Transcription:
Radosław [00:01:00]:
Hello everyone and welcome in the first episode of our podcast. My name is Radek Opalko and I’m responsible for sales and internal expansion in media for your e commerce agency. My guest today is Henrik Hansen from Makes you Locale. Hello Henrik. Really nice to have you.
Henrik [00:01:20]:
Hello. Hello. Hello.
Radosław [00:01:21]:
Henrik is responsible for Nordics, but maybe you would better describe your role in Makes you look up.
Henrik [00:01:30]:
Yes, I’d be happy to. So my name is Henrik. I’m originally from Denmark, born and raised in Denmark, But I’ve lived 20 years in Sweden now. And what I do at Makes you Local is that I help e commerce companies and brands expanding abroad. So for instance, Nordic companies going to other countries in Europe or Polish companies going to the Nordics or elsewhere in Europe. That’s a privilege to work with a lot of different companies with different products and services.
Radosław [00:02:07]:
Yeah, thanks for this explanation. And it’s very interesting combination because you said that you are Danish but living for 20 years in Sweden. So what’s your feeling? What do you feel more? Are you feeling more Danish or Swedish?
Henrik [00:02:25]:
A relevant question. I actually have two passports. I have a Danish one and a Swedish one. If you twist my arm and say what you feel most like, then I would probably say, well, it’s the Olympic games right now. So I do double. When it’s table tennis, I like Sweden and when it’s badminton or other sports, my vote goes for Denmark. So I feel a bit of both. But I’ve actually worked and lived in five different countries in Europe and outside as well. So I feel more international than I feel very Swedish or very Danish. And I think it kind of helps me in my job that I’m not either or, but I can understand different cultures and speak different languages and so on. I feel a bit of both.
Radosław [00:03:23]:
To answer your question and the way of living. How would you describe, because all of us know this famous Danish style of life. Danish people are perceived as the most happiest people in Europe. How is it in Sweden and how, how the representation of this very happy people find himself in Sweden, which is not as happy. Taking under consideration of all these aspects and these ratings.
Henrik [00:04:01]:
Yeah, I know the list you are referring to and I think the Nordic countries, including Finland and Norway are actually always ranked at the very top. So people outside of the Nordic region tend to think that northerners, they run around and smile and laugh and are happy, joy all the time. But, but I think generally speaking life is pretty similar. If you live in any, any of the countries in the Nordic region, I think life is pretty similar. It’s a high status of living. You have a good income, you have money to spend. There are no wars, there are no earthquakes, there are no tornadoes. So it’s cold in the winter. Yes, but you do have a quality of life. That’s probably one of the reasons why that these countries rank high in the happiest people on earth survey.
Radosław [00:05:07]:
Definitely in Europe. Yeah, because exactly this, this, this ranking I was referring to was for Europe, but I imagine that it’s also high in the world ratings. And while I was preparing to this, to this interview, I. I was looking for some fun facts or some interesting facts about Denmark or Sweden or Nordics in general. And I found something like the people in Nordics are so used to pay online or by card that there are even areas where paying by cash is forbidden. Is it true?
Henrik [00:05:46]:
Yeah, forbidden is maybe a strong word, but just not accepted. I think there are, I think not. Actually. I know that the people outside of the Nordics and if you look at Sweden and Denmark in particular, then I think there are a lot of people outside those countries. I think it’s strange that you cannot pay in cash. I mean, in most countries on the planet you pay in cash. And then there’s some of it which is digital and maybe you get a digital invoice or you pay with PayPal or whatever. But it’s true that one of the big chains, cinema chains in Sweden, actually removed the opportunity of paying in cash. And that’s eight years ago, eight or nine years ago now. And it created quite a big fuss because older people, not used to paying with your mobile, they would not be able to go to the cinema anymore. But you know, things change. And the cinemas in this case, they say it’s not so much because we don’t want to accept the cash, but we don’t want to handle the cash. So it’s because of our employees, they shouldn’t handle cash because that makes them a target. And that’s also why you see in a lot of places, my son’s football team, if they have some rally where they collect money, they don’t want cash because they don’t know what to do with that afterwards. You know, it’s like dirt on your hands. You don’t want cash, you pay by your mobile payments.
Radosław [00:07:27]:
Yeah, it’s the process which is also going on in Poland. Even though it’s not forbidden or it’s still allowed to pay with cash. But probably, you know, the blick. So this is the payment method which allows very fast payment. And right now the young people, my daughter also, when she wants some kind of cash or something like that, you just do the blick by phone and you have it in few seconds. Yeah, there is no need of having a cash and you can pay with this phone almost each shop. It also, I think it’s optimization because it reduces queues. Yeah. Because every time when someone pays with cash, he has to or she has to count all this money, the counter person needs to give it back. So I believe it’s also time saving, but I don’t know how it’s in Nordics, but there are a lot of cash defenders in Poland. So a lot of people are saying, yeah, yeah, you will see when the war comes or something, you will not be able to pay at all. So each site has its own advantages and disadvantages. As usual.
Henrik [00:08:37]:
I completely agree. And it’s the same kind of criticism that you hear in the Nordic countries. What would happen if some external power suddenly take over the mobile networks and you can pay with cash or you can pay with digital payments. So I think it’s the same pros and cons, no matter what country in, in the western world you look at. But as you said, that’s the development, that’s the way it’s going.
Radosław [00:09:04]:
Yeah, that’s development. Another issue is that they are saying that government sees all what you are doing while you are paying with, with electronical devices. But as you mentioned this, the process is I believe, general. But another thing which I found is that people in Scandinavia and Nordics are perceived as little bit more patient than it is. For example, in Poland they can wait for the delivery a little bit longer if they get what they want. Because in Poland, I don’t know if you are aware, this is a very big issue. So quick delivery time is an asset. So people can pay even more for the product. To have it quicker. And is it true that in Scandinavia is not so important aspect?
Henrik [00:09:57]:
I would say as in any other country, of course, logistics and delivery are two very important areas. However, I think it also depends on what you buy, to be honest. What is it that you buy and where do you buy it from? It’s no secret that big international marketplaces outside of Europe have seen a boom in the number of customers they have in the Nordic region. And if you do buy something from China or elsewhere, obviously it’s not going to get to your door in one or two days. So I would say for companies that are local, for e commerce companies that are based in one of the countries, their consumers, their customers would expect very fast deliveries within a couple of days, pretty average two to four days. Sweden is probably the exception because it’s a big country and it’s quite a long distance from. If your company or your storage is in the south of Sweden and it needs to go to the countryside in the north Sweden, then it’s almost impossible to drive, you know, a car from the south to the north in one day. So there are exceptions. And I would just conclude it by saying logistics is still very important. But I don’t see that as an issue for potential e commerce companies from Poland. They are, you know, they are able to serve the northern countries in the number of days that would be expected.
Radosław [00:11:41]:
Yeah. And if we touch this payment and delivery, what are the most popular payment and delivery methods for the Nordic countries? Is it like these general companies which are available in the whole Europe or world or the ones from the inside? How would you see?
Henrik [00:12:08]:
Yeah, I would see if we take the payments first. It’s a bit of both. It’s really a mix. But if you look at, if you look at the markets and when I say the markets, I mean Norway, Denmark, Finland and Sweden. So if we look at those four countries as a collective, apart from Finland, mobile payments are the fastest growing payment method in Norway, Denmark and in Sweden. And the good thing here is that it’s actually, you know, there are initiatives of trying to make something smart that works across all three countries, but that’s local. You know, Norway, Denmark and Sweden, they each have their own like you have blick, we have vips and we have Swiss and we have mobile pay. So those three options are for, for three different countries. So mobile payments is big and is the fastest growing payment method. Then you have traditional payments via card puts, debit cards or credit cards, which is really normal as well. And then your, your last big portion of Payments is, is invoice. So you receive your goods, you check the goods. Yes, these shoes are the ones that I’ve ordered. And then you normally you pay within 30 days. So this is obviously a payment method that was actually developed in Sweden. So naturally, naturally this really big in Sweden, but It’s less than 2% in Denmark and you know, it’s not a lot more in Norway. So in terms of payments, you know, speak to the experts because it does vary. Of course you have your big players like your Adyen, the Dutch company that is present. Yeah, Peter, of course you have those players in the Nordics as well. But my general advice would be check it out with somebody that knows and they will, they will tell you, you know, they will tell you what are the payments, payment methods that you must have. What is it that you can consider.
Radosław [00:14:12]:
The delayed payment because. Sorry to interrupt, but this, you mentioned this invoice. So you receive the goods, you have the invoice and you pay later. But is this like buy now, pay in 30 days or it’s like pay just after receiving the goods? Because right now in Poland is very popular, this method that you click now, you put it in the basket, the order comes and you have 30 days to make the payment. Yeah. So is it the same or is it some kind of difference?
Henrik [00:14:46]:
It’s exactly the same. You know, it’s exactly the same. And the reason for this payment method being so popular is what you just described. You receive the goods, you know, the transfer of trust. There is no, there is no liability for you as an end consumer. The one that is taking the liability if the E Commerce company is not delivering is the one providing the payment method. So you have a bank on the other side and if you don’t receive your goods, you don’t pay. So I think the consumers really, they really like this payment method in Sweden. It’s, you know, it’s less than 2% in Denmark. So it, you know, those two countries just shows you some of the differences between Sweden and Denmark in terms of preferences. You had a question regarding logistics as well.
Radosław [00:15:39]:
Yeah, yeah, yeah.
Henrik [00:15:40]:
And obviously, obviously Sweden is much, much bigger than Denmark and Norway and Finland. So in terms of getting parcels to the border of each of those countries, of course there are variations. So if we start by not excluding, but if we start focusing on Norway first, obviously Norway is outside of the European Union, so there are other rules for Norway. Norway is like sending parcels to the uk. There is some administrative things that you need to do, customs, etc. But for Denmark and Sweden and Finland, it’s straightforward. So you deliver parcels and you obviously e commerce companies in Poland have a preference for some particular logistical partner. They provide the transportation to the border and from the border normally somebody local would take over and make sure it reaches the end consumer. So same answer again as with payments. If you don’t know, check it out or ask somebody that knows the ins and outs of the landscape. In the Nordics a company like makes you local or somebody else, but the.
Radosław [00:17:01]:
Global players like DHL for example or DPD are there present. Because you said transport it to the border and then the local company will deliver it. Is it always like that or those global companies are also delivering right to the door of the customer?
Henrik [00:17:17]:
Yeah, I think Sweden may be slightly different in some aspects because DPD you mentioned, maybe they’re more Denmark than they are in Sweden. It’s an ongoing discussion who you should be using. I think the bottom line is that if you deliver your goods to the consumer in the Nordic region within timely manner, as it’s called now, what’s timely manner? But that is somewhere between two to five days, I think that is fully acceptable. You know the trick here for, for companies outside of the Nordic region is simply being honest on your checkout. So expected delivery is so and so you get your tracking code and you can, you can follow the package. If that is done correctly, nobody will be hammering customer service for, you know, for answer to where’s my package questions.
Radosław [00:18:13]:
And is there also because in Poland we have a quite right now very popular form like dispersal machines. So you don’t get the package from courier, the courier just leave it in the machine and you get it from there. There is a Polish company Impost, which started that and right now each courier has its own machines. So it’s very, very comfortable for the people who are working during the days. You cannot pick up the parcel from the courier so you go there and it’s waiting for you. Is it also popular in Nordics?
Henrik [00:18:50]:
It’s growing obviously in my job. I’ve been to Poland, various cities many times and I must honestly say I am so impressed with the parcel lockers. Not only that you get them delivered to the locker next to your house or your office or the train station, but also that you can actually return your parcels. And there is a general misperception now people in the Nordics think that Poland is an underdeveloped e commerce market. And that has been my, one of my focus areas for, for quite a few years now. Because in terms of delivery parcels in Terms of actually, in terms of actually being able to, to put the goods in a parcel locker and make sure that it is also, you know, made available for the customer is first class. In Poland, in the Nordics we are getting. There are parcel lockers but it’s nowhere near the same growth and coverage as you have in Poland.
Radosław [00:19:58]:
Yes, I don’t know if you heard that. We have also those refrigerated parcel machines so you can also store food there. So yes, thanks to, thanks to. Thanks to impost I guess is developing really fast. But you mentioned also another aspect because if you have a delivery then we have returns. How does it look in the Nordics? What are the politics and what are the typical behavior of the customers? Do they buy a lot and then return what they don’t need or they think more and just buy only things which they need and the returns are not common.
Henrik [00:20:41]:
How would you describe so about returns in the Nordic region? I think it’s pretty straightforward. You know, you receive, you pick up your parcel at a parcel point, a DHL accredited store or maybe in a parcel locker. You open up your box and the shirt is in the wrong color or it’s the wrong size or whatever. So the return is pretty simple. Most consumers in the Nordic region expect a return label. They do expect free returns. It’s a real pain in the back for a lot of e commerce companies, but I think that’s an entry requirement that you can make the returns as smooth as possible. I also think that this is where a lot of foreign e commerce companies maybe underestimate the value of being quick. So being quick with that, I mean that you get a shirt in medium and it was supposed to be small. A quick process where your goods are not stuck in a storage facility somewhere in Germany or somewhere in, I don’t know, Lithuania or where else is really key to getting, you know, your five star rating. I got the wrong shirt, they returned it and I had a new shirt in three days. That is the key to actually winning, winning the maybe not loyalty, but at least winning some trust of the local customers. Then you had another question which I think is interesting. Consumers that return more buy more. Now that is not something I’ve invented. That is companies like Solando and Amazon and other really big players, Allegro, they realize that consumers that return more tend to buy more. So solando parties were 10, mostly it’s girls, but maybe guys as well. But 10 people get together, order tons of stuff on Solando, get them delivered to an address and then they have a party where they try on dresses and shirts and shoes and whatnot, and whatever they don’t like, they just return. That is not uncommon. I would say it’s not a, it’s not a big trend or anything, but the people that have easy access to returns, you are on the right track of maybe gaining. I’m not saying you can gain a loyal customer, but I’m saying you can definitely have a more smooth process that would maybe, maybe get the customer to return again in the future. So I don’t think we have obscene return rates in the Nordics like you have in Germany. It’s not like we, we work with a 60, 70% return rate. Most companies in the Nordics do not have that kind of return rates unless they do business with the German market. That is. So I would say returning is pretty, pretty standard.
Radosław [00:23:47]:
Yeah, you mentioned that this, free returns are preferred. Yeah. So it’s worth noting down because, yes, this aspect is right now analyzed globally that a lot of, especially in the fashion sector, a lot of people are buying, returning from time to time. Those clothes which are returned are not good for another selling, so they need to be destroyed and so on. We have also the ecological problem. So that’s why I’ve read the reports that some companies are deciding to make this returning process a little bit more complicated or even paid. But tell me, what are the typical conditions of the return? Because in Poland you have it defined by the rules. You have 14 days that you can return the goods. Of course, some shops are making their own rules and you have 30 days, 60 days, or like IKEA, for example, one year. Yeah, but are there some kind of regulation saying that it has to be at least this and these days, how would you describe this?
Henrik [00:25:03]:
It’s the same since, you know, since. Since the Nordic countries also adhere, they also apply to the European regulation for, for, for distance trade. So exactly as you said, Radek, there are, there is a stipulated date of 14 days, which is mandatory. Most companies tend to extend that, that warranty simply because, you know, we trust in our product. So you can return it within a month or two months or whatever. So there is a minimum which you have to apply to. And then, you know, there’s room to be creative and maybe win some new customers by saying what I just said, that we trust in our product and if you don’t like it, you can return it within maybe a year. I think IKEA is probably an exception here, but it’s definitely something to consider because that is an entry barrier. If you have, you know, you are A known name brand entering a new market. Consumers tend to be careful. And if you offer good conditions, whether it’s payment or logistics, return or a guarantee, you are in a better position. Definitely.
Radosław [00:26:22]:
Yeah. I mentioned this legal aspects and so I will skip to another question which I had prepared is about the legal aspects which should be considered by a company which is planning to go into the Nordics. Are there any specific rules or any specific topics they should focus on or consider while planning going to Nordics? How would you say?
Henrik [00:26:56]:
I would say again, European regulations apply. We obviously work with a lot of companies that are entering Germany. And if I should rank in terms of maybe complexity or how careful should you be? Of course you should always adhere to the regulation. But Germany is far more complex in the sense in terms of regulations and things you need to consider than any countries in the Nordic region. And even I would even include Norway here because even though Norway is outside of the European Union, you don’t have to be afraid of actually selling goods to Norway. And remember you have Norwegian end customers that have their. I’m exaggerating now, but they have their pockets full of money just waiting to spend on interesting products or services online because the Norwegian market is limited. So the Norwegians are not afraid of buying outside of Norway. Those companies that I’ve realized that they have a really, some of them have a really good business selling into Norway and the cross border into Norway is not that complicated as it used to be. So again, you know, standing advice, rule of thumb, as somebody who knows.
Radosław [00:28:14]:
Yeah, this was. I was supposed to ask that Norway is not in a European Union but as far as I’m concerned most of rules applies also there. Yeah. So you confirmed that if you are pretty aware of European rules then Norway will not surprise in any a particular aspect that oh, remember that you are going to nowhere. You need to remember that this, this, this and this. How would you say?
Henrik [00:28:46]:
I would, I would agree with the exception that you are. You are entering a country outside of the European Union. But then again I would say European E commerce companies, they’ve been selling goods to the UK for many years. Some of them has also been selling goods to Norway for many years. But again, if you look at it from a helicopter perspective, the European regulations apply for all countries in Europe. So that as a framework is your starting point. What I also tend to say is, well, that’s good. But what are the unexpected regulations? What are the unexpected things that a local consumer is actually looking for? And that is important because the legal mumbo jumbo from Europe, that’s fine. But if everybody in your line of business is offering 30 days guarantee or is offering free returns or everybody is having something else, then clearly you will stand out and be in a worse shape if you only apply what you know of in Europe. So there are some twists locally and I think that makes my job fun as well because we know what those details are.
Radosław [00:30:10]:
Okay, so while you are working with the customers, you go dive deeper because I suppose they are specific for industry. So in this industry everybody knows about the alcohol limitation in the Scandinavia. So probably this is one of the areas and one of the example which all know. But I suppose that there are also others.
Henrik [00:30:37]:
Yes, there could well be. You know, depending on the products or the services that you are considering offering to Nordic consumers, there may be specific regulation. You know, there are material regulation in France and in Germany, how you should take care of the boxes or the palings or whatever. So I think it’s always worth checking that out so you don’t get any surprises late in a launch or late when you work with a new market. I consider that basic homework, to be honest with you. But you know what, between you and I and the listeners of this podcast, a lot of companies are actually not doing their proper homework and this cost them more time and money at the end.
Radosław [00:31:24]:
Yeah, we’ll get to there further because I have also question but right now I’m glad that you mentioned Helicopter View because this was also one of my further questions because we went a little bit into the details discussing all the aspects. But I would like to ask you a little bit more general questions. What are the biggest E commerce trends right now in Scandinavia? How would you. How.
Henrik [00:31:53]:
I guess it’s a great question and you could have tons of different answers. So bear with me when I, when I answer that question. I am answering that question from, from where I am standing right now, which is in Stockholm, in Sweden. I think the general trends are that you have seen Nordic consumers, they do spend a lot online now in comparison with European consumers. The Nordic countries are always ranked at the very top. So there’s a lot of spending online because it’s convenient, because you have tons of other things you need to do. So consumers spend online due to war, due to high interest rates. A year back the electricity was very costly for households. Spending has plateaued out. So spending is not as much as there was, you know, in the heydays around Corona. But it’s still at a very high level. Certain industries are still growing. But like in any other country where you had Corona, which was everywhere in Europe, you saw some fantastic years and then you saw a downturn and then you see a slow growth again. So an honest answer would be that the market is actually picking up again. Another megatrend is like it is in many countries in Western Europe that you have Chinese marketplaces stealing. I would say stealing is maybe the wrong word, but definitely impacting the local industry, I am sure. Well, as far as I know, actually Poland is one of the exceptions because you have such a strong player in Allegro that the Poles love and they buy at Allegro several times a week. So maybe the Chinese marketplaces are not as dominant as they are. But I think, you know what you can learn from this, and this is interesting, is that consumers are, when you ask is the environment important for you? Is sustainability important for you? Is it important for you to buy a product of high quality? What do they all say? Ah, yes, yes, yes, yes, yes. All of them say yes when you ask them directly. But their wallets, they say something else. So you have seen an increase in Chinese products flooding over the borders to the Nordic region. And I wouldn’t highlight this as a problem because if you are an e commerce company, it could be one based in Poland listening to this and you are producing high quality products. There is always a market, there’s always consumers willing to buy it. And some of those consumers are thinking sustainable, they are thinking about the environment. We have new generations coming up, not older generations like me, but the newer generations. For them this is, you know, I don’t buy from China because why should I buy a shirt from China when I can buy it from the corner store down here? So I think it’s one of the megatrends that a lot of local companies will need to looked at marketing. If AdWords and your CEO work, SEO work is six times more expensive. How do you compete? How do you compete with big wallets from China that buy any single search word that you can come up with? So I think the landscape is changing. That said, some of the best e commerce companies that we work with, they have diversified their business so they sell to several or many countries because you have different seasons, you have different, you know, some countries are doing really well and some countries are doing not so well so you can balance it out. So I think that would probably be my. That’s a long answer to a short question, but it’s very. There are a lot of different angles here. Consumers are positive, they are spending money and they are buying high quality products and some of them for Them, you know, sustainability is really important in the process.
Radosław [00:36:22]:
Yeah, this, this trend is also here. But as you mentioned, Allegro has a quiet position. And if you dig deeply, you can see that on Allegro also are being sold the products from China. But the distinction is that if you buy from, for example, AliExpress or Temu, the delivery time is 30, 50 days and those on Allegro have it right away because they bought it earlier. Yeah. So the price is, for example, higher. But also we see this trend which you mentioned. Yeah. That the awareness is growing and people like to buy something which is made in Poland, made here, and even pay for that more. But unfortunately, I say unfortunately because I’m not a big fan of this big China marketplace. There are still a lot of people which are thinking with their wallets, as you said, buy something which is here, but it’s expensive and I can buy it from China. I buy it from China.
Henrik [00:37:24]:
Yeah.
Radosław [00:37:26]:
So closing this general helicopter view, if I ask you name three most important characteristics of the Nordic market, what would it be in your opinion?
Henrik [00:37:44]:
I think number one, and maybe it’s not specifically for the Nordics, but I think, you know, consumers like transparency. So they want you to be honest with your pricing, they want you to be honest with your return terms. They want to know how to get a hold of you, you know, can I ring Vladek, Can I get somebody on the phone that can help me or can I get a quick answer to my question via working chatbot or whatnot? So transparency is one thing I think is for all of the Nordic countries. The second sounds a bit like a cliche, but for companies that are producing or selling products of quality, there is always a market. So curiosity among the Nordic consumers, there’s a lot of stuff they can find, you know, in their local web shops. Having said that, there’s always room for reaching consumers that are on the lookout for stuff they didn’t know they were looking for. So I think there are some great examples of already now, you know, some really good Polish brands making it outside of Poland and finally expenditure. You know, Nordic consumers, they spend a lot, they like to buy online. We talked about a cashless society. So we have. It’s years ago when we were worried about our payment online. Is this going to be safe now? Will they take my money and run? We are way beyond that. So now smarter companies, they understand that it’s about logistics, transparency, price. Right. Etc. So I think maybe that’s three, Daddy. But I think I could mention probably more. But bottom line is I don’t think the Northerners are very, very different from your average Polish consumer. And I honestly, you know, I could say that for another 50 countries in Europe, I don’t think we are that different. I’ve lived in some of the countries and I certainly, I cannot tell the differences.
Radosław [00:39:56]:
Well, it’s, it’s a good way because it’s not so difficult to adjust the strategy. Yeah. So if you are saying that the trends in general are so same, so it’s not as difficult as it might look because, you know, Nordic countries are perceived as a little bit hermetic. Yeah, I’m saying about stereotypes. Yeah. That they are. They like to buy from Nordic companies, Swedish from Sweden and so on and so on. So it’s good to hear that it’s not that grave problem. That’s as a. Stereotypes. Yeah. People are creating stereotypes on the basis of their own feelings and what they experienced. But if you are saying that in general it’s more universal, that’s a good news.
Henrik [00:40:49]:
Yeah, maybe I’m deviating off, of course here, but I think just a quick comment that some of the Polish e commerce companies and brands that I’ve been talking to, I think it may also be a question about generation. Some of these companies are now being run by younger management and for them they see no limitations. I know there are a lot of Poles, there are over 38 million polls, so that in itself is a big market. But I see more and more brands actually expanding to the Baltics and once they’ve done that, they say, well, why don’t we go to Sweden as well? That’s not far away. Maybe we can sell our products in Sweden for, for double what we sell them for in Lithuania. And I think, you know, that is actually this bridge building between countries where, where Polish e commerce brands have expanded to is changing. In the days, years ago, Polish companies would go to Germany and they would say, whoa, whoa, whoa, whoa, whoa, this was complicated. Let’s go back and not go to Germany because we didn’t make any money or there was an Amazon or for whatever reason. So I see more and more Polish brands actually saying, well, maybe we shouldn’t go to the same place that everybody else on the planet is expanding to in Germany. Maybe we should consider the Nordic region. They have more money, they spend online and we can easily reach them from Poland. So that is actually changing. That was my point.
Radosław [00:42:21]:
Yeah. Great to hear. And you mentioned about the profile of the entrepreneur, but how would you describe the customer profile? Typical customer profile in Nordics. And can we say about one Profile, I mean Nordic profile. Shall we look at it as four different profiles? Yeah. So Danish customer, Swedish customer, Norwegian customer and so on.
Henrik [00:42:50]:
I read this interesting analysis where you were comparing, I think you were comparing a 16 year old person in 15 different countries in Europe. And you know what, they listen to the same music, they use the same social media channels, it’s the same kind of clothing they’re wearing, it’s the same post as on the walls. Honestly, there are no differences. So I think if, if you, if you look at, at of course you wouldn’t find somebody in the streets of Norway saying, so do you feel like a Norwegian or do you feel like a. You would always have a bit of national pride. But the bottom line is that we as consumers, Whether you are 62 or you are 19, you have a way of shopping online that is similar to the countries you live nearby. So a 19 year old Swede have the same kind of shopping pattern. I would claim this is my personal opinion that somebody living in Denmark at the same age, I don’t think it’s right to talk about a Nordic profile because you know, apart from preferences and style, if it’s clothing you buy or it’s interior design, of course there are variations. Of course what you sell to a household in France may be different to what you sell in an ikea. White painted, you know, white painted house, it may be different. But apart from that I don’t think there are massive differences. It’s the same kind of channels where you reach your consumers and you have to try it out instead of analyzing yourself to death. I would much rather help companies actually getting started so they have their first company customers, they have their first orders, they get the question in customer service and then the customer services are, is a gold mine to your improvements.
Radosław [00:44:51]:
Yeah, you move to the next point which I also have. So we are going direct to this expansion. So I am a company, I come to you, I say I want to go to the Nordics in general or in any specific country. What would you say would be the biggest challenges or where I should anticipate the biggest costs?
Henrik [00:45:14]:
Well, for a company based in Poland, I would say depending on what you sell, you know, is your product likely to come back or is it a lightweight, low cost product that is really suitable for E commerce, then maybe you wouldn’t have that many returns. So if you came to me like you just described, I would bombard you with a few questions. You know, what are you selling? Who are your target groups? Are you going to be profitable? Have you Looked at your competitors, what is it that makes your company unique? Whatever you sell, there’s probably somebody else selling something similar or something identical. So I think the key point here is uniqueness. You know, give me a unique story, give me a unique brand. I don’t think you maybe have a unique product. We don’t see a lot of those. You know, they don’t fall down from the sky, something we’ve never heard of before. But I think the uniqueness is one of the keys to actually entering a new market. And then of course, in a good roadmap, there would be something around translations, there would be something about payments, logistical setup, your platform, currency, things like that is relevant to know for, for Polish companies expanding into the Nordics. But then again, this was much more difficult 10 years ago. It’s never been as easy to launch abroad than it is now. However, the competition has also increased. So it’s easy to launch a webshop that you can do in a day, but to actually find your first customer, your tenth customer and your customer number, thousand, that’s going to be the challenge.
Radosław [00:47:08]:
Yeah, I suppose, because I represent the technology company. So we know that technology wise, it’s not so difficult right now, as you mentioned, opening the shop and so on. So good to hear that you as makes you local and in general can help people to find their uniqueness and to get there in the right way. But you also mentioned that a few questions ago that instead of doing very complicated analysis, just start, I just go there, just expand and just see what the result will be. So if I did that, what should I perceive as a red flag, as the first red flags during this, during this expansion? What should give me the feeling that I need to change something?
Henrik [00:48:11]:
That’s a good, very good question. And I’m thinking of some of the projects, some of the brands that we have, we have been working with. There are two groups here. There’s a group of brands saying, now we need to check it out, we need to investigate, we need to be careful here because there are local players. We need to look at prices, we need to look at how they market themselves, how they talk to their customers. Analysis, right? So we need to that country by country, we cannot rush things. That’s group number one. Group number two, they say, screw it, let’s just do a campaign on, I don’t know, Facebook or Instagram. Let’s select 20 target groups. Say you can have, you can have 25% off this jacket when we launch in September. Sign up here, leave your email address. And sign up here. Then they will see that out of these 20 groups, it’s these four groups that are actually representing potential customers at this very early stage. They may not even have a product ready for the market yet. But they’ve been asking, they’ve been asking around saying, if we made this product, would you buy it? That is money they spent on checking out stuff. It doesn’t cost a lot and it certainly doesn’t cost a lot of work. It’s not, it’s not a six month project. So this group, I would say are actually the winners. Because what if market, if you launched in five markets simultaneously and you did it okay, it was, you know, reasonable, good, then you can always work on your fine tuning. I know I may be contradicting myself a little bit because some companies also like to do everything perfect before they launch. And then what happens? Well, somebody overtake them on the inside and you know, it’s never perfect. It’s always some iterations, it’s always improvements. So I have seen companies being really, having really speedy feats. You know, they are quick to adjust, they are quick to change. If for some reason yellow, yellow shirts in Finland, if that is what they like, then put yellow shirts on the front page. Don’t have red shirts like you have in Denmark. So I think it’s a lot of a b testing, you know, testing what works instead of analyzing yourself to death. Trying, Trying, Yeah, yeah, but that’s what, that’s what, you know, some of the most successful companies, that is what they’re doing. They are not, you know, they don’t see. There’s a really nice quote that I like and it’s something like this. Sometimes you win and sometimes you learn. They don’t talk about failures, they talk about learnings. Of course, if you blow 1 million, I don’t know, 1 million euros on a campaign and you didn’t get any sales, that’s a pretty tough blow. But if you are smart and you test a lot of different things, then you find two or three things in, I don’t know, in these channels that are actually working, then if that is working, you just scale it up and you do more of that and you skip all the other 17 ideas that are not working. And I think that’s a lot smarter, it’s a lot quicker. And if I was to start my company tomorrow, this is certainly the inspiration I would take with me from these successful brands.
Radosław [00:51:38]:
So the agile approach, not waiting for the big red flags and then do the action, but monitor and analyze the data. Day to day operations.
Henrik [00:51:51]:
Yeah. The red flags will come anyway. No matter how much you prepare, there will always be somebody hitting you over the next saying you shouldn’t have done this Radek or you forgot this or. And honestly, as I said, it’s never going to be perfect anyway. So while trying to make it perfect before you start, let your customers tell you what you need to improve or have big ears. So you actually listen to feedback.
Radosław [00:52:19]:
Yeah. And this is also one of my questions. You are saying about the feedback. Is it really important for Nordic customers, these customer reviews, the feedback on the products, how would you perceive this? Because right now we observing the mixed approach to this because we have a lot of fake comments, fake reviews. People are looking at them and are not sure if they are real or if they are reliable. How it is in the Nordics Also very good question.
Henrik [00:52:58]:
I think I’m not the expert here but I think there was a new regulation coming out from the European Union for not so long ago that you have to have verified reviews. We work a lot with both Trustpilot and our new entrant Lipscore, a Norwegian company and also with trusted shops in Germany. So I think, you know, the ones that you are mentioning with fake reviews, I think it’s slowly dying out. You know, review has to be a verified purchase. So unless there’s a verified purchase that you can connect to a review, then it’s not going to be displayed. So I think that’s, that’s part of the solution. The, the opportunity is obviously people don’t care what golf clubs Tiger woods is using or what swimming trunks that the best swimmer in the world are swimming with. They care about your neighbor or the guy from work, somebody else from Poland, what they thought about their purchase. So in the Nordics this is certainly very important that you display reviews. There are some really good companies doing, doing this, just that as a service. But I think it’s also about creating trust. And if you don’t have any reviews from any naughty customers, well, show some translated reviews from Polish customers or from German customers or wherever you have traction. We had a really good example of somebody working with somebody launched a brand. This managing director of the smaller company told mexylocal, I would like you to ring the first hundred new customers that I have, ring them and ask them a few questions. Hi, how did you find me? How was the purchase? Did you like the product? A mini survey. And you know, the value of such a survey was incredible. We saw reviews coming out on different review sites. The owner rang me, asked Me, if I was happy with the product, was I satisfied, was there something else we could have done? You know, nobody from Solando ever cared about me or nobody from Boost ever cared about me. So I think this can be done in a really smart way. But reviews, bottom line is equally important in the Nordic region.
Radosław [00:55:19]:
Yeah. And the biggest one, like Amazon or Zalando are also translating those reviews from time to time that you can verify the reviews from another countries. And I wanted to switch to the aspect of translation because this is a very sensible topic. We know that it can be done in many ways. And how would you suggest to approach while thinking about Nordics to focus on with these translations? How do you see it? What’s the common practice?
Henrik [00:55:59]:
Translations is obviously one of the big areas that we work with within MexoLocal and it’s incredibly exciting because technology, together with clever people, humans actually speaking the local language is just. It’s like rocket fuel on steroids. What we are seeing when, when a company or an e commerce company or brand approaches us, we always look at the content that needs to be translated. And you can have your simple product text or your simple descriptions and something similar, or you can have other content, your blog post or your post on Facebook in a certain tonality, you know, should you be using smileys or not? Should you never have a smiley or should you always have a smiley? You know, basic things like that. What I want to focus on here is technology is improving radically. Now. When you look at when a brand is going abroad or an E commerce company is going abroad, I always recommend translate your webshop to the local language. It’s not because, you know, the Danes and the Norwegians, they understand English, but they just prefer their local language. Simple as that. Shopify did an analysis two years ago and 79% of all consumers in the entire world, they prefer shopping in their own language. So don’t save money by not translating the content into the right language. Secondly, technology makes this a lot easier. So once you have the keywords nailed down, once you’ve done a proper analysis of the text material, you can actually utilize technology as well. So things that maybe took, I don’t know, 40 hours two years ago, maybe they take 10 hours today. So we see an incredibly fast development here. And it’s not only because of AI and machine learning. It’s the same systems, you know, it’s the same systems being offered to everybody. But the trick here is actually applying technology so it works for real. Are you with me? And there’s a difference you being a technology man, you certainly know that applying technology and understanding how it can be used in daily life is a big difference compared to just having a platform that can translate.
Radosław [00:58:35]:
So yeah, I didn’t want to interrupt you but I wanted to mention this quality of translation because we mentioned few times those Chinese big marketplaces, they don’t care. It can be seen that there’s some kind of algorithm translating the words and when you read it, it is in your local language. But, but when you read it, you see that machine has done it. Yeah. And it’s not grammatically correct. It even has different meaning from time to time because the word was not translating good. So I suppose that here you are also referring to the good made translation. Not just put it in the, I don’t know, some Google Translator or DeepL and put it on the website. But the verification is also very important.
Henrik [00:59:27]:
Exactly, exactly. And this is where human is combined with AI and machine learning. Where, where maybe some of your texts, maybe some of your content is more sensitive. You know, it’s if you have a visual product you’re selling, I don’t know, black running shoes, it’s a shoe, it’s black and size 42. And then obviously you have some other characteristics, but maybe, maybe that is in brackets less important than your legal text, than your return policy, things like that. So when we talk to companies, we always look at, you know, what is your ambition here? What do you work with a good enough level or are you, do you want this, you know, top notch? Top notch. Because everybody else locally is expected to have a top notch. And if you want to win the hearts of a Danish customer, you’re not going to do it with a semi good translation. It’s just going to look bad and it’s not going to create any kind of loyalty or me wanting to come back to your webshop another day.
Radosław [01:00:32]:
Yeah, I created the opportunity. But also AI can make errors. You have to remember.
Henrik [01:00:39]:
True. And we’re not exactly. And that’s a good point. It’s never perfect. So you will keep finding stuff on your website that is not perfect. The key here is obviously to look at the 20% of your web shop that makes 80% of the difference.
Radosław [01:00:58]:
Another aspect which I wanted to ask you, it was said a little bit, but I would like to come back. You mentioned about the promotion or you mentioned about how to reach the customers. How would you describe the most effective forms of promotion? How to get to the Nordic customers. What are the best ways?
Henrik [01:01:18]:
Yeah, I think it’s again it’s difficult to say this works for everybody because if you are selling, I don’t know if you’re selling running shoes or you are selling furnitures or bathroom mirrors. Maybe it’s different, maybe there are variations. But I see a lot of really powerful promotion in social media and that’s not only meta, Facebook and Instagram. I also see some, I see some brands not being afraid of testing different things, maybe competitions and things like that also linked to social media. You will never get around that. Search is important. It’s also important in the Nordic region, but I mentioned in the beginning that it’s a very, very expensive way. It’s impossible for any brand anywhere to compete with the pockets of Chinese marketplaces. So I see a lot of brands in the Nordics being forced to be creative in different ways, if that’s the right word. Email is really powerful. You know, if you don’t have an email list, start building one right now because you do have high open rates. You do have. If you, if you provide relevant content for your customers, they will sign up. Some of them will click and some of them will read and some of them will buy. But I still think that in these social media days, email is still maybe the most powerful channel to existing customers.
Radosław [01:03:00]:
But you are saying about newsletter or other forms of reaching them via email?
Henrik [01:03:08]:
Yeah, both really. I think if you open up your, if you open up your email inbox two, three weeks before Black Friday, you will have a zillion offers from companies you didn’t know you signed up for. They exist. So I think we, we as consumer, both you and I, Vardick, we are very selective. Maybe we have our hobbies. Maybe I like bicycling. I will open any newsletter that comes from Canyon and is talking about the newest bicycle with the newest feature. Anything else that is not, you know, relevant for me, I will just simply ditch and I will just block and I won’t read it. So I think you need, again, you need to be relevant. But you can be relevant in a newsletter. You can be relevant in an email. You can have your customer clubs. That’s been a big thing in Sweden. A lot of physical retailers that have also gone online, they have been really good at utilizing a customer club of several million people. So I think there are. You will never have an engaged conversation with all of your customers that have ever bought. But I think it’s a process of nurturing them, trying to find out and there are many tools for that, trying to find out what’s relevant for this customer. What do they like.
Radosław [01:04:30]:
By club, you mean the loyal program. Yeah.
Henrik [01:04:34]:
Yeah, I think that’s another discussion. But I don’t think a loyal e commerce customer exists. I don’t think you’re loyal. I don’t think brands can talk about a loyal customer. You can create foundations for the customer to come back, but if this company has a better offer than that company, you know, I’m not loyal to you. I buy whatever I feel for the day. So I think maybe we should be a little bit careful talking about loyalty and discounts and things like that. Consumers are smart. You know, they like transparency and I like honest companies. The moment you screw up as a company, you are f. Yeah.
Radosław [01:05:18]:
And this goes really quick into the web. Yeah. So happy customer leaves the comment occasionally, but unhappy customer writes everywhere. Yeah. That this company sucks and don’t buy from them. Yeah. So this is also aspect we need to take under consideration.
Henrik [01:05:38]:
I couldn’t have said it better. You know, this is exactly. You know, when. When you have a negative review on your review site, smart companies reply to that. Smart companies avoid a long discussion. But, you know, unhappy customers always have a bigger mouth than happy customers. Yeah.
Radosław [01:05:58]:
And you mentioned Black Friday. Are there any other seasonal events that need to be considered while talking in the Nordics so the customer owners can anticipate the higher income and prepare themselves that, for example, there will be more customers these days? How it looks like in the Nordics?
Henrik [01:06:24]:
Well, we’ve been doing this for quite some years now. A little over 13, 14 years. So we’ve actually, a couple of years back, we got that question all the time. And now, trying to be smart, what are the days that we should be aware of? Is Christmas celebrated at the same time? When do Swedes get paid? When do they get paid in Denmark? All of that we put into what we call. We call it an annual wheel. So if there are listeners of the podcast that are interested, I need to know what’s going on in Denmark or in Sweden. They should just reach out because we compiled all of that and that’s completely free of charge. So, yes, there are lots of days. The cinnamon bun day in Sweden. There are a lot of days where you think these are some smart people that have come up with a day of celebrating a bun or celebrating, I don’t know, a waffle or something else. So there are a lot of days, irrespective of countries. Yeah.
Radosław [01:07:25]:
And especially that while I was talking with your colleagues from other countries during the networking or something like that, they mentioned that even so big days like, for example, Valentine Day or Black Friday can differ in different countries. Yeah. So when everyone in the world has Black Friday, some country has it in a different day. Is it the same in Norway that in Nordics that they, they have their own shopping peaks for some reason specific to the region?
Henrik [01:08:04]:
I think if you look at, if you look at the e commerce year starting from the 1st of January, finishing off the 31st of December, the Nordic region has the same. We have Black Friday, we have, we even celebrate singles day. We have the rush around Christmas. Obviously there’s some, I would say American Asian adaptation. So you try to find any excuse you can for selling your goods. Maybe spending a bit more on marketing, blasting out the message that now it’s so and so Cyber Monday. You know, there are, there are the same peaks. The difference here is all other days that are not Black Friday and Christmas sales. You know, there are some specific days that you really should know about which is great opportunities. Maybe if you’re selling, I don’t know, if you’re selling skiing equipment for instance, then it’s good to know that there are most years there is a three week difference between when the Danes are on holidays or winter holidays versus when the Swedes are on holidays during their winter scheme. And if you do your campaign three weeks later when all the Danes are back from their holidays, you’re not going to sell a lot of skis, are you? So just a tiny blunder like that makes a big difference. So when people get paid, when they have the holidays, when it’s Black Friday, things like that, you just need to know that is basic homework.
Radosław [01:09:32]:
Yeah, this is very interesting. So last question, you partially answered it, but I would dig a little bit more into that. How does those, I would say global events like pandemic or war in Ukraine affect the market in the Nordics? Is it noticeable? Probably pandemic, yes. But the war and its own, how does it affect?
Henrik [01:10:05]:
Well, first of all, if we take the first part of your question with the pandemic, Sweden was an exception in the world. I think there was two other three countries in the world where everything wasn’t closed down. Sweden stayed relatively open. It was a huge, huge boost for online e commerce because obviously a lot of the stores they had to close, you were not allowed to enter them. But some cafes were open and some gyms were open, etc. So that was a massive boost for all e commerce companies in all countries. Now, how does war affect other people? The world is a dangerous place to live in. The war affects in terms of higher Costs, challenges getting your goods from A to B, the cost of production increases. So obviously that is a problem for the E commerce companies. Their goods are bound to be more expensive for the consumers. What we see is uncertainty. We see people prepping in their basements, buying different products, you know, buying blankets and gas and big water bottles and things like that. But honestly, and it’s a bit sad to say it, but the war is in Ukraine. It’s not in Sweden, it’s not in Norway, it’s not in Denmark. I think Finns are much more engaged in thinking about the war and a potential threat from Russia. Now we’re diving into politics and we shouldn’t go there. I think the war obviously is in the back of our minds in the Nordic region. But, you know, if the rent goes through the roof or the electricity becomes 10 times more expensive, you know, you are right here. This is what you, you know, that’s a bigger problem than people fighting in other parts of the world. It does affect. It does affect. And we do see some E commerce companies going through some rough times. So obviously it affects us and the Nordics, like any other country in Europe, I would say. Yeah.
Radosław [01:12:20]:
I was curious because naturally in Poland. Yeah, we feel it. Yeah. Because Ukraine is our neighbor, so we can say that the war is next door. Yeah. And as you mentioned, yes, we. Then Norway, Denmark is far away from there. Not so far away, but more far away than Poland. Yeah. So I was wondering if it’s some kind of feeling that it might happen to us. Shall we prepare for that? These buying habits, as you mentioned, so preparers and so on. So, yeah, this is something also to be considerate of while entering this market.
Henrik [01:13:00]:
We actually have a Danish brand that we are working with selling equipment for preppers or for military use. And they, you know, also they’ve seen a massive boost in Poland for private consumers, you know, stocking up. I wouldn’t, you know, you cannot stand here and say that we are, you know, in any way ignoring it. Sweden is part of NATO now. That’s because Sweden and the Swedish government was worried that you would have no friends in case the enemy would be knocking on your door. So of course it is on the minds of people living here. But the further away you get from, you know, the real volcano, the less you tend to think about it. And it’s really sad to see and say that, you know, it’s become, it’s become a bit of news in your newspaper, like there’s a war in Israel, there’s a war in Ukraine. There are lots of places on the planet where we don’t hear about it. We don’t care because we don’t know.
Radosław [01:14:04]:
Yeah, I suppose. Okay Henrik, thanks a lot. We finished with the very tough topic but I hope the general content we gave here was very fruitful and interesting for our listeners and viewers of course in in the description there will be contact data for for to make you local and to media for you. So if you have if your listeners have a questions or would like to know more, please contact us. As Henrik mentioned, each time the individual conversation helps a lot more while planning the expansion and stay with us. This is our first podcast but we are planning more so see you in the next time. Henrik, thanks a lot again. Really nice to have you here and have a nice day.
Henrik [01:15:01]:
Same to you Radek and thank you very much for having me. Bye.
