International E-Commerce

This graph shows how many DKK you must pay for one SEK.

In May 2009, I did the first real successful launch of a Swedish webshop in Denmark, with CoolStuff. It went really well. I would like to say that is was because I was a superstar, but as you see in the graph, the currency did a lot to help keep the Swedish prices low.

The exchange rate was 148,50 SEK for 100 DKK at its lowest. Before this, the Swedish currency had been strong for a long time so the high value of DKK made it very easy to sell from a Swedish webshop to Danish customers.

But since spring 2009, the DKK and EUR have just been decreasing in value, especial since May this year, the currency dropped like a stone.

This resulted in a lot of problems for all Swedish webshops who sell from Sweden to Denmark. The products they had in the shop for 1.000 SEK back Spring 2009 which could sell for 673 DKK (1000/1,4850), was now sold for 900 DKK (1000/1,1109). For the end customer, this is a price increase of about 34%. As a result, the Danish customer stopped shopping in the Swedish shops with the 34% higher prices and focussed on buying from domestic Danish shops with much lower prices.

Conclusions:

• As a Swedish E-tailer – Avoid the Danish market right now and other EURO markets e.g. Finland and Germany (The DKK follow the EURO). The better once are Norway, UK and Switzerland, but the best might be to focus on your domestic market while the SEK is so strong.
• What is bad news for Swedish etailers, is good news for Danish one (and German once that try to overtake Sweden right now) Right now most Danish shops can make a bargain by entering Sweden.
• Don’t forget to think about the currency rate. It can boost or break your business. Use it for you advantage when you sell in more markets