Switzerland’s floating exchange rate drives up cross-border e-commerce

Switzerland is a microcosm of cross-border e-commerce, with its multi-cultural population (German, French, and Italian speaking), non-European Union customs and taxes and unique payment preferences – all wrapped up in a country that’s smaller than most U.S. states. But it’s complexity and small size hasn’t prevented the Central European country from developing one of the strongest appetites for cross-border shopping in the world.

A whitepaper released by Asendia, a joint venture between La Poste and Swiss Post, found that, as prices rise in Switzerland, its population will increasingly look abroad for their shopping requirements.

Switzerland has always been an expensive place to live, but when the Swiss National Bank abruptly ended the fixed exchange rate between the Swiss franc and the euro in 2015, that disparity ticked up. Depending on the currency in which they were paid – many Swiss and E.U. residents working for multinationals based elsewhere are paid in euros or other currencies – residents saw their buying power rise of fall, prompting a dramatic shift in spending habits.

Asendia, which handles distribution of international mail and parcels, says that e-commerce’s share of retail in Switzerland will double to more than 10 percent by 2022, in large part due to the increasing value of the franc relative to other currencies. The company says that conditions are ripe for retailers to expand their e-commerce business in Switzerland. The package delivery company recommended that e-retailers take the following steps to gain a foothold in the market:

• Make sure all goods and services are cleared with the Swiss Customs Administration (facilitated by Swiss Post). Custom duties are charged by weight, which is unusual compared to other countries.
• Adhere to Swiss postal clearance rules requiring minimum integration and upfront investment, which is ideal for small businesses. The country has a commercial clearance guarantee, ensuring that there will be “no additional costs for shoppers on delivery” and enabling “bulk clearance for large volumes.”
• Offer pricing in Swiss francs and be locally registered to increase consumer’s trust.
• Provide electronic goods with a Swiss approval mark and a manual in German, French and Italian.