2019 J.P. Morgan Global Payment Trends
E-commerce Payments Trends: Denmark
Denmark e-commerce insights
Denmark’s innovative approach to online payment security, high use of digital payments and an increasingly outward-looking consumer base make it a highly-developed e-commerce nation and certainly one to consider for overseas e-commerce merchants.
To help our clients locate, attract and keep their customers, we have tracked and assessed e-commerce developments in 34 mature and emerging markets around the globe.
E-commerce market characterised by projected mobile-commerce growth
Economic growth in Denmark is being driven by private consumption, while rising employment rates are boosting disposable income.1 This bodes well for the e-commerce sector, which is forecast to grow at double-digit rates over the next three years, driven by mobile commerce and Denmark’s position as one of the leading users of smartphones in Europe.2
E-commerce boosted by a nation of high spenders buying from overseas
Denmark’s business to consumer e-commerce value stands at €15.4 billion,17 which accounts for a 2.9 percent slice of the total European e-commerce sector.*18 While it is a small market, Denmark nevertheless stands out for consistently posting double-digit e-commerce growth in recent years.19
It is also notable for being a nation of high spenders, with Danes spending over 50 percent more online each year than the average European – €3,345 versus €2,186.20 Basket spend is boosted by high-ticket travel expenses such as flights and holidays being among the most popular items to buy online, with 73 percent of all online shoppers spending in this segment.21
Danish shoppers enjoy wide access to high-speed internet, so e-commerce merchants can offer high-functionality sites with strong product imagery, video and multiple interfaces without fear of poor loading speeds. Denmark has one of the highest broadband penetration rates in the world and a progressive regulatory regime that has helped boost access to fiber networks.22 Usage is also growing. In 2017, 91 percent of Danes accessed the internet on a daily basis, compared with 89 percent in 2016.23
High internet penetration
Improved internet access should help the e-commerce market to expand at its expected compound annual growth rate of 10.5 percent up to 2021.24 Pure-play e-commerce merchants are better positioned than physical retailers trying to take a share of this growth as they now occupy more than 50 percent of the Danish e-commerce market, despite domestic omni-channel retailers investing in their e-commerce channels.25
Denmark’s e-commerce market is also showing signs of change in the increasingly outward-looking nature of its shoppers. International e-commerce merchants are swiftly gaining ground on Scandinavian businesses, which previously dominated sales. Since entering the country in 2010, German fashion platform Zalando has risen to become the most-used e-commerce site in the country and in 2017, overtook former favorite, Swedish electronics firm, Elgiganten.26 These stores’ offerings are indicative of where Danish consumer interest lies: clothing and footwear is among the most popular shopping categories online, as are electronics.27
Consumers demand quick delivery times
Growing demand for electronics may be supporting high numbers of Danish shoppers purchasing online from China, with Chinese sites the most-visited international shopping destinations.28 China is known for its low prices on small electronic items.29 Danes are also increasingly buying large home products online – usually from European e-commerce merchants – and customers expect an easy online shopping process for such items. They also want add-ons, such as installation and assembly of purchases, to be offered as part of the online shopping process, wherever the product is ordered from.30
Like other Nordic countries, Denmark’s small size and a strong presence of major logistics companies and fulfilment centers means delivery speeds are good. One in 10 shoppers expects delivery the following business day, but the majority of Danish shoppers say delivery within three days is acceptable.31 Expectations might evolve as the largest players begin to speed up distribution. Zalando has an exclusive logistics contract with PostNord for deliveries to Denmark. In 2018, the duo announced plans to offer free pick-up of returns within an hour from the customer’s delivery point.32
Free returns are important to 80 percent of Danish online shoppers, with 10 percent having returned a product in the past month when interviewed.33 In fact, an estimated 12 percent of goods purchased online are ultimately returned across all segments. This could pose a significant cost to international e-commerce merchants.34
High smartphone usage encourages mobile-commerce35
Denmark has the highest smartphone penetration of all European countries included in our report series,* at 78.2 percent.36 The Danish mobile commerce market is worth €4.9 billion,37 but only 32 percent of sales are completed on a mobile device at present,38 suggesting shoppers still associate e-commerce with desktops. As merchants increasingly close the gap between smartphone ownership and smartphone e-commerce, growth in the sector is poised to accelerate, expanding at an expected compound annual growth rate of 16.8 percent39 to become a €9.1 billion market by 2021.40
Bearing this potential growth in mind, offering e-commerce sites optimized for smartphones is recommended. This can also help capture impulse purchases, which are common in Denmark, via smartphone. For example, common reasons cited for opting to use a smartphone to make a purchase include it being the nearest available shopping device at the desired point of purchase, being on an app at the point of buying, or opening up an offer in a smartphone email and following through on this to complete the purchase.41
As in neighboring Sweden, Wish is the most popular shopping app.42 Unlike other European countries in this study where platform sites dominate, in Denmark they jostle for position with apps from individual e-commerce merchants. H&M, for example, is a popular app, but eBay has never made a strong impact.43
Domestic cards most popular payment method
Danes are among the highest card users in the EU. With this payment method accounting for 63.4 percent of online transactions and €9.8 billion of sales,44 they are without doubt the payment method of choice in Denmark.45 Debit cards, at 1.26 cards per capita,46 enjoy a far higher usage than credit cards, which have ownership of only 0.31 per capita.47
The ubiquity of debit cards can be explained by the long-standing popularity of Dankort, a domestic bank-based payment card launched in 1983. The card is commonly co-branded with Visa®, offering international payment capabilities. Strong card use means online card payments are expected to continue to grow at an 18 percent compound annual growth rate up to 2021.48 By that point, they will take a 65.7 percent share of the payment market.49
Digital wallet use in e-commerce grows
Digital wallets, while accounting for a smaller share of the market (20.5 percent),50 are also in growth. Their use is expected to expand at a compound annual growth rate of 19.5 percent up to 2021,51 slightly faster than cards.
One particularly popular local payment app is MobilePay, which launched in Denmark in 2013 and takes a seven to nine percent share of the additional payments space.52 It has grown rapidly and is now used by more than 60 percent of Danes and more than 180 million transactions are processed each year.53 MobilePay is hosted by Danske Bank, and the majority of the Danish banking sector participates in the scheme.54 PayPal® also occupies a significant amount of the digital wallet space, taking a 10-12 percent market share.55
Unsurprisingly, for a card-based society, online cash use is low, at 1.3 percent.56 Bank transfers are also a relatively unused e-commerce payment option, accounting for 10 percent of sales,57 and their use is predicted to decline to represent just 7.6 percent of the payment market by 2021.58
Government scheme engenders trust online
Danish authorities have worked hard to counter fraud in recent years. Measures include national schemes to provide additional customer verification when spending online. Denmark has also improved levels of trust in digital payments by integrating the country’s longstanding Centrale Personregister social security number scheme into online transactions.
The Centrale Personregister is a unique ID number given to all Danish residents since 1968. It is operated by the Ministry of the Interior and is used by residents in all dealings with the public sector. In 2010, a digital signature was launched called NemID, which uses an individual’s Centrale Personregister number in private transactions as well. The number is now used as the standard sign-in identification for digital wallets and online banking across Denmark. An updated version called MitID is being developed as a public–private partnership.59
According to data from Kount, the chargeback rate for e-commerce transactions in European markets has fallen from 0.09 percent in 2017 to 0.06 percent in 2018. This makes a three-year trend of decline after 2016 chargebacks stood at 0.14 percent.60 These improvements are also reflected in the Danish market.
Key takeaways
- Denmark’s business to consumer e-commerce value stands at €15.4 billion,61 which accounts for a 2.9 percent slice of the total European e-commerce sector62
- It has the highest smartphone penetration of all European countries included in our report series,* at 78.2 percent63
- Danes are also among the highest card users in the EU, with this payment method accounting for 63.4 percent of online transactions64
To learn more about payment trends in the world’s leading e-commerce markets, contact your J.P. Morgan representative or call us on:
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E-commerce Payments Trends
International e-commerce success can hinge upon understanding the needs, nuances and growth patterns of individual nations. J.P. Morgan’s E-commerce Payments Trends aims to offer merchants the knowledge they need for global success through in-depth, country-by-country analysis.
1 European Commission. ‘Autumn 2018 Economic Forecast.’ Accessed November 2018.
2 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
3 European Commission, ‘Autumn 2018 Economic Forecast.’ Accessed November 2018.
4 Financial Times, ‘Patent payout boosts Danish growth to strongest in 11 years.’ Accessed November 2018.
5 European Commission, ‘Winter 2019 Economic Forecast.’ Accessed November 2018.
6 European Commission, ‘Autumn 2018 Economic Forecast.’ Accessed November 2018.
7 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.
8 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via CIA, 2017.
9 World Bank Open Data. ‘Denmark.’ Accessed December 2018.
10 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
11 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
12 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Internet World Stats, 2017.
14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2018.
15J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.
16 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.
17 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
18 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
19 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
20 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
21 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, via Eurostat, 2017.
22 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, via Eurostat, 2017.
23 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Internet Live Stats (2015 & 2016) and Internet World Stats (2017).
24 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
25 Euromonitor.com, February 2018. ‘Internet Retailing in Denmark.’ Accessed November 2018.
26 Euromonitor.com, February 2018. ‘Internet Retailing in Denmark.’ Accessed November 2018.
27 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
28 IPC, Cross-Border E-Commerce Shopper Survey 2017, 2018.
29 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
30 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
31 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
32 E-commercenews.eu, September 2018. ‘PostNord and Zalando continue their logistics partnership.’ Accessed November 2018.
33 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
34 Postnord.com. ‘E-commerce in the Nordics 2017.’ Accessed November 2018.
35 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
36 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2018.
37 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
38 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
39 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
41 E-Commerce Foundation, Denmark E-commerce Country Report 2017, 2017.
42 E-Commerce Foundation, Denmark E-commerce Country Report 2017, 2017.
43 E-Commerce Foundation, Denmark E-commerce Country Report 2017, 2017.
44 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
45 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
46 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.
47 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.
48 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
49 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
50 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
51 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
52 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
53 Europeanpaymentscouncil.eu, October 2017. ‘The Danish payment landscape: When instant becomes the new normal.’ Accessed November 2018.
54 Europeanpaymentscouncil.eu, October 2017. ‘The Danish payment landscape: When instant becomes the new normal.’ Accessed November 2018.
55 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
56 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
57 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
58 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
59 Europeanpaymentscouncil.eu, October 2017. ‘The Danish payment landscape: When instant becomes the new normal.’ Accessed November 2018.
60 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Kount, 2018.
61 FDIH, e-handelsanalyse Arsrapport 2017, 2018.
62 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
63 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista, 2018
64 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.
About J.P. Morgan
J.P. Morgan offers a full suite of payments services to enable a seamless connection across the payments continuum for clients. We bring our consultative expertise, data-driven insights, and local service around the globe to provide a more unified view of payables, receivables and cash management. Merchant Services is the payment acceptance and merchant acquiring business of JPMorgan Chase & Co. (NYSE: JPM) – a global financial services firm with assets of $2.6 trillion and operations worldwide.i According to The Nilson Report, it is also the top merchant acquirer of e-commerce transactions in Europe.ii
i JPMorgan Chase & Co. Q4 2018 Earnings Report 2018.
ii The Nilson Report, #1132 May 2018.
This document is based on projected figures and is subject to change at any time. Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.
Information contained in this document has been prepared by third parties or obtained from sources which are believed to be reliable; but neither Chase Paymentech Europe Limited nor any of its affiliates warrant the completeness or accuracy of the information contained herein. Chase Paymentech Europe Limited and any of its affiliates shall have no liability to the user or to third parties, for the quality, accuracy, timeliness, or for any special, indirect, incidental or consequential damages which may be experienced because of the use of or reliance on the data or statements made available herein. Third party trademarks, brand names, products and services are only referential and Chase Paymentech Europe Limited and its affiliates disclaims any sponsorship, affiliation or endorsement of or by any such third party.
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