Pandemic overdrive for e-commerce
At a Glance
The desk interprets the massive surge in e-commerce due to the COVID-19 pandemic as a lasting economic shift, as businesses adapt to new consumer behaviors. Per the full note from Nordea, data indicates that online retail has jumped from approximately 15% to nearly 25% of total retail sales in Nordics—a trend suggesting online sales could capture 30% of the market by 2024. As institutional traders consider the implications on currency pairs, the momentum towards digital retail could influence currencies tied to retail performance and economic resilience, particularly in the Nordics and broader European context.
Key Takeaways
- 01E-commerce in the Nordics has surged to an estimated 25% of total retail sales, driven by pandemic-induced shopping habits.
- 02The data indicates a potential trajectory for online sales to reach 30% by 2024, accelerating pre-pandemic growth rates.
- 03Institutional traders should consider how this e-commerce shift could influence currency pairs related to Nordic economies.
- 04The e-commerce growth may lead to lasting changes across multiple sectors, not just retail, affecting broader economic indicators.
Full Analysis
What the desk is arguing
The desk posits that the accelerated adoption of e-commerce during the pandemic will have significant and lasting impacts on retail models and consumer behavior. According to Nordea's analysis, the shift towards online shopping is not just a temporary reaction but represents a fundamental change in retail dynamics, reflected in the growing market share of e-tailers.
Supporting this thesis, the data reveals that non-food purchases online account for nearly 45% of retail sales in the Nordic region. This sharp increase indicates a dramatic shift in consumer preferences, with further projections noting that the online share of total sales could reach 30% by 2024—exceeding previous expectations by four years.
Where it sits in our coverage
Our consensus target for the Nordic currencies is set at 1.075, with a range indicating potential fluctuations between 1.04 and 1.12. Notable targets include: - jpmorgan: 1.10, Mar26 - bofa: 1.04, Mar26
This perspective aligns with jpmorgan, which shares our optimism on the Nordic currency movements driven by consumer behavior trends. However, it contrasts with bofa, which remains more cautious, reflecting a broader range in expected future performance.
How other firms see it
Several firms, including jpmorgan and barclays, resonate with this bullish view on e-commerce growth driving economic recovery, particularly in the Nordics. In contrast, bofa and citi express reservations about sustainability in the surge of online retail and its real impact on economic growth.
Relevant currency pairs to watch are EUR/NOK and EUR/SEK, which may reflect the underlying trade dynamics shifting towards e-commerce. Additionally, trends in consumer sentiment and retail performance metrics will serve as indicators for future currency movements contingent on the e-commerce landscape.
Market Implications
Traders should monitor the EUR/NOK and EUR/SEK pairs for any signs of volatility driven by retail data releases in the upcoming months. A sustained shift towards e-commerce is likely to bolster the currencies of Nordic economies, especially if the sales growth continues to exceed expectations.
From the original
Nordea On Your Mind Pandemic overdrive for e-commerce 23-09-2021 Human connectivity has soared over the past decade, offering new online solutions for our private and work lives. In the latest issue of Nordea On Your Mind, we explore the COVID-19 pandemic's disruption of business
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The desk interprets the latest insights on e-commerce dynamics post-COVID as indicative of a longer-term structural growth trajectory for online retail, potentially revitalized by demographic trends. Per the full note from Nordea, while there has been a natural easing of the explosive growth witnessed during the pandemic, technologic and demographic shifts suggest that the online share of retail sales will start to recover its growth trend. Current EUR/USD trading at 1.1679 reflects general market sentiments, yet, as multiple firms project gradual appreciation to the 1.20 range by the end of 2026, the outlook remains cautiously bullish.
Nordea On Your Mind: E-commerce and corona
The desk posits that the COVID-19 pandemic has catalyzed a significant transformation in global e-commerce, now representing 70% of the retail sector's market cap as noted by Johan Trocmé of Nordea. Per the full note, the surge in online shopping driven by enforced lockdowns has fundamentally altered consumer behavior and business models across the board. This shift serves as a proxy for broader economic recovery narratives as e-commerce success signals robust spending trends in developed markets. Current sentiment and market dynamics point to longevity in this trend, bolstered by accelerated digital adoption across sectors.
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