Switzerland may be small, but its consumers have considerable online buying power. Find out more about this unique market.
This small-but-mighty nation may not immediately come up on your radar of potential markets for cross-border e-commerce, but Switzerland is worth a look. Businesses in the U.S. are already enjoying a healthy trade relationship with Switzerland. In fact, the U.S. is Switzerland’s second-largest trading partner, second only to Germany. The U.K. is a distant third, followed by China and France.
With a well-educated, affluent, and worldly population of 8.6 million (and 91% of that population using the internet at least once a week), Switzerland is ripe for cross-border e-commerce. Swiss consumers tend to spend more online compared to other countries of its size. But before you leap into this market, it’s important to take some time to understand the local culture and preferences.
Here are seven things you may not know about Switzerland:
- It takes its sovereignty and independence seriously. Switzerland is not part of the EU, nor is it part of the European Economic Area (EEA). However, it is a founding member of the European Free Trade Association. Switzerland is a country that likes to blaze its own path and retain control over its own trade agreements.
- Online shopping is popular. Ninety percent of the Swiss population has shopped online at least once, and 95 percent of consumers between the ages of 16 and 65 regularly use the internet. Since 2015, consumers in this market have spent 8.4 billion Euros online.
- Consumers turn to the internet to travel, dress, and find deals on electronics. Shoppers in Switzerland shop across a variety of product types and categories. Top categories for e-commerce include travel services, clothing, sporting goods, books, consumer electronics, and household items.
- Preferred payment methods vary. Having the right mix of payment methods is crucial to engaging shoppers, and Swiss shoppers are no exception. Consumers in Switzerland prefer paying by invoice, credit card and PayPal for online purchases. Other common payment methods include cash on delivery, online bank transfer (which is also a popular choice in Germany), prepaid or rechargeable debit cards, and post-office issued checks. A fast-growing local mobile payment app, Twint, is now being used by more than 2 million consumers across the nation.
- Swiss consumers love cross-border e-commerce. While there are a few Swiss e-commerce brands that have strong loyalty, consumers in this market are open and eager to shop cross-border. Eighty percent of Swiss consumers who shop online have made at least one cross-border purchase. Often, consumers do this out of “necessity,” as they look for items and categories that are not readily available from domestic retailers.
- English language is not a barrier. While Switzerland doesn’t have an official language, many consumers here speak English and are not turned off by websites that are presented in English. In fact, the Swiss financial markets recently made the change to English as their official language when doing business. Still, it’s wise for cross-border retailers to consider presenting their websites in other languages for this market. Other commonly-spoken languages include German, French and Italian. Over 60 percent of consumers here speak Swiss German.
- Mobile commerce is growing fast. Mobile optimization will be key for cross-border retailers to engage with consumers here. More than half (73%) of the population of Switzerland owns a smartphone. The mobile commerce market is expected to increase at a compound annual growth rate of 15 percent by 2021. Shopping on a smartphone now dominates making purchases on a desktop computer.
According to an analyst at eMarketer, “Consumers in Switzerland, one of the world’s wealthiest counties, are increasingly deciding to spend their online francs abroad.” Smart cross-border retailers can capture some of this market share by offering the right categories and the mix of payment methods Swiss shoppers want most. It’s also important for cross-border retailers to display pricing in Swiss Francs, which is the dominant currency here. Consider offering shoppers in this market transparent pricing to avoid unexpected costs when purchases arrive but a/b test payment options, such as cash on delivery, since some Swiss shoppers may prefer to use this method.
To learn more about how to deliver a world-class, localized e-commerce experience in Switzerland and many more global markets, get in touch today. To find out if your online store is ready to go global, check out our free International E-commerce Kit.