The Swiss retail sector is experiencing significant disruption due to the financial impact of Chinese online platforms, particularly Temu and Shein.
Local retailers are estimated to be losing CHF1 billion ($1.14 billion) annually, with potential total losses reaching CHF3 billion. This competition primarily affects retailers in the low-price segment, while those in higher price segments are less vulnerable.
Despite these challenges, the future of Swiss online commerce is expected to continue growing, with a 10% expansion observed over the past four years. Social media platforms, especially TikTok, are emerging as powerful sales channels, and social commerce currently accounts for 10-15% of Swiss online commerce. This figure is anticipated to rise to approximately 25% in the near future.
Hybrid shopping, which combines online and in-store purchasing, is also gaining popularity in Switzerland. Consumers often research products online before visiting physical stores to make a purchase. Retailers must adapt their strategies to provide a seamless experience across both channels.
As the Swiss retail landscape evolves, businesses must focus on enhancing the customer experience, leveraging social commerce, and finding ways to effectively compete against low-cost competitors.