Reliability and niche solutions

02. April 2024

How to compete with the world’s e-commerce giants?

E-commerce business is very dynamic and constantly growing and developing. At a time when the market is so saturated, in addition to having to compete with the big global players, Latvian online stores have more and more challenges. How can local e-commerce companies compete with the giants and their aggressive marketing? Industry experts and professionals discussed this in the discussion within the framework of the Baltic e-commerce annual awards E-Commerce Star 2024.

In the Delfi studio, in the discussion “Global or local: how Latvian e-commerce companies can be visible in the era of Temu and Amazon”, met Kristiāns Godiņš, Head of the International Services Department of Latvijas Pasts; Ineta Bukele, Cash Management and Trade Financing Department Manager of SEB banka; Viesturs Kančs, E-commerce and Innovation Manager of  Balcia; and Sniedzīte Vilmane, E-commerce Manager of Mēness aptieka. Together with the host of the discussion Artis Ozoliņš, industry experts searched for answers to questions about how Latvian and global e-commerce companies can coexist.

Latvian trump card – fast local delivery

Sometimes the small country syndrome pays off, especially in the e-commerce industry. Sniedzīte Vilmane also pointed to this in the discussion, mentioning as an example the close cooperation between online stores and parcel suppliers. When purchasing a product, not only the customer service of the merchant works with the buyer, but also the customer service of the delivery company. For example, when returning a parcel, the first contact will be directly with the delivery partner – Latvijas Pasts or another shipping company. It is easy for the customer to receive the information they need, and this is a great added value.

“Customer service in e-commerce is one of the essential factors that ensures loyalty,” says Sniedzīte Vilmane, E-commerce Manager of Mēnes aptieka.

As the number of suppliers in the Latvian market increases, e-merchants also adapt to the customers’ desire and need to receive their purchase faster and faster. If you must wait several weeks for the product from the warehouses of online stores in Europe or further countries, in Latvia receive it in of a couple of days. On the other hand, Kristiāns Godiņš points out that reliability is also promoted by the knowledge that you will not only receive the product quickly, but you will be able to return it conveniently.

But merchants shouldn’t rely on delivery speed alone. As observed by Ineta Bukele, the large foreign e-commerce companies are a step ahead in terms of the convenience of returning goods – the customer already receives a barcode sticker in the package, so all they must do is scan it at the parcel machine. “The company must understand all stages and “touchpoints”. If one of the contact points will be negative, will not work well, it means that the buyer will also be automatically dissatisfied, and perhaps the logistics will run into something, but will lose customer’s e-commerce company,” says Ineta Bukele.

Learn more about the experience and observations of Latvian companies in the video recording of the discussion “Global or local: how Latvian e-commerce companies can be visible in the era of “Temu” and ” Amazon””:

Customer service as the cornerstone of successful e-commerce

In recent years, the thinking of both buyers and entrepreneurs has changed – from the choice of higher quality products to the demand for sustainability. It is a little different for those e-merchants who sell an intangible product such as insurance. In this type of business, customer service plays an important role, says Viesturs Kančs. For instance, Balcia strives not only to explain point by point the advantages of its product – insurance – but also to consider and pay out claims submitted by customers as quickly as possible. “And then we will know that, yes, this person had a good experience, most likely, what we also see, he will buy again based on this experience,” tells Kančs.

Bad experiences also happen, which can scare away a regular customer. Here, Ineta Bukele shares her experience when she bought a very simple item from an e-commerce store – lip balm. The small item, which fits in the palm of his hand, was waiting for her in the parcel machine compartment, packed in a large A4 format box. “As someone who thinks about sustainability and not having to transport air, I expected this package to be smaller from this e-commerce store. So, I know I won’t buy anything from this e-commerce store again because the disappointment is greater than the cool feeling the lip balm gives,” says Bukele.

Nuances play a very important role. And for more and more people, it is precisely the packaging aspect that is important. Sniedzīte Vilmane has also noticed this among the customers of the Mēness aptieka online store. She remembers a case when a customer contacted customer service who wanted to return the product packaging – a box. “Customers are asking for proper packaging, customers are asking for no plastic. This was the first case of this in our experience. We really didn’t know what to do when a customer asked: ‘Please tell me where I can return the used packaging,'” says Vilmane. Such situations encourage the company not only to adapt to the customer’s wishes, but also to think sustainably.

What makes local businesses stand out?

Although price and speed are still the most important criteria in e-commerce, reliability, successful previous experience, as well as niche products that cannot be obtained elsewhere are also mentioned by the discussion participants as other important aspects. One niche product is custom-made apps and other digital solutions. Viesturs Kančs mentions Balcia insurance as a good example, which a person can buy by himself, without the intermediary of a broker, see everything in an easy-to-view app, where they can also apply for the necessary redemption.

“Latvia competes with strong ideas, with small niche ideas that can be brought to the world and which most likely will not be found in the big giants – “Amazon” or others. If all this is additionally thought about a special brand story, then, I think, it has a very big potential in export, to reach the right audience,” says Viesturs Kančs, Balcia E-commerce and Innovation Manager.

It is also important for buyers in Latvia to trust the company, to know that the product will be of high quality and delivered quickly without incident. One of the reasons why a customer will choose a local e-merchant, rather than one of the global players, is the guarantee that when something is not satisfactory, it will be easy to communicate, and the merchant will understand the customer. Kristiāns Godiņš also points out that in the global world it is clear to everyone that even local e-merchants do not only sell goods produced in Latvia. At the same time, the choice in favor of a local merchant will be because the merchant can deliver the product in a short time, even if it costs a little more than when ordering from China.

The participants of the discussion also express that it is essential for the smallest e-commerce companies in Latvia not to lie about the availability of the product and to be honest, immediately indicating in the online store that the specific product is available in two, 14 or 50 days. This will help to avoid situations where the customer finds out about the fact that he has to wait for the product for several weeks only after payment.

2024 is the first year when E-commerce Star will take place throughout the Baltics, and from now on the competition will be held in Estonia, Latvia and Lithuania every year. In the previous three years, it was a Latvian-wide competition. You can apply for Baltic E-commerce Star 2024 until 8 April 2024 online here. The participants will be evaluated in four categories by an international jury, which will include industry experts, the total prize pool is 20,000 euros.

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