not be bought onsite due to restrictions. 64% of EU citizens have ordered clothing and footwear, 29% have ordered food deliveries, 28% furniture, domestic goods or gardening products, 27% ordered cosmetics products, another 27% ordered books or other printed reading materials, and 26% ordered computers, phones and their equipment.
The most frequently ordered goods in Latvia were clothing and footwear – in the last three months, 45% of Latvian residents have purchased them. However, unlike the EU as a whole, Latvian residents have used the Internet more actively to purchase tickets for cultural events when they were available, as well as online versions thereof.
Last year, 32% of Latvian Internet users purchased tickets for cultural events. Moreover, if clothing and footwear were mainly ordered by young people under the age of 25, tickets for cultural events were purchased fairly uniformly in all age groups. In the EU as a whole, tickets to cultural events were purchased by 25% of the population last year.
At the same time, as sales volumes on the Internet grow, the share of dishonest operators has also grown. Last year, the Consumer Rights Protection Centre (PTAC) has received more than 800 complaints about transactions that have taken place remotely.
Most frequently, complaints are related to the fact that the ordered item has not been delivered, but also that the money has not been returned, and the seller is no longer involved in communication with the buyer.
Experts recommend that buyers be especially careful when the product offered on the Internet is uncommonly cheap. Similarly, the recommendation is not to rely solely on advertising banners, especially if they are available only on social network platforms, but to go to the seller's website and look into it in detail.
Other problems, however, are affecting not only Latvia, but also other relatively small markets. Statistics on retail sales in Latvia last year, namely the retail trade index, compared to 2019, declined rather than increased, as it might reasonably be expected.
The answer is to find out where the Internet shops are registered. Many sellers are part of international groups and the Latvian subsidiary only operates physical shops and employs local vendors. However, Internet shops are not created in each country and, in most cases, there is one for the whole group, located where the parent company is established.
As sales volumes on the Internet grow, it is not reflected in the performance of such Latvian companies and also in taxes paid in Latvia.
Then, once assembly restrictions are lifted, people will certainly come back to stores as well. However, Internet sales have strengthened their positions and are likely not to lose them even when the situation returns. Therefore, this phenomenon should also be taken into account by State representatives, for example by planning how much tax can be collected from Latvian trading companies.