The prospects for electronic commerce (EC) in Sweden, are as good as anywhere in the world right now, with the possible exception of the United States.  The growth of electronic commerce is being supported to a large degree by encouragement from the Swedish government, but also through the rapid expansion of foreign Internet pioneers who are venturing into Sweden. 

Statistics 

The widespread use of the Internet is more advanced in Sweden than in the rest of Europe according to a recent IDC Research report.  About 40 percent of Swedes have access to, and use, the World Wide Web (Source: IDC).  Only Finland has a higher percentage of on-line users. (Source: Inter@ctive Week) 

Sweden is also rapidly becoming the world leader in computers per household. By December 1999, at least one of every two households is projected to have an advanced personal computer, with most linked to the Internet.  This presents tremendous potential for the establishment of an EC infrastructure in Sweden. 

Emerging Electronic Commerce Niches 

Many foreign EC pioneers have been pouring into Sweden to provide initial European portal sites because of the strong prospects for EC. In December 1996, Altavista opened its first European mirror site in Sweden through a partnership with Telia. Within three months usage surpassed 8 million visits per week. 

In July 1997, CNN Interactive chose Sweden for its first site outside the U.S. and Swedish as its first non-English language.  CNN Interactive indicated that it selected Sweden because its people have a strong interest in the Internet, many speak English so they will look at other CNN news, they have high news consumption, and the country has a high concentration of personal computers.  CNN Interactive will open its first office outside the U.S. in May, a seven-person facility in Gothenburg, Sweden.  Once again, Telia will handle all of the telecommunications. 

Major Electronic Commerce Providers 

Telia 

As the countries largest telecommunications provider, Telia has leveraged its market dominance to partner with major international EC vendors and ease the transition into the Swedish market.  The company handles telecommunications and has proven to be a strong ally in developing EC services. 

Torget – Sweden Post 

Sweden’s largest Internet portal was created by the Swedish post office.  The site is called “Torget”, which is Swedish for “marketplace”.  The site attracts 240,000 people a day and the name is recognized by as many as 68% of the adult population.  In the past six months, the site has also attracted 105 on-line merchants, a number that they expect to double by next year. 

The strategy for the site is to leverage its use to promote the delivery of packages, but also to process payments through its bank.  The bank is used by 95% of the companies to clear payments and it establishes a secure method of insuring payment.  As a result, Torget has paved the way for future EC ventures that may have been held back by traditional European attitudes toward payment over the Internet. 

Currently, the Torget site contains 5 local Torgets, each targeted at a different segment of the EC marketplace, establishing virtual communities.  Plans are to add 100 new local Torgets in the coming year and 100 more in the year after.  Because Sweden is still a relatively small market, being a country of only 8 million people, future expansion after 2000 will target the international community.  Specifically, the rest of the EU as well as draw users, merchants, and investors from the United States. 

Another strategic target is business to business commerce, through the development of extranets.  Torget currently supports 50 trials of this service, but expects 500 more before the end of next year. 

Sweden Post is also a founding member of the International Commerce eXchange (IXC) which was launched by the EU earlier this year to create a framework for secure transactions that will work everywhere in Europe.  The group is working to create unity in the European approach to EC to create solidarity.  (Interactive Week March 16, 1998) 

E*Trade 

On-line financial services have attained fast acceptance by customers, and very early applications of computerized systems have made Sweden one of the world leaders in the field.  This is especially important for such vendors as E*Trade, who have had unprecedented in Sweden compared to other EU markets. 

"Sweden is certainly one of the most developed European markets for on-line financial services and will be used as the base for our expansion in Scandinavia" 
 

--Judy Balint, President E*trade International. 

Obstacles 

The major obstacle to EC in Sweden is the relative size of the market, although the company has one of the highest Internet connectivities in the world, the country has a population of only 9 million people.  Future expansion will most likely focus on the U.S. and the rest of Europe because the Swedish market will become saturated. 

Another threat to future EC expansion in Sweden is competition from U.S. and other European EC giants.  While the current expansion of these companies into the Swedish EC marketplace has spawned innovation and growth, it may pose a threat if a solid local competency is not developed in the meantime.  As stated by the IXC Treasurer, Chris Taper, in regards to efforts to create a solid infrastructure for on-line security and authentication initiatives, “There is a bit of urgency around ICX.  We need to get something done in the next six months.  America won’t wait on Europe forever.” (Source: Inter@ctive Week)