According to a survey conducted by Swedbank Financial Institute, 62% of Latvians have ever shopped in online stores outside the European Union (EU), mainly on Chinese online trading platforms.
In addition, one in five shoppers outside the EU regularly, at least once a month. It is these buyers who will be most affected by the changes from 1 July, when the new EU regulation enters into force. It stipulates that all goods purchased in third countries will have to be declared and subject to value added tax (VAT).
Most often, Latvians (82%) choose Chinese online stores for purchases outside the EU.
This choice is particularly common for shoppers who shop regularly, at least once a month, outside the EU. In other countries, such purchases are made significantly less, followed by Great Britain, where 29% of consumers from Latvia buy, and other countries. Young people aged 18-29 are the most likely to shop outside the EU, with 17% of respondents in this age group saying they do so more than twice a month, with the largest share – almost a third – in US online shops.
“People’s shopping habits have been significantly influenced by the Covid-19 era, when many stores rapidly switched to digital platforms or added to existing ones. The large number of regular shoppers is not surprising, especially for young people, “Shopping in the EU several times a month is likely to make these people more likely to shop on a regular basis, raising concerns about the usefulness and necessity of the goods they buy. Swedbank Financial Institute expert Evija Kropa.
The amount spent on online purchases outside the EU is in most cases not large, with up to 80% of shoppers spending no more than € 50 a month on this, and one in ten also spending more. People who choose to shop in Russian online stores show the highest monthly spending: this group has almost three times the share of consumers who spend more than 50 euros a month on purchases outside the EU. Meanwhile, purchases in Chinese online stores are characterized by markedly low spending: 38% of the customers of these stores spend less than 10 euros per month, while another 48% spend between 10 and 50 euros.
“The Chinese market is characterized by a very large segment of low prices – it is not for nothing that Chinese online stores are popular all over the world. that the buyer is much more willing to do without this product or find an equivalent solution in the EU online stores than every time the customs clearance procedure, “says Evija Kropa.
Citizens who shop online on a daily basis are generally well informed about the changes when shopping outside the EU – 90% have heard of the new requirements, which will take effect on 1 July this year. Most shoppers (64%) are concerned about this, acknowledging that the need to declare and pay VAT on all, including small consignments from outside the EU, is unpleasant for them. Dissatisfaction is even higher among consumers who do shop regularly outside the EU, especially in China.
In response to unpleasant changes in the way they buy goods, 23% of people who used to shop outside the EU plan to give up the habit altogether, while another 57% expect to shop less often at lower prices in the future. It is expected that one third of the population will be able to reorient and make more frequent purchases in EU online stores in the future. This forecast is most often expressed by consumers who have so far bought in online stores in Great Britain (32%) and Russia (51%).
A significant decline in the volume of purchases is expected in the low price segment. 38% of shoppers who have so far spent no more than € 10 a month on purchases outside the EU are considering giving it up altogether with the entry into force of the directive. Meanwhile, only 9% of Latvian online store customers from these countries, mainly high-income residents over 1,000 euros (18%), plan to shop outside the EU to date.
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