E-commerce is growing quickly in Latvia, providing great opportunities for international merchants wanting to expand their reach. Latvia’s e-commerce revenue was estimated to reach US$ 406M in 2021 with a projected market volume of US$ 503M by 2025. The volume of e-commerce for individuals in Latvia in 2020 has grown at a rate twice as great as the previous year, while in the corporate segment 300% more customers used card payment services online.
As of 2021, 90.8% of the country’s total adult population used the Internet every day. According to recent research data, 85% of the surveyed Latvian population made online purchases within the past year, with the most common purchases coming from fashion, electronics, and travel sectors. In the COVID-19 environment demand for e-commerce has increased dramatically with many customers preferring to shop online.
The increase in Latvian e-commerce, however, has brought out some of the issues that stagger the growth of online shopping. The lack of time to integrate fast and easy solutions alongside the shortfall of Local Payment Methods (LPMs) offered by Merchants and Payment Service Providers (PSPs) are challenges for further sustainable development in Latvia.
Nearly 50% of Baltic shoppers have a preference for paying through online banking, which has become the dominant payment method in the region. However, only around 17% of Latvians have a credit card. Instead, showing a preference for online banking payments, Latvian consumers often encounter difficulties paying with their favorite payment method, as most of the time, it’s not included as an option in the checkout process. This lack of the option to pay with a favored payment method results in an abandoned shopping cart—almost 60% of Europeans tend to leave their digital shopping cart if a favorite payment option is not there.