Swedish Post Pushes Its Lead in E-Commerce

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STOCKHOLM - The Swedish Post took the Internet plunge more than five years ago in anticipation of the coming e-commerce boom, according to Anders Asberg, the birector of Sweden Post's international partners.


"Our former board saw early on that our future would be determined online. That's why we started our Torget Web site so we could attract companies and have them generate parcel and letter distribution for us."


Mail volume in Sweden and in the rest of Scandinavia is still holding up, Asberg said, but conceded growth on the letter side was small. Parcel growth is bigger, but the rate of growth is not as fast as it was.


Business mail has begun to drop a bit but direct mail is increasing. "More companies are trying to reach more target groups and we think overall that DM is taking market share away from other marketing channels."


He said rapid growth of e-mail had been an early signal that business mail volumes would begin to sag and that something would have to be found to replace it. Private letters, he noted, are "quite stable" but only account for 8-10 percent of postal volume.


Sweden was also one of the first countries in Europe to privatize the postal service and to allow competition on all sectors - portals, Web sites and distribution.


"This is an open market and that drove us into the front ranks of e-commerce. We had to listen to our clients to stay on top of the market. Competition was good for us."


Curiously Sweden has only had home parcel delivery for a year or so. In the past, customers had to come to the post office to pick up their packages, something that is still done in China and other emerging markets.


Asberg said it would take the market a couple of years to complete home delivery, less so in the major cities where smaller competitors have taken packages door to door. But Sweden is a huge country - as long as the distance from Stockholm to Rome - so delivery often is not easy.


E-commerce has been the other driving force for boosting home delivery. As online buying has increased so has customer demand for product delivery into the home.


Sweden Post's grandest online attraction is Torget, a Web site that this year was turned from an information and chat room site into a shopping mall that has attracted hundreds of outlets.


"We're trying to attract companies to come and set up on Swedish Web sites, particularly German, American and British firms. We do mailings in the UK extolling our one stop marketing solutions.


"In Germany we cooperate with Deutsche Post. We identify potential German mail order companies that could do well on the Scandinavian market and Deutsche Post targets them for us and tries to persuade them to come to Scandinavia."


In the US, Sweden Post works closely with the Invest in Sweden Agency, one of the most active European investment agencies that has proved adept at attracting a broad range of US businesses to set up operations in Sweden.


Sweden Post works closely with other Scandinavian postal administrations - including that of Iceland, not usually considered part of Scandinavia - in the kind of network format that allows companies to test their products on the Scandinavian market in the most efficient way.


Although the Scandinavian market is wealthy and sophisticated, most mail order companies are still what Asberg calls "the old-fashioned kind. We have very few niche companies and those are the ones we are trying attract, both for e-commerce and mail order."


The Swedes help companies set up Web sites on Torget, handle the minimal amount of translation that is required, mostly in the payments system since Scandinavians can read enough English to understand product descriptions, and identify target groups.


Sweden still has one of the most open set of demographic records in Europe where direct marketers can tap into tax authority records for such information as income, housing and buying patterns.


That may change, however, once the EU's data protection directive becomes fully integrated into Swedish law.


Finally, Sweden and all of Scandinavia, Asberg said, is a good test market for e-commerce because of the high IT penetration. More than 50 percent of the population is on line. In addition the cost of access has been dropping. n
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