Despite a revenue drop, Zalando remains the largest online retailer in Switzerland. The local online department store Galaxus, now the new number 2, increased its revenue significantly last year. Temu is the only newcomer in the top 10.

This is according to figures from Carpathia, an e-commerce management consultancy. It releases a yearly ranking of the biggest players in e-commerce in Switzerland, with the top 50 of the biggest business-to-consumer stores and the top 15 of business-to-business stores.

Zalando leads the B2C list, with an estimated sales volume of 1.69 billion euros in Switzerland in 2023. This is 100 million euros less than the estimated revenue from the previous year. Switzerland is not unique in this decline: Zalando’s revenue at the corporate level has decreased for two consecutive years.

Zalando lost 100 million euros in Swiss revenue

The second and third positions belong to the same company: Digitec Galaxus. The namesake online stores have switched places: Galaxus, which is also growing rapidly outside Switzerland, now occupies the second place on the list.

Its revenue increased from just over 1.0 billion to nearly 1.4 billion euros, while the revenue of its electronics sister Digitec slightly declined. The revenue gap with Zalando is significant, but if Galaxus continues to grow at this pace, the number 1 position will be within reach very soon.

Temu and Amazon in Switzerland

Newcomer Temu, which has increased in countries including France and Germany, occupies the ninth place on the list of top online sellers in Switzerland. 

The other positions in the top 10 remain unchanged. Unlike in many large Western European countries, Amazon falls outside the top 3 and holds a prolonged fourth place.

Mercanto, Alltron, and Elektro-Material (EM) occupy the top three positions in Carpathia’s list of Switzerland's largest online B2B sellers.

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Starting a business in a different country is never easy. One of the requirements for Switzerland is that you have to be a Swiss resident, or have a Swiss legal entity or have a Swiss partner. It is also essential that you understand the legal structure.

Taxes for online retailers

In order to directly charge the Swiss VAT to Swiss customers, a foreign online retailer will have to be declared as a VAT-registered company in Switzerland. To achieve this, they will need fiscal representation there.

Being registered as an online shop for VAT purposes, without a permanent establishment but through fiscal representation, has the following consequences:

• The delivery is viewed as domestic and is therefore subject to the domestic tax for the supplier.
• The foreign online merchant will be considered as an importer and must pay the import tax accordingly. The standard 7.7% will be invoiced to the domestic customer as it would be for a normal Swiss company.

Value-added tax

When registering for VAT purposes, online merchants must indicate that they will act as an online retailer. They will also have to comply with being published on the list, which avoids complaints and burdens from customers.

Import tax

The standard tax rate in Switzerland is 7.7% at the moment, which is the same as on domestic purchases. Daily necessities, or basic needs such as food, are subject to VAT at the rate of 2.5%.

Import taxes can be claimed as an input tax, under certain conditions, which is the opposite of customs duties. If it is not possible to pay monetary value when importing an item, the import tax will be based on the market value of the product. The day before declaration, foreign currencies will be converted into Swiss Francs at the exchange rate of that moment.

Customs

Every import needs (at least) one invoice, which has to contain the following information: name and address of the exporter and importer, delivery address, place and date of issue, marking, number, quantity and type of packages, net and gross weights, dimensions of the packages, exact description of goods, preferably with customs tariff number, quantity, price, delivery and payment terms and finally,  country of origin.

Essential for import is the customs tariff number, which is used to classify a product. These numbers are established through custom duties, and import duties are determined based on this number as well.

Download the full whitepaper on Swiss e-commerce, taxes and duties below. Read a complete interview with Gerrit Schröder from GJS Consulting in the latest instalment of Cross-Border Magazine. 

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The new click and collect service will be available at 300 branches across Switzerland. The collaboration between the supermarket and Swiss Post is the result of the continuous expansion of Swiss Post. Swiss Post wants to increase the number of access points to postal services throughout Switzerland.

Send and receive parcels at Migros

As a result of the partnership, customers from supermarket chain Migros can now send and receive their parcels throughout the country at around 300 Migros supermarkets. The service will be integrated into the supermarket’s existing PickMup service. PickMup gives customers the opportunity to purchase products from a Migros brand and pick them up in the shop.

Swiss Post sees the supermarket as an ideal partner because of their dense and nationwide network of branches. Thomas Baur, head of PostalNetwork at Swiss Post said “We want to be where our customers are and with this offer, we can totally do that.”

Swiss Post delivered 138 million parcels in 2018

Swiss Post delivered 138 million parcels last year. That is a 6.7% increase in comparison to 2017. At the same time, Migros reached 25.4 billion euros on total sales in the past year and the online sales increased by 7% to 1.88 billion euros. The supermarket chain recently invested 1.3 billion euros in operations, including improving its online and physical shops.

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The company is optimistic about the future. "You can see that in Swiss watch export figures," Christoph Grainger-Herr, CEO of IWC Schaffhausen, told press agency Reuters in an interview. "The Asia Pacific region has recovered and the U.S. also shows a good development." The Swiss watch exports rose with 10 percent in the first seven months of 2018. An increase of 29 percent in their number one market, Hong Kong, is one of the driving factors in this optimism.

The brand collections of Pilot, Da Vinci and Portugieser are part of the IWC group. The focus of the company will remain on export, and investments will be made in e-commerce. IWC has expanded its online boutique to the United States last year and will do so in Europe in September 2018. On another note, the mono-brand stores network will grow with five to ten stores each year.

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Despite the great promise of mobile payment solutions, cash money will remain important in the coming years. There are some Western European countries, the Netherlands, Switzerland, and Sweden for example, where the role of cash money changes the most. This appears from a newly published research by PYMNTS.

If predictions are to believed, the first cashless societies are in the making. A major step in this is the embrace of digital payment instruments. In the near future, a large part of consumers is expected to switch to paying by using their mobile phone. Although this implies that cash money will be used less and less, figures do not indicate this. This is shown by a report from PYMNTS in which it looks ahead over the next five years.

Compared to those Western European countries, the share of cash money in the Netherlands is relatively small. Just over seven percent of the total. There are only two Western European countries where people pay even less by using cash money. These countries are Sweden, where the share of cash is only six percent, and Switzerland, where cash is used in only five percent of all payments.

The fact that the share of cash money is not that big does not mean that cash is disappearing. The payment company that commissioned the report also let PYMNTS look at the actual use of cash. With the growth of economies, the use of cash also increases considerably. The use of cash money will increase with 0.7 percent until 2021 in the fifteen Western European countries. This trend is not equally observed in all countries. In some countries, the use of cash money grows extensively and in other countries, the use of cash is decreasing.The two Western European countries where the use of cash decreases most are Ireland and Finland. As the European Central Bank (ECB) concluded last year, mobile payments are on the rise. However, three-quarters of all payments at European cash registers are still made in cash. 

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The research by Ecommerce Europe indicates that the United Kingdom (€178 billion), France (€93,2 billion) and Germany (€93 billion) dominate the European market, accounting for over two-thirds of the total European e-commerce turnover. Looking at popular websites, it is not surprising to see that Amazon and eBay are dominating the market. The research, however, shows that Alibaba Group is slowly moving in from the Eastern countries.

European Cross-border shopping 
Looking at cross-border e-commerce, Macedonia and Portugal are the countries where cross-border online purchases take place most (both 85 percent), followed by Luxembourg (79 percent), Switzerland (64 percent) and Iceland (63 percent). The fastest grower in the cross-border market is Slovenia (6 percent), followed by Luxembourg, the Netherlands, Germany, and Finland (5 percent) last year. In total, 38 percent of all online shoppers in Europe did a cross-border order in 2017.

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