E-commerce Market Entry: Opportunities and Challenges for Finnish Microbusinesses in Sweden

Microbusinesses are the foundation of Finland’s economy, representing 93% of all enterprises and employing nearly 250,000 people. Despite their significant contributions to innovation and regional development, many Finnish microbusinesses face growth limitations due to the size of the domestic market. For these businesses, international expansion is not merely an opportunity but often a necessity.

Among potential markets, Sweden stands out as a strategic option. With a population nearly twice that of Finland and a robust e-commerce sector valued at over €14 billion in 2024, Sweden offers an attractive avenue for growth. Its digitally advanced consumer base and efficient logistics infrastructure make it particularly appealing for Finnish microbusinesses looking to scale without requiring significant upfront investment.

However, entering the Swedish market requires more than ambition. My MBA thesis, E-commerce Market Entry: Opportunities and Challenges for Finnish Microbusinesses in Sweden, delves into the complexities of this process, identifying key barriers, opportunities, and strategies for successful entry.

Sweden as a gateway to global markets

Sweden is not just a target market; it is a strategic gateway for Finnish microbusinesses. Successfully navigating the challenges of the Swedish e-commerce landscape equips businesses with invaluable experience and insights that can be applied to other international markets.

Sweden’s mature e-commerce infrastructure and consumer sophistication make it an ideal testing ground for refining strategies. For example, mastering the integration of local payment systems in Sweden can prepare businesses to tackle similar challenges in larger markets like Germany or the United Kingdom. Similarly, aligning with Swedish sustainability standards provides a competitive edge that can be leveraged in other environmentally conscious regions.

Navigating market entry challenges

While Finland and Sweden share geographic and cultural proximity, these similarities can mask critical differences in consumer behavior and expectations. Swedish consumers are renowned for their high standards, particularly in areas such as sustainability, product quality, and seamless online experiences. These expectations demand that businesses go beyond a basic adaptation of their operations and instead invest in tailored, market-specific strategies.

Logistical challenges were a recurring theme in my research. Cross-border shipping costs are significantly higher than domestic logistics, often adding 20–30% to operational expenses (PostNord, 2024). Managing these costs while maintaining competitive pricing is a persistent struggle for small businesses. Additionally, Swedish consumers expect fast and flexible delivery options, seamless return processes, and transparency throughout the customer journey—standards that can be difficult for resource-constrained microbusinesses to meet.

Localization also emerged as a critical barrier. Successful market entry requires more than translating a website into Swedish; it involves aligning branding, payment systems, and customer service with Swedish consumer expectations. Payment options such as Swish and Klarna are widely used in Sweden, and their absence can lead to lost sales opportunities.

Leveraging digital tools

Digital platforms have revolutionized the way businesses approach internationalization. E-commerce platforms such as Shopify and WooCommerce, combined with tools like search engine optimization (SEO) and digital marketing, provide microbusinesses with the means to reach Swedish consumers directly. However, the mere availability of these tools is not enough.

My research highlighted a significant gap in technical knowledge among microbusinesses. Many businesses lack the expertise needed to effectively implement and optimize digital tools. For instance, SEO remains underutilized, despite its proven ability to drive organic traffic. Similarly, integrating localized payment systems or optimizing supply chains requires both technical skills and financial resources, which are often in short supply.

This underscores the importance of collaboration. By partnering with Swedish logistics providers, local influencers, or regional marketing agencies, Finnish microbusinesses can bridge resource gaps and enhance their market presence. Such partnerships not only provide practical support but also lend credibility to foreign businesses trying to establish themselves in Sweden.

Insights for future success

The findings in the thesis underscore the importance of preparation and adaptability. For Finnish microbusinesses, the key to success lies in understanding the nuances of the Swedish market and aligning their strategies accordingly.

• Invest in localization: From product descriptions to payment systems, every aspect of the customer journey must resonate with Swedish consumers.
• Embrace sustainability: Environmental responsibility is a baseline expectation in Sweden. Businesses must not only adopt sustainable practices but also communicate them effectively.
• Foster partnerships: Collaborating with Swedish logistics providers, influencers, and marketing agencies can provide essential resources and establish credibility in the market.
• Leverage digital tools: With the right expertise, digital platforms and Artificial intelligence can enable small businesses to overcome resource constraints and reach their target audience effectively.

Sweden presents a unique opportunity for Finnish microbusinesses to grow beyond domestic borders. However, success requires careful planning, resource allocation, and a willingness to adapt. By addressing logistical challenges, investing in localization, and leveraging partnerships, Finnish businesses can unlock the full potential of the Swedish e-commerce market.

This journey is not just about market entry; it is about building a foundation for long-term growth and competitiveness on a global scale. Sweden offers a valuable starting point, but it is up to Finnish microbusinesses to seize the opportunity and turn challenges into lasting success.

Further reading

Here is the link to the thesis: https://urn.fi/URN:NBN:fi:amk-2024121134831

• How to achieve international e-commerce success. An article written in 2024 by Linda Laszlo Ek, Business Sweden, https://www.business-sweden.com/insights/articles/how-to-achieve-international-e-commerce-success/
• E-commerce: a possibility of global success (in Swedish). A podcast by Linda Laszlo Ek, Business Sweden, https://www.business-sweden.com/insights/podcasts/e-commerce---a-possibility-of-global-success/ 
• En djävel på e-handel (in Swedish). A book written in 2022 by Arash Gilan and Nic Staeger  - experts behind the e-commerce success of several big brands in Sweden,  https://www.endjavelpaehandel.se/about 

About the authors

Malin Vesterback is a project manager and coordinator specializing in digital communication and multimedia. With a strong background in rural development and entrepreneurship, she is passionate about helping small businesses navigate the complexities of market entry and digital transformation. Her MBA thesis explores the intersection of e-commerce and internationalization, providing actionable insights for Finnish microbusinesses aiming to expand into the Swedish market.

Rosmeriany Nahan-Suomela is the thesis supervisor and Head of the master’s degree program in Digital Business and Management at Novia UAS.

The blog post has been reviewed by Novia's editorial board and accepted for publication on 17.12.2024.