Switzerland is a country of around 8.4 billion people with high internet penetration rates and a willingness among local consumers to buy from foreign businesses.
It is an attractive prospect as a location for establishing a foothold in a new local market but, as well as the range of opportunities available, also has its own set of challenges.
What Is The Swiss Market Worth
Switzerland is ranked 10th in terms of European e-Commerce. With respect to sales, the market was worth €7.4 billion in 2017 with Swiss consumers spending around €2,149 online annually. Internet penetration rates in Switzerland are high and the country is known for its high speed digital infrastructure, which has supported the increasing popularity of e-Commerce in the country. Currently, 95% of the population aged between 16 and 65 uses the internet regularly and 90% of those consumers have made at least one purchase online. Fashion is one of the most popular categories for online purchasing for Swiss shoppers, followed by buying tickets for transportation and holidays and paying for entertainment.
Swiss consumers are very open to buying from overseas businesses and currently around 61% of purchases are made from abroad. This makes Switzerland one of the top locations in Europe for overseas purchasing. Combined with the fact that Swiss consumers are some of the highest online spenders in Europe (behind only the UK), the Swiss market is clearly a very attractive option for businesses looking to appeal to a wider range of keen consumers.
What Challenges Do Exporters Face
- Payment preferences. Swiss consumers tend to favour payment methods such as PayPal, as well as the option of credit cards – like many other online shoppers from all over the world. However, many local consumers here also want to have the option of paying via invoice and a considerable number of shoppers choose to pay on receipt of goods, as opposed to during an online checkout process.
- Currencies. Many Swiss consumers are open to making payments in other currencies but also like to have the option of paying in Swiss Francs.
- Delivery and returns. There is no automatic right of return in Switzerland so most customers don’t expect to have the option of returns, especially for free. So, overseas businesses offering returns are at an advantage, competitively, and the cost can be shared with consumers. However, Swiss consumers do have expectations when it comes to delivery costs – most won’t want to pay more than €5-7.
- Customs. Switzerland is one of the few countries to still use a weight based system for customs tariffs. So, the heavier the items being sent, the more the shipping is likely to cost. It’s crucial that customs paperwork is properly handled and filled out as this can cause serious issues if not. For example, inadequate customs paperwork may result in unboxing and x-ray, incurring a charge of CHF 13.
- Language barriers. Switzerland has three official languages German, French, Italian (four, if you include Romansh). While many consumers tend to speak English there may be local labeling laws that require products to be sold with guides and information provided in a local language.
- Logistics challenges. Switzerland has a very well established logistics network but it’s important to choose the right provider to ensure the efficiency and cost effectiveness of your deliveries.