Whether you need to translate key investment information (KIIDs) or full annual reports with the management statement, auditors’ report, financial statements and all the rest of it, ����’s important to choose a trusted language service provider with the experience and expertise to provide you with a compliant financial translation that’s accurate, consistent and turned around fast.

Financial terminology and regulatory precision

Like any other sector, finance and accounting has its own jargon, with the crucial difference being that the terminology used in finance and accounting often has specific legal and regulatory definitions, and refers to specific things in the context of business and commerce.

It is, for example, crucial, but far from enough, to know the difference between stocks, shares and equity;��you also need to know when to use which term. Interest and interests can denote very different things (respectively the cost of borrowing and ownership holdings), and security is not necessarily singular of securities (the former may refer to safety – financial or otherwise – the latter to traded papers such as bonds). It’s also useful to know when to use �����ǰ��پ������پ��Dz���and when depreciation is appropriate.

These examples are merely scratching the surface of a jungle of financial terminology, accounting expressions and business jargon that need to be understood as well as translated correctly, using the equivalent financial terminology of the target language.

One of our most senior financial translators, Danielle Davis, has been working with financial terminology for over a decade. She says, “I started keeping a record of the names for IFRS and related standards that appeared in our source material and matched these up to the correct official English titles. I then added the French, German and Finnish titles when I found them in a new term base just for the IFRS titles so that everyone who works for Sandberg, in-housers and freelancers, could benefit from them.”

Only a conscientious financial translation expert would understand and undertake such an excavation to ensure the terminology is up-to-date and compliant with relevant regulations and industry standards. A generalist translator may find terms in dictionaries, even financial ones, that were once correct but are no longer used. Danielle goes on to say, “I realised that some of the generic terms used for financial jobs, e.g. ‘turnover’, ‘book value’, ‘long-term assets’, etc. had been superseded in IFRS. So it took a while to work out which terms to use instead, especially as the standards were not available in our source languages.”

The result of this approach is an accumulated store of terminology that is made available to all translators at Sandberg. Of course, accurate terminology isn’t just important for financial translation – it applies to all kinds of jobs. You can read more about the importance of term bases in ensuring the correct application of specialised terminology in our blog post on terminology management.

Timeliness without compromising compliance

Time pressure brought about by seasonal peaks can lead to error, especially if the translator who’s able to do the job fast is not the one with the greatest expertise or experience. We work with you to develop delivery models that support both fast turnaround and compliant financial translation.

This may involve the use of Account Linguists – our dedicated expert translators who you can send work to directly – cutting down red tape and speeding up turnaround time, or it may involve the use of one of our carefully selected family of expert freelancers.

Crucially, the work mentioned above, of accumulating treasure troves of terminology, may also greatly benefit you when it comes to fast delivery. Danielle again, “I would say that generally there are two reasons why ����’s essential to use term bases in financial jobs: 1) compliance with the correct names and terminology, and 2) consistency within the file/job/client’s past documents.”

Her second point refers to what is known in the language services trade as translation memory (TM). When we produce a translation for you, the text is stored (anonymised in compliance with GDPR) in our system. The next time you send us a similar text, the TMs, together with the above-mentioned term lists and term bases, will help us to produce a correct translation faster.

All of our systems and procedures are designed and built with your needs in mind. For example, we can develop a private translation memory just for you to ensure consistency year after year.

Financial translation expertise for regulated documents

Another of our senior financial translation experts, Tom McNeillie, highlights another important aspect to consider in financial translation, namely that the target audience of the text may not all be accountants and finance experts:

“Key investor information documents (KIID) are regulated documents that must comply with a number of requirements in order to create a standardised document that cuts out a lot of the financial jargon and can be more easily understood by retail investors, i.e. ordinary people who are not necessarily professional investors.”

Since 2023, key information documents (KIDs) have replaced KIIDs for PRIIPs, reinforcing the need for clear, plain-language financial communication that still meets strict regulatory requirements.

Balancing legal precision with accessibility requires experience. In addition to investor information documents, we regularly translate IFRS documentation, prospectuses, annual reports, auditors’ reports, business plans, insurance documentation, public and private offering materials and more. This also includes tax reports, benefit plans, retirement schemes and documentation relating to equities, bonds, commodities and foreign exchange.

Tom goes on to explain, “Annual reports can take two main forms: visually impressive corporate documents which large listed companies produce for their investors and shareholders, or plain annual reports that investment funds are required to publish as part of their reporting obligations – these are more likely to just show core balance-sheet information in a plain format.”

Whatever your requirements, you should choose a trusted provider of financial translation services with the experience and regulatory knowledge to support your reporting obligations. When compliant financial translation work is handled by experienced experts, supported by term bases, term lists, translation memories and knowledgeable colleagues, they can turn the work around both fast and accurately.

When you partner with Sandberg, your translations are never liabilities – only assets.

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The current state of the heavy machinery sector

The global machinery market saw a healthy growth from , an annual growth rate of 7.6%, as the sector recovered from the pandemic lockdowns. Some analysts expect a further growth rate of 6.6% by 2027, driven in part by an increased demand for construction and infrastructure equipment.

The highest growth rates are expected in the Asia Pacific region, as ongoing large-scale infrastructure projects in China and India continue to be rolled out rapidly, including new highways and airports.��

European machinery and equipment manufacturers have also witnessed a significant recovery, with revenue growth spiking to 18% in 2022 compared to 7% in the North American sector. However, Europe lags in profitability, with EBIT margins falling to 8.6%, whereas North America achieved 10.4% over the same period, as reported in a . A large part of the reason is the inflationary pressures in Europe, particularly on energy costs, which have been mitigated in America through shale gas exploration.

The heavyweights of heavy machinery

In the construction industry, the US-based Caterpillar Inc. dominates the market. In 2023, Caterpillar Inc. reported establishing itself as the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Key competitors in the global market include Japanese Komatsu and Hitachi, US company John Deere and Swiss manufacturer Liebherr.��

Other notable players within the heavy machinery market are Daimler Trucks, one of the leading heavy machinery manufacturers in the world. With origins dating back to the 1890s, the company has a global presence, employing more than 100,000 people in 42 production sites worldwide. They produce lorries of various sizes and models, including commercial vehicles, buses and specialised vehicles like fire engines.����

Founded in 1927, the Volvo��Group is another prominent player in the heavy machinery market, producing commercial vehicles, construction equipment and diesel engines. Volvo operates in several markets, including Europe, North America and Asia. In April 2021, Volvo Group sold its UD Trucks division, generating a USD 2.3 billion payout.��

To preserve its competitive stance globally, the Volvo Group has been steadily investing nearly (December 2022) in research and development (R&D), primarily focused on battery-powered commercial vehicles.

Paccar is a well-known American manufacturer of light, medium and heavy-duty commercial vehicles, marketed worldwide under the Kenworth, Peterbilt and DAF brands. Paccar also produces industrial winches under the Braden, Carco and Gearmatic nameplates.��

Scania, a Swedish manufacturer of heavy commercial vehicles and engines established in 1891, reported an impressive growth in in 2023. The company’s workforce grew to 58,163 people, an increase of 2,500 from the previous year. Scania has been focusing strongly on alternative fuel and electric vehicles, selling 6,454 units in 2023, a slight decrease from the previous year but still a substantial part of their total delivery of 91,652 vehicles.��

The main challenges facing the heavy machinery sector��

Skilled labour shortage

A critical issue in the heavy machinery sector is the lack of skilled manpower. By 2050, 30% of the global workforce will be 50 years of age or older; however, in the EU, only remain active in the labour market. This scenario underscores the urgent need for young recruits who are either highly skilled or given training opportunities within companies, in addition to finding ways to retain older workers.

In Europe, the number of unfilled jobs in the sector rose by around 70% from 2020 to 2022 and has remained just above 500,000 vacancies since the beginning of 2022. Germany alone reported approximately 250,000 vacancies in the machine sector in 2022, a doubling from the previous year as highlighted by a In a figures show that the increased integration of smart connected devices, equipment and systems require highly skilled roles, which are expected to grow the fastest between 2022 and 2032. ��

Understanding the evolving expectations of new generations and the changing needs of older workers is crucial. Companies are also implementing internal systems to enable workers to upskill and work flexibly when the need arises, such as the ��positions, which have proven highly successful.��

Big Data and heavy machinery

The industrial equipment industry is not immune to technological innovation, Big Data and artificial intelligence. The integration of advanced technologies like the Internet of Things (IoT) is and making it smarter.��

systems, where vast amounts of data can be generated and analysed at once, enable fast decision-making, predictive maintenance and operations optimisation. Maintaining such systems requires an ongoing and dedicated investment in equipment, resources and skills training for engineers and technicians.

AI, automation and Big Data integration can also help mitigate the shortage of skilled staff in the sector by simplifying and optimising processes. For example, machine parts can be exchanged before they break, and changes and upgrades can be planned proactively.��

Carbon footprint and the price of transition

Another challenge the sector faces is the transition to a sustainable low-carbon future. The term “zero carbon” is still widely used to describe Electrical Vehicles (EVs), despite a from the Advertising Standards Authority stating that it is misleading to call an EV “zero carbon” unless referring exclusively to driving it. This is because CO2 is released during the vehicles’ manufacturing process��and potentially in the production of the electricity that powers them.����

The increased demand for batteries is also not without its environmental impact. , it takes 2.2 million litres of water to produce 1 tonne of lithium. When Chile, for example, produces 8 million tonnes of lithium, this will have used around 17.6 trillion litres of water, in addition to the impact the mining has on the surrounding communities and the environment. ��

Furthermore, that the cobalt used in batteries, including vehicle batteries, is in some cases sourced from mines where child labour and other dangerous work practices are rife. ��

The EU , which means that European companies must document that the products they import adhere to environmental and human rights standards. For the machine industry, it will be necessary to carefully build supply chains, as any environmental or human rights impact will undoubtedly come under scrutiny as the transition to the desired low-carbon reality gathers pace.

Inflation and profitability

As mentioned before, revenue and productivity have both increased in Europe, but profitability is weaker than in North America. , including the increased price of energy, fuelled largely by sanctions on Russia, and interruptions of supply chains.��

The development of shale gas has helped the US keep gas prices down. This has had knock-on effects across the market, not least on energy-intensive steel production, which is extensively used in the production of heavy machinery.

The conflict in the Middle East is also driving up volatility, as well as insurance costs and transportation times for goods that are re-routed away from the Suez Canal.��

Businesses that are robust enough to withstand these difficulties and perhaps even increase their efficiency to thrive in troubled times will stand even stronger in a global industry where there will always be an element of volatility.��

Innovation and R&D

Patents remain vital for protecting and maintaining a company’s competitive edge. Innovation is crucial in a mature market like heavy machinery, where distinguishing a product by solving problems more efficiently can drive sustainable growth.��

Patent applications to the�� from 181,532 in 2019 to 199,275 in 2023. However, the number of patents for specialised machines in 2022. The top five countries for patent applications were the USA, Germany, Japan, China and the Republic of Korea, with a total of 57% of applications coming from outside Europe and the UK. ��

Notably, the Nordic countries of Sweden, Denmark and Finland rank in the top five for the number of patent applications as a share of the population. Denmark and China are the only two countries that have had stable growth in the number of issued patents across all major sectors. ��

As skilled labour becomes scarcer, innovative industrial equipment that enhances efficiency and productivity per working hour will be essential for future success. ��

Heavy machinery translation and localisation

In the global market, making use of heavy machinery translation services provides significant added value and is often a crucial necessity.

The most successful companies in the global marketplace are those that maintain the integrity of their product while adapting it to meet local preferences. Swedish furniture giant IKEA, for example, not only tailors its product range to fit local needs but also makes linguistic and cultural changes so that its product and marketing materials resonate with the target audience.��

Although industrial machines are not typically marketed directly to consumers like an IKEA coffee table, the underlying principle remains the same: reaching international audiences is crucial for growth and overall business sustainability. To succeed, business must tailor their offerings to appeal directly to decision-makers in the industry or industries they aim to penetrate.��

Localisation covers a range of activities and areas crucial for commercial success. This can include product adjustments to meet specific local conditions, such as modifying machinery to handle dry, sandy environments or cold, snowy conditions.��

In addition, localising product descriptions enhances��the connection with local buyers, while localised customer service and helplines foster long-term relationships.����

With the global shortage of skilled labour, attracting qualified and highly motivated people from all over the world is another obvious benefit of a global approach, guided by the principle that has made Spotify a success: Think Global, Act Local.

Specialist knowledge

Heavy machinery translation often requires linguists with specialised knowledge of commercial and regulatory needs as well as technical terminology. ��

Professional localisation services use several tools to ensure that translations are linguistically accurate and industry-specific (e.g. a “pipe” may mean something very different in the oil-drilling industry than in the construction industry). This includes maintaining term bases with preferred translations and technical terminology.��

Automated solutions can also be beneficial for ensuring accuracy and consistency across technical translations. However, it is essential that a competent human translator reviews all content for accuracy and adherence to agreed terminology.

Common content types for heavy machinery translation��

There are several key areas where the heavy machinery sector needs translation services:��

Product information

Key product information translation may be mandated by regulations such as the on machinery. This regulation stipulates that all key information regarding machines, including statements of conformity, instructions and a broad range of other documentation, shall be presented “…in a language which can be easily understood by users.”��If necessary, it shall “… be translated into the language or languages required by the Member State in which the machinery or related product is placed on the market, is made available on the market or put into service.”

Product descriptions

In a market dominated by established players, standout product descriptions can significantly impact how a company’s unique selling points are communicated to a technically savvy audience.�� A specialised translator can help ensure that the terminology and meaning are spot-on for every��audience.��

Safety information

Heavy industrial machines and construction machinery are high-risk entities to use, with the construction sector topping the stats for .��Given these risks, it’s crucial that product manuals and operating instructions are clearly presented in a language that each user fully understands, both for safety and regulatory compliance.����

Patents����

When it comes to patents, translators should have experience with both technical and legal translation to ensure precise and effective communication.

Reach global audiences in a global industry

Producers of heavy machinery – whether it is industrial equipment or machinery, construction machinery or heavy goods vehicles – face numerous challenges including the need for skilled labour, increased globalisation, the integration of technologies like Big Data, IoT and AI, and evolving sustainability and low-carbon requirements.��

Despite these challenges, the sector is strong and continues to grow and improve. For instance, the UK government’s Advanced Manufacturing Plan, launched in November 2023, highlights ��across Europe, the UK and Asia.��

But to ensure compliance with regulations and maintain a competitive edge in such a globalised and competitive industry, high-quality heavy machinery translation services are a necessary component of a successful global sales and marketing strategy.

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What is product adaptation?

When IKEA expanded to the Japanese market, they found that it was not enough merely to localise product names and instructions. They had to adapt the products themselves to make them compatible with the small indoor living spaces of the Japanese as well as the Japanese way of using furniture to maximise the efficiency of indoor areas. Trying to enter the American market, they found the opposite challenge; Americans favoured the “go large” option on the menu of life, and so beds, cupboards and even drinking glasses had to be made larger to fit with an expansive lifestyle. 

Product adaptation is quite simply everything that you do to the product as part of a global marketing strategy to adjust it and make it more appealing and suitable for a specific market, including tailoring it to local needs and tastes. This ranges from making statutory adjustments and meeting specific market regulations for labelling and information to adjusting the design and the actual composition of the product itself. For instance, beauty products like shampoo are reformulated for tropical climates to cope with the greater humidity of the target market. 

An export strategy that hits home 

Sometimes a product coming from a foreign market is best when it is not tampered with but rather presented in its original form. Many products with deep roots in culture and tradition are best left as they are, while some products instead benefit from standardisation. For example, the distinctiveness of a pungent French cheese lies in its unaltered French identity, appealing to those who favour such authenticity. 

However, the approach that works for one product may not work for another. McDonald’s is known as the master of standardisation: you can walk into a McDonald’s and order a Big Mac and it will taste consistently the same worldwide.

But McDonald’s also localises some menu items to cater to regional tastes. In addition to the McKroket in the Netherlands, in India, you can get the , in Malaysia the Mango McFlurry, in Italy the cheese and tomato-filled Panzerotti, in Hong Kong a seafood range of Ebi Burgers – the list goes on and on. McDonald’s skilfully balances global consistency with local adaptation, tailoring its offering to meet local tastes and traditions. 

When the product changes 

A more radical form of product adaptation, similar to ��������’s approach in the Japanese and American markets, involves changing the product itself.  

An example of this , dividing into the US or the UK camp, is the difference between Fanta as sold in the USA and Fanta as sold in the United Kingdom. 

As the Daily Mail article goes on to explain, both the colour and the ingredients differ. The US version contains more sugar, no orange juice and artificial colourings, while the UK version uses concentrated orange juice. The UK version is adapted not only to the British taste but to the British tax regime: the British government introduced a sugar tax in 2017, making a product with higher sugar content more expensive. In order to stay competitive and minimise the impact of such taxes, the Coca-Cola Company uses less sugar in its UK products. 

Awareness of how local regulations and tax systems could impact certain products or ingredients is a key part of adapting a product for a local market. Thorough market research must therefore be first on the agenda to understand what needs to be changed for a target market as well as what should remain the same. Let’s take a closer look at other key elements of product adaptation. 

Key elements of product adaptation 

There are at least 7 key drivers you need to consider when deciding if product adaptation is necessary and desirable. 

Regulation 

Market-specific requirements often dictate labelling, declarations of conformity and product instructions — you can read more about it in this article on the linguistic requirements for export. But labelling only scratches the surface. These regulations can extend beyond product packaging to affect the actual content of the product. For example, in the USA, certain food additives are allowed that may not be allowed in Europe and vice versa, necessitating adjustments to the product formulations to meet local regulatory standards while maintaining product integrity.  

Physical environment 

Some products are naturally more suited for certain markets, while others might need a tweak or an adjustment of some kind based on the physical environment of the target market. Cars and other vehicles, for example, might need modification to suit the climatic conditions of a particular geography. In the Middle East, vehicle filters and clutch systems are adapted for hot, dusty conditions. In contrast, in the Nordic market, electric cars benefit from features like seat warmers and battery warmers that provide safety and comfort during the long, cold, dark winters.  

Infrastructure 

Considerations for physical products also include storage needs and logistics. How good is storage capacity in the target market? If it is frozen food, for example, are freezers generally available and can your product be shipped in lorries with freezer boxes?  

Here, we can also return to the size issue that IKEA faced: some consumer markets like to buy in bulk and do their shopping less frequently, such as American consumers. As a result, it makes sense to have large packaging that can fit more of the product inside or multi-packs so that several items can be purchased in one go. In other markets, not least developing markets, purchasing power is relatively weaker, and so consumers tend to prefer small units. Here, it makes sense to pack even low-cost products such as chewing gum or razors into single-item packaging to lower the buying threshold for the consumer. 

Internet 

For online products or services, the quality of the internet infrastructure is paramount. Why did Facebook launch their Facebook Lite version? Because it ensures accessibility for users in countries with lower internet connectivity. 

Likewise, having a website equipped with amazing functionalities and offerings loses value if users are forced to endure long loading times. Google’s research has found that 53% of mobile users will abandon a webpage if it does not load within 3 seconds, despite the average load time on 4G networks being 14 seconds! Therefore, optimising your website to ensure rapid loading times is crucial, particularly if you want to align with the internet capabilities of your target market. 

Culture and consumer preferences 

Just as McDonald’s tailors its menu to fit in with local preferences, Starbucks has also adapted its products to suit local cultural and consumer preferences. In Japan, understanding the significant role tea plays in Japanese culture, Starbucks decided to enrich its menu with an array of tea options, including a matcha-flavoured one as well as various green teas.  

In addition, Starbucks embraced the significance of the Japanese Cherry Blossom Festival by introducing pink-coloured drinks, cups and merchandise, aligning their brand with the festival’s cherry-pink colour theme. Not only did this tap into a unique element of Japanese culture, but it also appealed to the Japanese consumers’ preference for special and limited-edition products, which can help drive sales. 

Competitors and corporate culture 

Before deciding to enter a new market or not, the first question naturally is: what is currently being offered there? If an existing product already satisfies consumer demands in a way that poses a challenge to your competitive advantage, then you need to think very carefully about your approach.  

Product adaptation should be executed with precision by accounting for the existing market landscape and determining how your product could fill a gap in the market.  

Such a strategic alignment depends on your corporate culture: is there a proactive willingness to conduct thorough market research? Does your team possess the necessary skills and abilities to make the necessary changes and tweaks? Do you need to bring in outside expertise or further training? Addressing these questions is fundamental to formulating a successful export strategy. 

Language 

Another factor that plays a pivotal role in the global expansion of a business is the question of language. A study by Aston University’s Business School into 415 UK SMEs from different sectors illustrates how important the language element is to a successful export strategy. The report made it clear that “… SMEs making use of language capabilities are 30% more successful in exporting than those who do not.”&�Բ�����; 

Navigating the language requirements for exporting involves everything from translating regulatory documents and compliance statements to the wording on the product packaging and marketing materials. For digital products, such as an app, it may be necessary to consider user or UX localisation. This entails the adaptation of the user experience to local expectations in terms of language, culture, norms and formats, as well as offering products suited to the local audience. 

Every step of the product way is infused with linguistic considerations, and mistakes can cost a company dearly. IKEA exemplifies the strategic use of language to resonate with local consumers, notably through their marketing campaign in Malaysia that cleverly integrated wordplay in the local Hokkien dialect into their product marketing content. 

The four areas of product adaptation

In substance, the various considerations for entering a new market can be roughly divided into four areas of adaptation: Statutory, preference, aesthetic and function.  

Statutory adaptation is the changes that you need to make to comply with regulatory and legal requirements for the target market, such as safety features and additives. 

Preference adaptation includes those modifications made to better align with the local market’s tastes and preferences, such as colour, taste, texture and range of product choices. 

Aesthetic adaptations, while also falling under preference adaptation, hold distinct importance. Prioritising the way a product looks is not merely a nice thing to do; it is a crucial consideration if you want to outperform your competitors. As seen with Starbucks, Japanese consumers prefer products that are neat and visually appealing, so aesthetic changes are an effective way to build a connection to Japanese consumers. 

Functional adaptation refers to adjustments in how a product works to ensure it meets the specific needs of the target market more effectively. Examples include Facebook Lite optimising performance for regions with limited internet, changes in packaging size for convenience or additional features like battery heaters for cold climates. 

The ultimate global market strategy always starts with considering the target consumer and working your way backwards to determine what needs to be done at every step of the way to make new consumers choose your product.  

Start with market research and the considerations outlined in this article, and it can mean the difference between selling a product that collects dust and one that flies off the shelves.

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Fate or choice?��

In the Old Norse myths, the Norns decided your fate, right up until your dying day. There was nothing you could do to change this; you could only decide how you met your end, either as a coward or as a fighter. When we see large companies and corporations around us today, it is easy to think that they are “too big to fail”, but as several retailers in the UK have recently found out, no company is ever fully secure. Just as attacking is the best defence, driving change is the best way to remain relevant, and Nokia was a key driver of this change in the 90s and early 2000s. Then, change happened to it. ��

From paper mill to phones

The company that would later become Nokia started out as a paper mill in 1865, founded by the mining engineer Fredrik Idestam. The company chose the name “Nokia” in 1871 when the banks of the river Nokianvirta were chosen as the site for Idestam’s second mill. ����

Around the turn of the 20th century, Nokia moved into electricity generation, which caught the eye of Finnish Rubber Works. It bought up Nokia in 1918 to secure access to the company’s hydropower resources. This new entity went on to acquire Finnish Cable Works in 1922, but the three companies continued as separate operations until they were formally merged in 1967, forming the Nokia Corporation.��

In the following decades, the company focussed mainly on the paper, electronics, rubber and cable markets, producing goods like toilet paper, bike and car tires, rubber wellies, TV sets, communication cables, robotics, computers and military equipment until 1979.��

The new age��

In 1979, Nokia entered into a joint venture with a company named Salora, a leading Scandinavian colour TV manufacturer, to create a radio telephone company called Mobira Oy. After a few years, Nokia launched the world’s first international cellular telephone system linking Sweden, Denmark, Norway and Finland, which it called the Nordic Mobile Telephone network. Shortly after, it launched the world’s first car-phone, the Mobira Senator, which weighed in at around 10 kg (hard to believe when compared to the pocket-sized smartphones we carry around today).��

With this, Nokia had seized the initiative in the mobile world, at least as far as Europe was concerned. In 1987, the company launched one of the first handheld mobile phones, which, including its battery, weighed in at “only” 800 g (28 oz). The Mobira Cityman 900 was nicknamed “The Gorba” after Soviet leader Mikhail Gorbachev was seen using one to make a phone call during a press conference in Helsinki. The phone became the ultimate status symbol for the 1980s yuppies (young, upwardly-mobile professionals) mainly due to its high cost (), though it only had a talk time of 50 minutes. Still, this was more than enough time to tell your secretary to book you a table at a fashionable restaurant.��

The Nordic road to success��

In the early 1990s, Nokia shed the divisions of its business that were not directly related to telecommunications, such as data, energy, television, tyre and cable production, focussing its corporate attention on innovation in the growing mobile phone market.����

was made on one of its mobile phones in 1991 by the Finnish Prime Minister Harri Holkeri to the Deputy Mayor of Tampere, Kaarina Suonio. The call lasted just over three minutes but reverberated through the following decades. The year after, the , the 1011 (named as such because it was launched on the 10th day of November), was released to the world. This was also the first mobile phone to allow for text messaging via the Short Messaging Service (SMS) as well as roaming. But it was the launch of another innovative handset that would make Nokia the mobile phone legend it was to become.��

The annoying ringtone��

In 1993, the eponymous 2100 series was released. It introduced the now (in)famous Nokia ringtone, based on a short phrase from the a piece composed for classical guitar by the Spanish composer Francisco Tárrega in 1902. While the company had only projected sales of around 400,000 units, it went on to sell more than 20 million!��

Further innovation followed in 1996 with the , which could send e-mails and faxes (remember those?), browse the internet, as well as offer word-processing and spreadsheet functionalities. That same year, Nokia launched the , which had a cover over the keys that you could slide down for dialling. The slightly curved shape gave rise to the nickname “the banana phone”, and it achieved something of a cult following after being featured in the action sci-fi film The Matrix.

Yet another giant leap towards dominance in the mobile market came with the Nokia 6100 series. Almost 41 million units were sold in 1998, and Nokia overtook Motorola as the number one mobile phone maker that year. The Nokia 6110 was the first that came with the classic and addictive game “Snake” pre-installed. Nokia continued to develop, produce and sell phones at an impressive scale, and its market share climbed to more than .��

Why did Nokia succeed?��

At this point, many articles on Nokia plunge right into the story of why the business started to falter, but ����’s useful to reflect on what the company had done right up to this point. Firstly, they responded well to new and challenging circumstances. Finland had been through a recession in the 1990s and the Nokia Corporation was struggling financially. At the same time, the government had liberalised the telecoms market and Finland had joined the European Union, moving the country closer to Western markets. Nokia realised that the best growth decision was to specialise in the mobile telecoms market, so it started to divest from the non-telecoms divisions of the business. ��

Nokia also realised that its strength as a company lay in research and development for innovation. As Caroline Lesser writes in a paper for the OECD (Organisation for Economic Cooperation and Development), called :

“Nokia’s efficient product and process development which lie at the heart of its competitiveness — were possible in large part thanks to the company’s R&D approach. First, Nokia increased its R&D expenditure dramatically. While in 1991, R&D spending as percentage of total sales represented approx. 5.5%, this share almost doubled by 2000, to reach approx. 9%.�� […]����“In 2005, Nokia’s R&D expenses totalled €3.8 billion, representing 11.2% of Nokia’s net sales that year.”��

Focussing its operations and investing in R&D were clearly important factors in Nokia’s spectacular rise.��

Nokia’s localisation strategy��

Furthermore, during this time, localisation became a key part of Nokia’s success in expanding internationally. Compared to competitors like Motorola and Ericsson, Nokia found potential in adapting its products to young and fashionable consumers; part of this included localising and translating content into their languages, cultures and tastes.����

Most importantly, they had to localise the product, including the software itself and support documentation, such as user guides. For example, in 1999, Nokia realised that in order to penetrate the Chinese market, one of the biggest mobile phone markets in the world, it had to develop a User Interface (UI) in Chinese. This focus on localising products helped them build connections and secure success in new global markets.��

Other layers of localisation were just as important, such as Nokia’s sales and marketing materials. The localisation of these elements meant that more customers could understand what Nokia mobile phones were uniquely positioned to offer, and ultimately, decide to purchase the product. At this time, though, marketing was mostly done through traditional methods, like TV advertisements, billboards, newspapers, magazines, brochures, posters, and more. We can look back on advertisements in , , and many other languages to see the effort that was made to connect with these audiences. Nokia’s localisation even went as far as working with local carriers, like Verizon and AT&T in the US and Movistar in Latin America, to sell its products.��

Some mistakes were made too, of course, like when it went unnoticed that “Lumia,” the name of one of Nokia’s later phone models, could also mean “sex worker” in Spanish slang. Nonetheless, devoting focus and time to these localisation elements played a part in ensuring Nokia’s rise to the top, even though it turned out to be shorter-lived than the company had hoped.��

Why did they fail?��

In their book on the fall of Nokia, , the journalists Merina Salminen and Pekka Nykänen argue that the company was ill-prepared to respond to the disruptive impact of the Apple iPhone when it was introduced by Steve Jobs in 2007. Nokia had a large army of engineers who were great at developing new hardware with innovative designs and quirky functions, such as the fashion-oriented “lipstick” phone, the Nokia 7280, which features in a Pussycat Dolls music video. But as Salminen and Nykänen write, ��

“The product portfolio of the company was exceptionally large. This strategy had worked well while business was still blooming, even if only a small part of the company’s vast product range was successful, those best-sellers brought in enough money for the business to be successful. By 2010 the vast product range had become a burden. There had not been a best-selling product in several years ��[…]” (Chapter 4, The lame legacy of Mr. Kallasvuo).��

The beauty of Apple’s iPhone is that each new version is essentially a new and improved iteration of one product. Over the years, the content has seen the most improvement, while the physical design has changed very little. Nokia’s R&D systems were, however, more geared towards hardware than software and content.��

By the late 2000s, Nokia was churning out a vast array of products. Even without a best-seller, it still shifted around 400 million units, but most of the volume was generated by basic phones priced at around 30 Euros, which did not do much to improve the bottom line. The organisation had also developed internal issues, with extremely long lead times to get phones to market and complicated management structures overflowing with internal politics.��

Time to get smart(phone)��

Many retellings of the Nokia story may not highlight this, but after the success of Apple’s iPhone, Nokia’s leadership quickly realised that the touch-screen smartphone was the only way forward in the industry. But even though the launch of the 5800 Xpress Music, running on the Symbian operating system, was moderately successful, with 8 million units sold, it was felt by many to have a lower quality user experience than the iPhone.����

Nokia’s profits fell by 30%, sales by 3.1%, whilst Apple’s iPhone profits boomed by 330% during the same period. Then, in October 2008, the first smartphone with the Android operating system was launched, . Nokia meanwhile continued to try and make its operating system, Symbian, able to compete with iOS and Android, but the platform was difficult to adapt. Internally, hardware designers and Symbian software designers were pulling in different directions. The sheer number of different product lines also made it very difficult to keep up to date with development in a unified manner.����

Nokia’s share of the market slipped strongly from 2007 to 2010, but after 2010 it dropped dramatically. So what happened? Some point the finger at the new CEO, former Microsoft executive Stephen Elop, appointed in 2010 by Nokia’s board to turn the company’s fortunes around. As a Canadian, he was the first non-Finnish CEO of Nokia, and although some had misgivings, he was well-liked early on in his tenure.��

Strategy and communication errors��

Due to the problems with Symbian – it was not touchscreen-friendly and often lagged and froze – Nokia joined forces with Intel to create a new operating system, MeeGo. Development had started before Elop came aboard, but he is reported to have helped focus the development teams’ efforts on attempting to produce a Nokia product to rival even the best phones on the market.����

However, for various reasons, Elop decided that the cooperation with Intel would not be continued, as he said in his now infamous “burning platform” email. In this internal memo, he used the analogy of a man standing on a burning oilrig, where he must make a choice whether to be consumed by the fire or take a chance and jump into the cold sea. This illustrated where he believed the company stood in relation to its competitors.����

The email accurately set out some of the challenges that Nokia was facing, such as the high-end appeal of Apple’s phones, but when he stated that MeeGo would not be continued, along with the knowledge that Symbian was not fit for purpose, he created the twin effect of undermining consumers’ confidence in new products and increasing the pressure on the board of directors to approve cooperation with a new operating system provider. The effects were soon visible, as .��

As a result, a cooperation deal with Microsoft was duly signed on the 21st of April 2011. On the surface, it ought to have been a match made in heaven, with the hardware masters of Nokia and the software wizards of Microsoft able to combine their efforts. However, the lack of confidence remaining in the existing Symbian OS was diminishing, as phones with this OS were being abandoned across Asia. Sales had initially held up in India and China, but device makers such as Huawei, ZTE, and Lenovo were on the rise, and Nokia’s devices were literally being replaced by Android units on the shelves. Nokia was forced to issue a market warning that revenue would be lower than expected, spooking the market and causing the share price to tumble by 18%.��

Finally, in 2011, the new Microsoft-Nokia phone was born and named the Lumia, apparently for the word’s association with snow in Finnish and light in English. The Lumia went on sale in Europe in November of 2011, and from January to March the sales exceeded two million. This was not too far off the initial sales figures for the iPhone, so the hopes were that sales would climb from there. But the loss in the first quarter was 260 million Euros.��

Sales in China had collapsed. In the US, the Lumia 900 had a software issue that could affect data transfer and refunds had to be offered to those affected. Moreover, Nokia’s presence as a brand in the USA was practically non-existent by 2011. The network selling the phone in the US, AT&T, soon started offering the Lumia 900 at a heavily discounted price, further damaging the Nokia brand’s image.��

Critics of Stephen Elop have pointed out that in terms of market value, Nokia dropped from 29.5 billion euros to 11.1 billion euros on his watch. This ended with the unhappy sale of Finland’s flagship company, a source of great national pride, to Microsoft in April 2015.��

In summary��

It is too easy to say that Nokia was simply slow to respond and that its leaders were resting on their laurels. When you read the account in Merina Salminen and Pekka Nykänen’s above-mentioned book, (Operation Elop), you will see that within Nokia there was frantic work going on, including numerous realised and aborted development projects and a willingness to change and respond to changing market demands that refute this simplistic narrative of a hubristic company unwilling to accept that the world is changing around them. The fact that it appointed a non-Finnish CEO to run this national flagship company is in itself evidence of a willingness to change.��

In hindsight, it is also easy to underestimate how interruptive the iOS-based Apple iPhone was back in 2007. It significantly changed the everyday world of most people in both mundane ways, like how we check the weather or hail a taxi, as well as in ways that are truly profound, like how we communicate with friends and how we interact with politics. This change was driven by the vision of Steve Jobs and the many brilliant creators at Apple, and it was a very different vision than that which had driven Nokia’s success.��

Nokia was simply not prepared in its fundamental structures to adapt to a software and content-driven environment, and perhaps its greatest mistake was not to realise this soon enough. In nature, natural selection happens by the survival of the fittest. In the free market (if it is allowed to operate) the same principle goes; it is the business best prepared to meet customer demands that will survive.��

But finally, let us not forget another intangible hurdle Nokia was up against: iPhones were cool. They became a fashion statement for those who wished to align themselves with what they saw as the Apple brand’s values – progressive, fresh, innovative, well-designed and quality conscious. To win against Apple you would have had to be all that, plus more fun. And you know what they say about Finns and fun…��

Regardless of its later years, the Nordic company remains a great example of how taking the initiative to specialise in creating a product of relevance to people around the world, like the mobile phone, can pay off and lead to international success.��

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Nordic values – and value for money

, one of the greatest success stories to come out of Scandinavia in the past few decades, embodies some of the most important Nordic values: it is straightforwardly unshowy (if persistent), democratically inexpensive (comparatively) and pragmatically practical (unless, like me, you are exceedingly clumsy with self-assembly), yet has a good eye on quality and design elegance.����

One company slogan from 1981 ran, “Like Småland’s farmers, our values are down-to-earth.” It could be said that ��������’s cheapest furniture may not be of the finest quality, but when compared with what you might pay somewhere else, ����’s more than good enough for many people. Many of the store’s utensils and home accessories are exceptionally good value and quality. But only once you add the magic of Nordic designer chic do you get a winner like IKEA.��

Humble beginnings

By now ����’s well-known that IKEA is named after the initials of its founder, Ingvar Kamprad, and those of the farm he grew up on, Elmtaryd, and his hometown, Agunnaryd. What’s less well known is that the initial investment came from Kamprad’s father, who had promised to give the young Ingvar a monetary reward for passing his exams with decent results in 1943.��

After a decade of trading, two important things happened in 1953: the first showroom opened in Älmhult, Southern Sweden, (apparently so that sceptical customers could come and see that the quality was good despite the low price) and the company adopted the concept of selling its furniture flat-packed for customers to assemble at home.����

IKEA designer Gillis Lundgren, who designed the BILLY bookcase and IKEA logo, was on his way to a photo shoot for the IKEA catalogue with a table that he struggled to fit in his car. He took the legs off and the proverbial (LED) lightbulb went off in his head: why not design the furniture to be assembled at home by the customer, and thus save massively on transportation cost?��

Whilst IKEA does not claim that Lundgren invented the concept, he certainly contributed to bringing it to the masses and at a level that had never been seen before. The company has adopted the mantra “We hate air,” meaning that transporting the empty space inside a dresser or a table increases transportation costs, and therefore the cost to the end-consumer. Less volume, less cost, lower prices.��

Global thinking – learning from mistakes��

In 1963, a full decade after the first showroom opened and 20 years after the company was founded, IKEA opened its first store abroad, in Norway. Another 10 years passed before IKEA established its first presence outside Scandinavia, in Spreitenbach, Switzerland, with Germany soon to follow. Germany has since become ��������’s biggest market with 53 stores as of 2019.��

After successfully establishing a presence outside Scandinavia, ��������’s global expansion marched on steadily, but not at breakneck speed. Indeed, its first attempt at establishing a presence in Japan in the 1970s went wrong due to a lack of adaptation to local expectations. Japan is a service-oriented society, and the idea of buying furniture that you then have to assemble yourself is not seen as socially acceptable. Another problem was that the standard IKEA sizes did not fit the smaller sizes of Japanese homes. By 1982 IKEA had pulled out of Japan.

Another market that experienced size problems was America, but this time the other way around. Apparently, American customers weren’t used to such small glasses, so were accidentally buying . But for IKEA, these experiences were all extremely valuable lessons. This is where the Nordic value of pragmatism comes in, as when the company directed its longboats towards the US market in 1985, IKEA made sure that the standard sizes of the furniture and other products it offered met the larger expectations of the average American consumer.��

Then, in 2018, the now experienced global furniture trader entered India, a country that, like Japan, does not have a strong tradition of Do-It-Yourself. But this time IKEA was ready for it; the company set up service booths where IKEA staff could help the customers put the furniture together.��

Global standard with local twists��

Based on these experiences, IKEA developed an approach to the globalisation of its business that worked extremely well: stay true to the basic concept, but make just enough local adaptations to be relevant and acceptable to local customers.��

In China , as these are common in Chinese flats. It also cooperated with local businesses to provide delivery and assembly services because Chinese consumers saw it as lower status to have to assemble their own furniture.��

In Korea the company adapted its kitchen designs to , which are common for storing this traditional Korean side-dish. They also removed mentions of the Sea of Japan in a map of the store, instead calling it “The East Sea”, which South Koreans prefer.��

The approach that IKEA follows is a combination of standardisation and localisation. Wherever you go in the world, , but there will be subtle differences. The company has large teams of researchers interviewing thousands of consumers to learn about their habits, tastes and preferences.����

Even the food offered in the IKEA restaurants is adjusted slightly to align it to local tastes. In some Chinese stores, this means offering dim sum and other local favourites on the menu in addition to Swedish meatballs, whereas in India, the meatballs are either made of chicken or are meat-free as Hindus ��Dz�’t tend to eat beef for religious and cultural reasons.��

Translation, localisation and funny names��

You’ve heard of BILLY, but what about FRÖSET, SMÅSTAD, TORKIS, PÄRONHOLMEN, SKUBB or STUK?��

Exactly why IKEA founder Ingvar Kamprad decided to use place and personal names for the company’s various products is not really known. Some say it was to help his dyslexia, while others say that it was to give the products a more personable feel. What is certain is that for naming products, such as character length (4-12), no family names, use of “å,” “ä” and “ö” is a plus, the word must not be trademarked, and it must be a “nice” word.��

Of course, a nice word in Swedish is not necessarily so in another language. In 2005 for example, IKEA named a children’s desk “” (meaning “speedy” in Swedish) which caused a bit of a stink. The rather unfortunate connotation in English meant it had to be changed to something less gaseous for the English-speaking markets.��

But most of the time, IKEA carefully ensures that names can be used in the various countries it sells in. When opening in Thailand, to go through every single product name and to not only read them silently, but to say them out loud and determine if any had negative or embarrassing connotations. The work took four years but paid off; when IKEA finally opened in Thailand, all the displayed product names retained as much of the original Swedish as possible, with small adjustments made where needed.��

This means that Thai customers can happily join the long tradition of non-Scandi customers trying to read, say and decipher what those funny Swedish names actually mean, such as FYRKANTIG (square) or ÖDMJUK (humble).����

But even IKEA can get the balance wrong. In for having airbrushed women out of its catalogue for the Saudi Arabian market. In trying to adapt to the culture and norms of the Islamic country, IKEA had gone too far and created reputational damage when Western commentators, politicians and consumers started criticising these adaptations. The company issued an apology and said that it had failed to live up to its own values.����

For the most part, however, IKEA applies the Nordic value of pragmatism and balances the universality of its products with the necessary local adjustments.��

The global language��

One certain way to avoid translation fails is to not have any words to translate in the first place. to Charlie Chaplin that “What I most admire about your art, is your universality. You ��Dz�’t say a word, yet the world understands you!” IKEA appears to have taken this on-board, because in many of its assembly instructions, such as the one shown to the right for the MICKE desk, there is not a single word in the 40 pages of instructions!����

There is one obvious and one potential benefit from this. As with Charlie Chaplin films, no words means that in theory everyone can understand the pictures, no matter what language they speak. The potential benefit is the saved cost of having to print only one set of instructions and avoiding the cost of the translation process. I say “potential,” because when you attempt to show rather than tell, you may actually be producing documents with more pages. Translation may also be more cost-effective if it makes customers more satisfied and therefore more likely to buy another piece of furniture.��

The wordless pictograms have been another central part of ��������’s global approach. To ensure that the instructions are easy to follow, they ask new employees at IKEA headquarters to have a go at following the instructions and assembling the furniture. That way, they get an idea of how well the average consumer will fare. If it takes too long to assemble, they call it a “husband killer” and make adjustments until it is easy enough not to drive dad to despair.��

This was not true about one of IKEAs epic fails, the , which was inspired by the car industry and in which items were supposed to be screwed together by the customer and then dressed in a cover of choice. Unfortunately, the covers, which were produced in South Korea, had such extreme colour variations that they could not be sold as sets. And the instructions, shown on the left, went down in IKEA history as the most incomprehensible ever.����

Several of ��������’s mistakes, including the inflatable sofa that fell flat, the compost kitchen sofa that was a bit too organic and the pianos that could not be flat–packed, are displayed at the IKEA museum as examples of how to learn from mistakes. Kamprad himself wrote in his 1976 book The Testament of a Furniture Dealer that mistakes are permissible as long as one learns from them.��

Know what you’re not good at

As mentioned above, IKEA is good at learning from mistakes, and that includes knowing what not to continue doing. In 2012 it launched its UPPLEVA (experience) line of TV benches with an in-built TV and speakers.����

The design manager, Marcus Engman, admitted that the company’s venture into electronic technology was not a great success, saying, ‘“[it] is one area where IKEA won’t go. “We weren’t any good there,” […]“We’re world champions in making mistakes,” adds Engman. “But we’re really good at correcting them.”’��

This again reflects that Nordic value of being practical and realising when something strays so much from the company’s core expertise that the effort and cost involved in becoming good at it is more than it is worth. In other words, stop doing what you can’t, do more of what you are good at, and keep getting better at it.��

��������’s unique customer experience��

And what IKEA is especially good at is creating that unique customer experience that you can only find at an IKEA store. Walking into the huge warehouse (the biggest of which is in Manila, in the Philippines with a whopping 700,000 square feet, or 65,000m2, of floorspace), you enter an entirely new world. The stores use “pathways” that guide you through their various film-set like exhibits, showing you (on purpose) how you might use the various products, such as furniture, utensils and cuddly toys.����

If you are desperate to stray from the one true path, you can dash through one of the direct openings from one “film set” section to another, with the openings situated so that you only miss what is relevant to the previous sections. If you want to make an early exit from the store itself however, that could prove very difficult indeed. Not impossible, just difficult; you’re not supposed to leave without having purchased something.��

�ٴDz�’t get hangry��

In fact, IKEA-founder Ingvar Kamprad observed back in the early days of his business that customers tended to leave around lunchtime, often without having purchased anything. The simple reason was that they were hungry and needed to go home, or to a café or shop, to get lunch. Kamprad realised that hungry customers buy less, and with that Nordic attitude of straightforwardness, he decided that if your customers are hungry, you feed them. In June 1960, IKEA stores only offered coffee and cold dishes, but by the end of the year, ��������’s restaurant kitchens were fully equipped. This included a microwave oven, which was certainly a novelty at the time.����

Eventually, the classic dish of Swedish meatballs served up with peas, potatoes, lingonberry jam and a generous helping of cream sauce became the centrepiece of the IKEA restaurant experience.����

Another clever move was to install large, staffed play areas in stores where a customer could leave their child to play for an hour while wandering around and looking at the products. As any parent knows, shopping with children can be a stressful experience, so being able to park them safely so that you get the peace of mind to think and choose is again a very pragmatic solution that can make a big difference.��

Translating values to value��

The Nordic values underpinning ��������’s business model and operating style may not be unique to the Nordic or Scandinavian countries, but the combination of these and the role they play in Nordic people’s own awareness of themselves may very well mean that they play a much stronger role here than in other parts of the world.��

The Nordic self-image as a particularly democratic and egalitarian people has no doubt played a part in ��������’s championing of the concept they call Democratic Design, meaning a balance between five “dimensions”: function, form, quality, sustainability and low price. As Senior Designer, Sarah Fager, says: “Without Democratic Design, we would not live up to our vision to create a better everyday life for the many people.”��

Cheap but expensive?��

Although “the many” can, and indeed have, taken advantage of the cheap but well-designed products that IKEA offers, questions have also been raised about the sustainability of ��������’s products. IKEA has contributed, perhaps more than any other furniture business, to a change in mentality with regard to furniture. It has gone from something you invested in for the rest of your life and often handed down to the next generation to something that you buy for a much shorter time and dispose of when you want something new or the item breaks. How can this be squared with the “sustainability” aspect of ��������’s Democratic Design concept?��

IKEA is aware of the reputational need to do something about this, and Marcus Engman, Chief Creative Officer for Ingka Group, IKEA, that changing consumer behaviour to become more “circular” was a cornerstone in how IKEA wanted to contribute to a more sustainable future. “We’re moving into a future where waste is the raw material,” he said.����

There is no doubt that, in conjunction with policy changes to encourage it, large businesses like IKEA can have an impact one way or another. When IKEA switched all its lights to LED, it instantly led to hundreds of thousands of people having less impact on the electricity grid than they otherwise would have. And it is a balance; is it not a good thing that people on tight budgets, not least families with children, can afford to make home-improvements even if there is an environmental cost?��

As Mr Engman went on to say, “In Sweden, where I come from, nature is in your face. You learn from an early age how to embed nature in your daily life and how to forage to fill your pantry.”����

Once again, Swedish and Nordic values will show the way.��

The post IKEA: How Swedish home-furnishing conquered the global market appeared first on sa���ʴ�ý.

To give a practical example, we have written a source text inspired by the text types that we often translate. Let’s see how our engines deal with it.��

A typical marketing text may go something like this:��

Comfort, style and power! Drive the new XXXX from as little as £XX,XXX and start saving on fuel from day one. This new hybrid SUV will give you the space you need for your family, the power you need to take you where you want to go and the comfort to enjoy the ride.����

Our engines gave us the following results for these Nordic languages:��

The post AI and translation: the new reality is here – almost!�� appeared first on sa���ʴ�ý.

A truly wide-ranging e-commerce report��

is the leading provider of parcels and logistics services to, from and within the Nordic countries, with around 28,000 employees, and HUI Research AB is a consultancy firm specialising in retail, tourism, consumption and economics. It was founded in 1968 as an independent subsidiary of the trade association Svensk Handel.��

, has collated data by surveying a total of 191 retail companies who sell goods online, and around 15,000 consumers over 12 months, with the latest in December 2022. The information from the companies was gathered in January this year, so these figures form the newest and most up-to-date intelligence on the Swedish e-commerce market that we have available.��

In Europe alone, the medical technology market was estimated to be worth about , and despite a setback following the credit crunch of 2008, average growth over the past 10 years has been 4.8% per annum, with a growth rate of 2.9% in 2021.��

The average spending in Europe on healthcare is around y, including medical devices. Additionally, out of the 15,300 patents filed with the European Patent Office, 41% were home-grown, i.e. from the UK and EEA or EU member states. 38% came from the US and 21% from other countries. As mentioned above, in 2021 two European countries – Germany, with USD 11.9 billion, and the Netherlands, with USD 11.7 billion. – were the top importers of medical instruments in the world after the United States. ��

This means that not only is there a solid level of innovation, development and sales of new products across borders within Europe, but it is also extremely lucrative to sell medical devices into the European market.

Rebalancing between physical stores and
e-commerce in Sweden��

In another blog post, we wrote about the boom in online retail in the Nordics generally, with figures taken from the extraordinary rise in online shopping and home delivery that we saw during the pandemic.��

It is therefore not altogether surprising that growth might begin to slow down once things started to get back to normal, but what is slightly surprising is that we have actually seen a decrease in e-commerce in Sweden:��

“[…] for the first time in E-barometern’s history, [e-commerce] showed negative annual growth, falling by 7 per cent.”��

The report points to several contributory factors that are all too familiar to most of us from our daily news – war, inflation, supply-line problems, etc. – but the steep rise in e-commerce during the pandemic was almost inevitably bound to rebalance once physical stores reopened. What’s interesting is to consider the overall trends as we now get used to the “new normal” – what is the direction of travel when it comes to online shopping in Sweden?��

Online shopping trends – where are we going?��

The sector with the largest share of e-commerce in Sweden is Home Electronics, accounting for 51% of the market in 2021 and 47% in 2022, so the reduction of 10% in online sales in that sector really makes a difference. Other sectors showing a fall are Children’s Items/Toys (by 16%); Books and Media, including audio books (by 10%); Furniture & Home and Sports & Leisure (both by 8%); and Building Products (by 3%).��

One sector that is bucking the trend is Pharmaceutical Products, which are up by 10%. Interestingly, this is a sector dominated by older age groups, who only really embraced online shopping during the pandemic. It seems that many still find the convenience of shopping online and having the goods delivered worth continuing with. This is also a cohort with high levels of purchasing power and brand loyalty, but one that overwhelmingly prefers websites that are in their own language and are easy to navigate, as well as trustworthy.

Not all bad for e-commerce in Sweden��

Apart from a dose of optimism from the Pharma sector, ����’s easy to think ����’s all doom and gloom and downhill from here – but this certainly isn’t the case. There are some very interesting and real opportunities breaking through the apparently gloomy statistical clouds.��

First of all, even with the net overall reduction in e-commerce of 7%, online sales are still up on 2019 by a significant margin, as this graph from the report shows.��

The report discusses various future scenarios, but the commonality between them all is that they point to a steady increase in in e-commerce over the next few years.��

What are the e-commerce trends showing us?��

E-commerce has had a strong and increasing presence in Sweden and throughout the Nordics for many years. Scandinavians are generally quick to take up new technologies, and their relatively strong purchasing power on the global stage means that technological devices are more affordable to a greater number of people at pretty much all income levels.��

As the report states: ”In 2003 net sales in e-commerce amounted to SEK 5 billion, accounting for around 1 per cent of total retail sales. Some 20 years later, in 2022, e-commerce had net sales of SEK 136 billion. This corresponds to a growth rate of more than 2,600 per cent”.��

Greater urbanisation also means that it is cheap and easy to have things delivered, either to your home or to a pick-up hub, within 24 hours, with a greater focus on green delivery and sustainability – delivery to hubs has increased in recent years. For many, simply avoiding the crowds in the stores is reason enough to choose the convenience of ordering online.��

Online payments and e-commerce��

Furthermore, Sweden has seen a rise in convenient methods of paying online. The most popular way of paying online has long been with a trusty credit or debit card, with saying they had used one in the past three months to pay online, with “���Ա��Ǿ�����” interestingly listed as the second most popular – something that is ��

But other payment methods have seen a significant increase in user popularity, especially in the younger age groups. The Nets survey saw 41% reporting that they had used a mobile payment option, Swish, in the previous three months in 2019, up from 28% in 2017. Among the 25–34 age group, the figure is 48%!��

Other new players, such as Klarna, are also on the rise. Klarna specialises in Buy Now Pay Later (BNPL) or By Instalment services, and as such competes with credit cards or store cards. The BNPL sector is predicted to in Sweden between 2022 and 2028, so this is clearly an area to watch, not least as the economy puts a squeeze on many people’s budget – especially younger cohorts – and leads them to look for ways to make purchases more affordable and manageable.��

Second hand, first choice��

The economic squeeze, coupled with a concern for the environment and a wish to live more “sustainably”, are jointly contributing to another trend towards buying more second-hand items online. Traditionally, this was mainly the preserve of charity or vintage shops, as well as the online marketplace eBay, but the report predicts a boom in online second-hand purchases in 2023. Second-hand has been growing for years, but as the report states, the second-hand retailer �������������ä������ has seen record growth month-on-month, and Tradera’s Christmas sales spiked by 24% from 2021 to 2022.��

Apart from the external reasons for turning to second-hand shopping, one factor in its particular popularity online is a combination of affordability and convenience.��

“In a physical second-hand store, it is hard to know if you will find what you are looking for, but online you can search for and find whatever you are looking for.”��

It’s also interesting to note where the biggest gender differences are in online purchases. Women are twice as likely as men to buy clothing, footwear and home furnishings online, whereas men are three times more likely than women to buy home electronics and eight times more likely to buy vehicles or accessories for vehicles online.��

Another key difference between customers in the second-hand market relates to age groups. Customers in the youngest age group are almost four times more likely to buy second-hand than the oldest, as demonstrated in the graph below.��

One reason for this is the aforementioned purchasing power of older customers, who are perhaps more likely to be the contributors of the items being sold a second time – after all, a second-hand market can only be derived from an associated first-hand market.��

Marketplaces work��

In addition to �������������ä������ (a charity) and Tradera (a marketplace using bidding, like eBay), there’s also Vinted, for non-professionals and with a specific list of allowed categories, as well as more niche online shops such as Arkivet, specialising in clothing and fashion items for women. The latter has almost doubled its online sales since 2018.��

Generally, marketplaces are the go-to for second-hand customers, with more than half of such purchases in 2022 made through the leading online marketplace Blocket, followed by Tradera in second place with 45%. Shopping through social media is also on the rise, with 38% of respondents having purchased through Facebook Marketplace.��

It comes as no surprise, therefore, that the report states that “Companies selling via digital marketplaces are more positive about how their sales will develop in 2023.”��

Amazon on the up��

Other marketplaces, such as CDON, Afound and Amazon have a strong position, with 32% of men and 23% of women making online purchases through an online marketplace. The 18–29 age group has the highest share, totalling 37% and 27% respectively for men and women.��

Amazon is a marketplace that is becoming increasingly popular with Swedes, featuring among the three best-liked e-commerce companies for the first time in 2022. Apotea still ranks first, with Zalando second. Consumers clearly enjoy what Amazon has to offer; in September 2022, Amazon Prime Video became the most downloaded entertainment app in Sweden, with over 40,000 downloads.��

We can see another clear difference between generations here, with younger consumers being more attracted to websites such as Inet, Sellpy and Lyko, with older cohorts preferring Bokus, ICA and Engelsons. This is partly because the age groups consume different products, but also because they tend to buy from different kinds of companies.��

Cross-border e-commerce��

10% of consumers reported that they had shopped online from outside Sweden, and 6 out of 10 of these purchases were from Germany, China and the UK. Germany has seen an increase in online purchases from Sweden, accounting for 32% of online shopping from outside the country, followed by China at 15%.��

Germany is popular not least due to its automobile industry, affordable spare parts and accessories, which make up a significant share of the imports.��

Danish e-commerce has also grown in popularity in recent years; the plus points for the Danes are in furniture, design products and toys.��

Basket abandonment remains a problem for e-commerce��

Almost 8 in 10 online shopping baskets (77%) are abandoned without a purchase being made. The reasons for this vary between age groups, with window shopping – using your basket merely as a shopping list – being the most common reason among the young, and the lack of a preferred payment option, as well as the need to register an account, the most prevalent reasons among the older age groups.��

Adding more payment and delivery options is one simple way to reduce basket abandonment. Convincing those who use the basket as a shopping list to take the next step is more difficult, but can potentially be done with the help of an effective special offer or some other incentive.��

Good user experience (UX) design, preferably in the customer’s native language, is also extremely important. 97% of respondents mentioned “Good, clear information about products” as an important factor when deciding who to purchase from. 94% mentioned “Easy navigation” and 93% “Good search function on the website”. Having to guess or click around will not encourage these potential customers to complete a purchase on your website.��

Say goodbye to cookies��

For the up to 10% who abandon their basket or the 71%(!) who are put off altogether by having to register an account, guest purchasing options can be an easy solution. However, note another trend that is on the rise: no more cookies – and we’re not talking about curbs to your diet. There has long been a discussion around cookies – the small text files that websites store on a user’s computer to remember selected settings and preferences, used by third parties to collect data about users – and how this is squared with privacy concerns.��

Google plans to phase them out by 2024 and Safari and Firefox already block many third-party cookies as it is. The conundrum is, if you can’t use third-party cookies and as many as 7 out of 10 consumers do not want to register before they buy, how do you collect their details so as to build a relationship with them and send them relevant offers?��

One solution could be to offer special advantages – rebates, free delivery or similar – in exchange for their registering on your website.��

Opportunities for e-commerce in Sweden��

It is clear from the tendencies and trends we see in this report, corroborated by data from other sources, that e-commerce has a well-established presence in the Swedish market, and that there is significant growth potential to tap into as an online business, or a business with an online presence, for those retailers who can speak to the hearts and minds of the Swedish consumer.��

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There’s no doubt that you want users not only to click on your app or visit your website, but also to stay for a while and respond to the products or services on offer. If this is the case, you need to have a UX that works for the user – and that means one that works differently for different people in different places. Read on to find out how you can build on the best practices in UX localisation to thrive on cultural differences and drive business your way.

The key UX localisation challenge��

Since the first 500 apps for smartphones were released by Apple’s App Store in 2008, the market for apps has exploded, with 8.9 million apps globally by 2020 and 40% of spending in the Chinese market. Another two million apps were launched in 2021 alone.

E-commerce has generally grown over the same time period: there are now more than five billion internet users world-wide, with e-commerce generating an estimated USD 5.7 trillion of revenue in 2022. Consumers spent 3.8 trillion hours on mobile devices and USD 320,000 every minute through apps in 2021, an increase of 20% on 2020.

Plan for UX success��

In the wake of this, a new discipline has emerged: User Experience (UX) design, which embraces not only the functionalities of an app or website, but how the user interacts with these and how well they succeed in making the user want to stay online and use the product or service that you are trying to sell them.����

What is UX localisation?����

A simple working definition of UX localisation is the adaptation of the user experience to local expectations in terms of language, culture, norms and formats, as well as offering products suited to the local audience.����

Using best practices in UX localisation can increase your conversion rates fourfold while making users more engaged, satisfied and therefore more likely to return – this matters because 9 out of 10 users are , app or other software-based interface after a bad user experience.������������

UX design��

Localised UX works best when adaptation has been at the forefront of the UX design process. It’s easy to get caught up in the excitement of the user interface and all the wonderful functionalities for users of an app or website but forget that unless the page or app loads in three seconds, more than half of visitors will not stay to enjoy the party. What’s more, the remaining half are 62% less likely to come back and interact again if they have had a negative brand experience on your app or site.������

A functioning UX – and therefore a well-localised UX – is absolutely key to winning in the marketplace and ensuring that the return on your UX investment is as high as it can be.����

Indeed, the value of UX design became apparent to the entire world in November last year, when Adobe acquired Figma – a platform for visual communication design – for USD 20 billion. ��

Key UX challenge��

Not every company has the luxury of having a localisation owner to draw up a plan and a strategy for them – at least not at the time that they need one. But in this article, you will learn about best practice and some key considerations for preparing to take the next step in localising your user experience.��

Plan for internationalisation ��

As in the old joke where a tourist asks a local for directions, and the reply is “If I were you, I wouldn’t start from here,” ����’s always best to design your UX with a global perspective in mind. For example,it is much easier to structure your original UX, which is most likely in English, in a localisation-friendly way if you have built it with translation and local adaptation in mind.������

For start-ups with global ambitions, this is second nature, but even well-established businesses can design their apps and websites in a way that makes them localisation-friendly or tweak existing content where needs be.��

User interface elements��

The question that we need to ask is: what does the user experience upon opening your app or website? What are the menus like? How does navigation work? How are the forms laid out? In short, how do all these UI elements feel and behave for the user? Will a Spanish user find it easy to enter their surname? (In Spain people have two surnames, one from the father and another from the mother, but in everyday usage only the first one is used. However, in English speaking countries, the very last name is usually taken to be the surname).��

If users are left confused or having to navigate back and forth to guess where something should go, where it is or how it works, they are far less likely to continue using the platform.����

Currencies and numbers����

One element, or rather elements, to reckon with are units of currency and measurement. Whether you make sales in dollars, pounds or euros, you will need to take the target market’s preferred currency into consideration.����

In some cases – most notably B2B sales – sticking to one international currency can make sense. But if you are selling to private consumers or small businesses, their ability to see prices in their own chosen currency !������

Current currency��

The two most common methods for stating local prices on apps and websites are dynamic currency conversion (DCC), which is regulated by Visa and Mastercard, and multi-currency pricing (MPC).����

The former is linked to a foreign exchange system that automatically localises the prices, whereas the latter requires the seller to set different prices in different markets. The advantage of the latter is that it can also be used with alternative payment methods (APMs) such as iDEAL, UnionPay or Przelewy. ��

Local payment methods contribute to a customer’s confidence and the fact that you have made an effort to cater to their local requirements is unlikely to be a bad thing from their viewpoint. Stripe may be a very convenient and global tool for payment, but across Scandinavia, Klarna or Vipps are more commonly used, so it would make sense to incorporate these into your localised e-commerce pages if you are targeting those markets.

Units of measurement����

However, being on the money with currency is not enough. Although currency is extremely important if the consumer gets as far as considering a purchase, remember that a large proportion will drop off long before this step if they are annoyed by other aspects of the UX.������

For a European, this could come in the form of confusion caused by the increasingly ubiquitous American date format, where the month comes before the day. Additionally, many non-British Europeans struggle with the AM/PM system – ����’s not always obvious that Ante Meridiem and Post Meridiem should mean that a meeting booked in at 12am will become a midnight rendezvous rather than the intended lunch meeting.����

“Britain has everything in common with America nowadays, except, of course, language”. ��

Americans may perfectly understand the use of Fahrenheit rather than Celsius, and gallons per mile may also be obvious to them, whereas a consumer in the Nordics or on the European continent would struggle with all of those. Add to that the fact that an American gallon is different from a British gallon, and you can see how careful you need to be to create a truly localised user experience that is not going to annoy or confuse people in different parts of the world – as Oscar Wilde said, “[Britain has] everything in common with America nowadays, except, of course, language”.��

Phone numbers and addresses����

Has it ever annoyed you when you were asked for the “zip code”? It’s not so bad if you can enter your postal code using your own country’s system, but wouldn’t it make sense if the request changed according to where you are in the world? ·��

Data encoding – ASCII vs Unicode��

A technical aspect that is worth thinking about is the difference between Unicode and ASCII, which are the two most common character encoding standards in use all over the world. Unicode can support a larger range of characters whilst ASCII can be considered a . Unicode is said to have to application developers, not least reduced time-to-market for localised products. Make sure that the character encoding you end up using will support your internationalisation strategy.����

The font of wisdom��

Fonts can matter in unexpected ways when localising a UX design beyond being clear and pleasant to look at: some languages, for example German and in some cases the Nordic languages, use more characters than would be used for the same words in English, and using a font that takes up less space on the screen whilst remaining clear and legible can enable you to have a unified style by using the same fonts even as the interface language changes from one to the other.����

A simple command such as the seven-character “Restart” can require 13 characters and 3 words in Norwegian: “Start på nytt”. Will it fit, especially on a small smartphone screen? Japanese or Chinese characters may need more vertical space, so if you are moving into those markets, that must also be allowed for.��

Localised characters��

In addition, some languages use characters that do not exist in all English-based fonts. This could be the Scandinavian letters of Æ, Ø and Å, or the special characters used in many European languages, such as the cedilla, the little “tail” added on to the “C” in “façade”, or the caron, the little “hook” on top of some letters, such as “ǎ”.��

The challenge when carrying out localisation is that if your original text uses a font that does not support such characters, you may end up asking us, as one client did, whether we could simply avoid those characters when translating. As these characters can often make up about a third of the letters in the target language, the answer to that question is very likely to be “no”. In the case of our client, the font had to go, but you can ensure that your font is a “web safe font” from day one by consulting .����

What’s left is right��

Make sure that your UX is easily adaptable for languages that read from right to left (RTL) – most notably Hebrew and Arabic, though there are also others. This can not only have ramifications for buttons and text boxes, but also for scroll-down menus that open on the “wrong”, i.e. left side of the screen, meaning that the text has nowhere to go except either beyond the edge of the screen and be truncated or wrapped up so much as to be difficult and awkward to read. Creating a right-to-left design and then changing it to left-to-right is certainly not a smooth process, so it is best to consider this in the early design stages.������

It is, for example, . Phone numbers and time formats are not read from right to left, whereas action progression is, which means that Image A Image B becomes Image BImage A, but 10:15 is still a quarter past ten, not ten past three in the afternoon.��

Avoid hardcoded text����

Hardcoding tends to be a quicker method for an interface to get its data, but can be compared to a knitted jumper where the data is knitted into the pattern itself. It is very difficult to replace such data with the data suitable for another country or language group, for example. Softcoding can be attached to various sections of the jumper’s pattern – or coding – and as such make it easier to change. , but if you wish to be prepared for localisation, softcoding is the safer option.��

�ٴDz�’t string it out��

It is one thing to write UX for a strictly English-speaking audience (keeping in mind what we said above about the differences between the various “flavours” of English around the world), but when UX writers are designing with a global perspective in mind, they need to balance the potential user’s goals with the company’s needs. You may need to include certain information, but you should avoid overly wordy or colloquial forms of�� English , as this can make it difficult to translate into natural sounding text in other languages.����

Words with double meaning����

And that also goes for ambivalent phrases – English is full of business jargon that can mean different things, such as “takeaway” (fish and chips or key lessons?) or “seamless”, (woven cloth or easily integrated?). Of course, an experienced translator will be familiar with how these expressions are used differently in different settings, but shorter strings can sometimes be almost impossible to translate unless the linguist is given reference information and an explanation as to where the text will go and what it is for. For example, does it refer to an action button or the name of an item? “List” can be the action to list something or the name of a tab containing a list.����

Images that speak to the culture����

It’s often claimed that a picture is worth a thousand words. In that case, let’s make sure that those words are not offensive to the people you wish to woo. Some find dogs cute, for instance, but in some cultures ����’s an unclean animal. Alcohol consumption is not equally acceptable in all cultures.����

Images need to follow the local culture of the locations that the app is being used, and one way of ensuring that images are appropriate is to consult with people from your target areas to gauge their reactions to different imagery.����

The music and podcast app of how this can be done by using a variety of models to present the same basic message in different culturally appropriate ways.��

Colours and symbols����

Did you know that colours can have different meanings across cultures? For example, Japanese people associate the colour white with mourning, while many Asian countries associate red with good luck. This is why Uber went to considerable length in ensuring that each country has a colour palette of its own, that had positive connotations in the respective country.��

The same level of effort must be applied for ensuring that symbols say what you think they do in the target culture – emojis, for example, can have a wide variety of meanings depending on where in the world you are.��

Products are local too��

It is one thing to localise the ways in which content is presented, or in other words how you offer your product or services. But UX localisation also requires the tailoring of the products and services you offer so that they are as suited to the needs and demands of the local people as possible. In 2017 Ctrip bought Trip.com and to offer unique services relevant to the customer base in the respective target areas.��

A plan for going global��

A good plan for going global with your software or application includes the localisation of UX design. To succeed in this, it is instrumental to work with experts in the local culture of the market you are targeting, to know the needs of the market you are seeking to serve, and to take a trans-creative approach – working closely with the translator – where both the content and the user interface are re-shaped in a way that localises not just words but the customer’s experience.��

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At some point, most of us will have been surprised at the amount of packaging certain items arrive in, and perhaps even been annoyed at individual pieces of fruit tightly wrapped in shrink-wrap plastic; our nails as well as the environment paying the price for it. Now, in a tightening of the rules, the EU Packaging Directive has been amended to make producers think not only outside the box, but without the box altogether.��

Uniform diversity��

Making slight changes to the rules on the recycling of waste packaging could potentially give some countries a competitive advantage and enable insight from the experience gained from different approaches, although it also risks creating divergence in the approach to dealing with packaging waste across the Single Market. The Packaging Directive 94/62/EC, or to give it its full name, the European Parliament and Council Directive 94/62/EC of 20 December 1994, seeks to remedy this, and the latest amended version, which is now in force, will have ramifications for businesses who reside or trade within the European Union and EEA countries.��

Harmonised recycling��

There are two main justifications for the EU Packaging Directive:  

Firstly, the “harmonise” packaging regulation – i.e. to enforce a uniform approach within the internal market – because, as it claims, “…discrepancies create legal uncertainty for businesses, leading to lower investment in innovative and environment-friendly packaging and new circular business models.” There is no evidence quoted to support this, and indeed the opposite might just as likely be the case, but for businesses this approach does at least provide a degree of certainty for planning. 

The second main justification is the environment; in particular, the need to use less natural resources and to deal with the recycling and/or disposal of the waste product after the first-time use of an item of packaging. The Commission claims that “[packaging] is one of the main users of virgin materials (40 % of plastics and 50 % of paper used in the EU is destined for packaging) and accounts for 36 % of municipal solid waste.”�� The regulation seeks to play its part in fulfilling the European Green Deal 7 and contribute to the so-called EU circular economy action plan.

Reducing packaging waste 

“The specific objectives are: (i) to reduce the generation of packaging waste; (ii) to promote a circular economy for packaging in a cost-effective manner; and (iii) to promote the use of recycled content in packaging.” 

Since the implementation of the original regulation in 1994 there have been several amendments and updates – such as the Plastic Bag Directive in 2015 and an amendment to reduce packaging waste in 2018. The current amended version from November 2022 significantly increases the responsibility of business to prevent packaging waste and encourage the promotion of reuse, recycling and various other methods for putting old packaging to use rather than adding it to the mountain of rubbish generated by our consumer society, or :  

Why amend it now? 

In its justification for amending the regulation, the EU Commission writes that the usage of packaging has increased disproportionally compared to the growth in the economy over the past few years. In other words, the use of packaging is growing at a faster pace than GDP. 

They do not speculate as to the possible reasons for this, although it seems obvious that the dramatic increase in home delivery services and e-commerce is at least partly to blame. After all, who hasn’t got an anecdote about a small item being delivered in a large box with a smaller box inside, with lots of filler-material to keep it safe, and with the item itself ensconced like the fragile egg of some rare bird inside a box inside the box; a veritable matryoshka doll. Many would probably welcome a slimline variant of this. 

What does it mean for businesses? 

The is “all packaging placed on the European market and all packaging waste, whether it is used or released at industrial, commercial, office, shop, service, household or any other level, regardless of the material used.” 

The EU Packaging Directive includes a variety of very detailed targets for member countries to reach, such as the recycling of 65% of all packaging by 2025 and 70% by 2030. But a key point for businesses to notice is section (93) of the amended regulation, which states:  

“To implement the polluter pays principle, it is appropriate to lay the obligations for the management of packaging waste on producers, which includes any manufacturer, importer or distributor, who […] makes available packaging for the first time within a territory of a Member States on a professional basis under its own name or trademark.” 

So, whether you make and sell or import goods to any country within the EU and EEA, you count as a “producer” of packaging if your operations introduce a new bit of packaging to the merchandise, and you take on the responsibility for what happens to this packaging throughout its lifetime. This is called extended producer responsibility (ERP) in the regulation and includes “…the rule that financial contributions to be paid by producers to comply with their extended producer responsibility obligations…” based on “the recyclability performance”.  

Labelling and languages 

Most businesses who trade within EU and EEA countries will be aware of the various requirements for labelling and in some cases for instructions and user manuals to be produced in languages that can be understood in all the countries where the products are traded, such as Directive 42, which says, “All machinery must be accompanied by instructions in the official Community language or languages of the Member State in which it is placed on the market and/or put into service. The instructions accompanying the machinery must be either ‘Original instructions’ or a ‘Translation of the original instructions’, in which case the translation must be accompanied by the original instructions.”&�Բ�����; 

Similarly, the Packaging Directive also sets out certain requirements for the labelling of packaging.  

A declaration of conformity, stating that the packaging fulfils the requirements set out in Articles 5 to 11 must be made, and “…shall be translated into the language or languages required by the Member State in which the packaging is placed on the market or made available on the market.”&�Բ�����; 

Looking more closely at the mentioned Article 11 we also find the requirement that “…packaging is marked with a label containing information on its material composition in order to facilitate consumer sorting.” The regulation stipulates various detailed instructions for member countries on how the markings on the packaging must be coordinated with the waste disposal units and a tracking system with the use of QR codes and consumer instructions used to monitor the exact level of recycling of the packaging. The data from this will have a bearing on the financial liability of the “producer”, i.e. the business who introduced the particular packaging to the market. 

All wrapped up 

It is clear that if your business introduces new packaging in the process of bringing your product to market, you may be in line for increased liability depending on how much further this system goes than what is already in existence in your country (Sweden, for example, has the , which will fulfil some of the requirements of this amended regulation already). 

It remains to be seen if businesses will indeed start thinking without the box as well as outside it, and if our fingernails as well as our paper bins will be happier as a result. 

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The ongoing war in Ukraine has not only set formerly neutral Finland and Sweden on the path to NATO membership, the fighting and sanctions against Russia are also impacting the Nordic economies – but ����’s not all negative. 

Shared challenges 

While we should always remember that the war is first and foremost a human tragedy with civilians and soldiers dying every day, it is also important for businesses to see how this ongoing crisis translates into new challenges and opportunities.  

It’s clear that the initial impact of the conflict, which has interrupted supply lines and production and has entailed additional severe economic sanctions on Russia, has been mostly negative, not only for the countries close to the conflict zone, but to anyone who has conducted trade with the warring countries. 

The Nordics have faced many of the same problems seen in other European countries in the wake of the invasion in March of last year, but to a somewhat lesser extent. The Nordic countries’ economies are better placed in terms of energy supplies: Norway has large deposits of natural gas in addition to hydro power, and Sweden and Finland have a substantial nuclear power sector, with respectively. Despite lower inflation rates in the Nordic region, the rise in the price of gas has impacted businesses of all sizes, according to a . Together with the rise in the price of raw materials, it has led to inflationary pressures which in turn means that interest rates cannot be reduced, , Chief Analyst with Danske Bank.   

Here we’ll look at some challenges and opportunities for the Nordic countries that have arisen since the outbreak of the war in Ukraine. Has the Nordic market, traditionally resilient and with high purchasing power, picked up some of the slack from reduced trade with Russia? How has the Nordic region been able to cope with reduced imports and exports from some of the warring countries, which have been interrupted either by sanctions or supply-line problems?  

The Norwegian approach  

In the midst of the talk of crisis and cataclysms, one country is quietly profiting from the higher energy prices: according to an , Norway’s revenue from the sale of oil, gas and electricity has increased from $50 bn to $200 bn a year.  

However, due to depleting water stores, private consumers and businesses have had to pay more for their electricity even within Norway, something that is highly unpopular among the general population and has caused issues for some of the heavier industries that depend on cheap electricity to maintian profitability. Still, Norway’s willingness to sell gas has helped European countries to overcome their dependence on Russian gas. The is that some of this surplus should be put towards the “green transition”, something that could lead to opportunities for businesses involved in this sector. The political will to push “green” innovations has already been demonstrated by the huge subsidies given to those who have purchased electrical vehicles – financed, perhaps ironically, by high tax revenues from the sale of oil and gas.��

Titanium ore, which is used in the aerospace, aviation, automotive and medical industries, is another raw material where supply is being interrupted by the conflict. Until 2019, Ukraine was the , but this has since changed. In 2021, Norway became the second-largest mine producer of titanium in Europe, with an output of 220,000 metric tonnes. For those businesses that depend on or trade in this metal, Norway could represent an important alternative resource as the war drags on. 

A report from The Confederation of Norwegian Enterprise (NHO), which looks at the consequences of the war for Norwegian businesses, acknowledges that there will be challenges, particularly in the short term, yet has an optimistic tone for the longer term, stating that “Europe is trying to decouple from Russian energy. This will mean and Norwegian businesses, as a big supplier of oil and gas as well as for example a producer of minerals and metals.”  

The war has had a negative influence on��the attitude of travellers. According to a for Innovation Norway, where 4,646 potential travellers were asked about their travel intentions, more than half of the respondents said they have been influenced in a negative way by the price rises and insecurity. Families with children are those most affected by the price hikes, whereas consumers over the age of 50 and those with the highest incomes have been least affected.��

However, in in Europe, Sebina Stegavik, Head of Communications with Visit Norway, said that tour operators are reporting a strong interest in and a high level of booking of trips to Norway because ����’s seen as a “safe destination”. Generally, destinations that can be reached from mainland Europe by car are, according to Ms. Stegavik, attractive, and even American tourists perceive Norway to be far away from the conflict zone, although it does share a few miles of border with Russia in the extreme north. 

Danish durability 

Prior to the conflict, trade with Russia and Ukraine was not a huge part of the Danish economy. In 2021, amounted to DKK 15.1 bn while imports came to DKK 17.7 bn, which were 1% and 1.3% of total exports and imports respectively⁸. The with Ukraine are even lower at DKK 4.3 bn for exports and DKK 2.2 bn for imports. As such, the interruption of trade with these countries will not impact severely on the Danish economy according to expectations from a survey carried out by the Danish business organisation, Dansk Industri. Apart from the general price increases – especially for energy and raw materials – Danish businesses have mostly been affected by the interrupted supply chains of raw materials. Semi-finished iron and non-alloy steel exports from Russia, which are now subject to EU sanctions, are especially important for Denmark, which sources 99% of its imports of this material from Russia. ��

As the states, “Denmark is a small, open economy, and if for example the German car industry cannot get raw materials delivered from or sell to Russia and Ukraine, the demand for Danish industrial products to be used in the German car industry will as a consequence also be reduced.”

However, the Chief Analyst for Danske Bank, Arne Lohmann, says that the Danish economy is fundamentally sound, that Danish businesses have good liquidity and reserves to weather the storm and many consumers have amassed savings after the lockdown periods. 

In addition, 42% of Danish businesses in the industry sector suffered from a l, but this was reduced to . Over the same time-period, Denmark had integrated more than 5000 Ukrainians into their economy, meaning that nearly half of all Ukrainians living in Denmark were in employment.  

Sweden consolidates 

For Sweden, the most significant event following the Russian invasion of Ukraine was the fact that the country decided to opt against neutrality, applying for NATO membership alongside Finland in 2022, despite having remained outside of the organisation since its founding in 1949. 

As with Denmark, Swedish foreign trade with Russia has not constituted a large percentage of the country’s overall foreign trade. The year before last, only 1.4% of exports and 1.2% of imports were to or from Russia, whereas the with Ukraine were 0.3% and 0.1% respectively according to the official Swedish statistics office (Statistikmyndigheten).  

However, there are certain . Between February and March 2022, imports of timber, furniture, bed clothes and machines decreased by 54%, while exports of agricultural machines, paper and vehicles shrunk by as much as 81%, according to the National Board of Trade Sweden (Kommerskollegium).  

Generally, the challenges facing Sweden are similar to those Denmark grapples with, except for the fact that Sweden has a substantial nuclear power sector, which creates a certain buffer against increased gas prices. Indeed, in 2022 , exporting 16 terawatt hours (TWh), with most of this going to Denmark and Finland. ��But like Denmark, Sweden also feels any on the continent strongly, as three quarters of her exports, which came to SEK 1,628 bn in 2021, go to European countries.��

Finland finds strength 

Like her neighbour to the west, Finland has a substantial nuclear sector, which certainly helps, and the country also decided to join NATO. Nevertheless, the Finnish finance ministry put out a press release last year where they predicted a slowdown in Finland’s economic growth of1.5% last year, 1.7% this year and 1.5% in 2024. This is mainly due to the r, which has almost ceased altogether, according to the press release.��

Additionally, Finland has historically been more dependent on trade with Russia than her Nordic neighbours. For instance, Finland relies on nickel imports from Russia for a plant belonging to the Russian company Nornickel (Norilsk Nickel), which primarily delivers inputs for EV 6 batteries (the German BASF SE battery company has a long-term agreement with the company).  

In addition, Finland imported 82% of its crude oil from Russia, one of the highest levels in Europe, and close to 40% of its natural gas. Likewise, Finland, together with Estonia, has been among the European countries most dependent on Russia for supplies of fertilisers. 

In a speech in January of this year, the head of Finland’s central bank, Olli Rehn, laid out the challenges, not least the depressing effect on the economy of the sanctions and interrupted supply lines. 

He did say, however, that as far as Finland is concerned, employment levels are still very high – as a matter of fact, there is a dearth of labour, especially in the health and care sector. This has kept households’ purchasing power relatively strong and meant that there are employment opportunities for those who wish to live in the land of the Moomin.  

The pointed to the importance of innovation for the Finnish economy, something we see examples of in the KvarkenSat project, a cooperation between ten Swedish and Finnish universities and research institutions, to launch a mini-satellite that can be used for the monitoring of eco-systems, such as forests, fields, oceans, vegetation, as well as the effects of pollution on these. The KvarkenSat project could have ramifications on business, as its tiny size – that of a 4-pint milk carton and with a weight of only around 2 kilos – means a potentially lower cost and greater flexibility of use. In addition, the Finnish company MetGen won the EU Commission’s Innovation Award 2021 for their ecologically sustainable fibre-based packaging, which is able to replace petro-chemical materials in packaging. 

Iceland remains strong 

The island state sees many of the same challenges that we have mentioned across the Nordic region: higher commodity and energy prices, and interrupted supply lines. But given that Iceland is as much a commodity exporter as an importer – as pointed out in a report by – the effect of the higher prices could be more or less neutralised. 

Iceland’s exports to Russia, Belarus, and Ukraine –mainly fish such as capelin, herring, and mackerel – accounted for 2% of Iceland’s total exports in 2021, or around 20–25 bn. ISK.  In terms of value, about 5% of total marine exports go to these countries, but Mr Bentsson expects that exporters of fish will be able to find new markets for these products without too much difficulty. 

Generally speaking, the Icelandic economy has not had wide exposure to Russia nor to Ukraine, so the effects of the war have been mainly indirect. 

Nordic resilience  

The Nordic consumers are less affected by the conflict between Russia and Ukraine than those in many other European countries. That means that selling to the Nordics will still be an attractive prospect for businesses. There are also powerful opportunities for those enterprises that can replace Russian businesses either as a supplier or a buyer in the months and years to come. Whatever the outcome of the ongoing war, sanctions on Russia are not expected to be lifted – especially not those that were in place before the invasion.  

The Nordics are still very much open to business and a safe and stable area to trade with. 

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