Latvia has three major ports (Riga, Ventspils, and Liepaja) as well as a major airport in the capital city of Riga, which has become a transportation hub. Latvia is well connected via railway, which runs largely east-west, to former countries of the Soviet Union. Rail Baltica, a proposed north-south rail corridor that would link Estonia, Latvia, and Lithuania to the rest of Europe is in the planning phase with an expected completion date of 2026. Riga is the major distribution center for the country.
Latvia has similar distribution and sales channels as other EU countries. The Latvian Traders Association is the official national representational organization for retailers operating in Latvia. There are no laws in Latvia that regulate the relationship between a foreign company and its distributors or agents in Latvia. A distributor relationship can be terminated according to the provisions stipulated in each specific distributor agreement. EU legislative acts regarding this subject have been incorporated into local law.
A common practice is to appoint one distributor/agent to cover the entire country, or the entire Baltic region (Estonia, Latvia, and Lithuania). Due to the small size of the Latvian market, one importer may carry products from several industry sectors.
Electronic commerce (e-commerce) is growing rapidly in Latvia, providing real opportunities for foreign companies. According to recent official data, 46 percent of the Latvian population made online purchases within the past year. Many Latvian companies, including airBaltic and most local banks and insurance companies, have created incentives for customers to use their services exclusively through the Internet.
Distribution channels in Estonia are similar to those in Latvia. Goods may be sold through an agent, distributor, established wholesaler, or by selling directly to retail organizations. Businesses and most logistic services are concentrated in and around Tallinn.
Estonian Traders’ Association is a non-profit voluntary organization bringing together retailers with common interests, to solve different problems and represent members in various institutions in Estonia and abroad. The association has 56 members who are all retail and wholesale enterprises.
One exclusive agent/distributor is usually appointed to cover the entire country. Estonian importers often represent several different product lines. In selecting a representative, the exporter should check whether a company handles competing products.
A wide range of EU legislation impacts the direct marketing sector. Compliance requirements are most stringent for marketing and sales to private consumers. Companies need to focus on the clarity and completeness of the information they provide to consumers prior to purchase and on their approaches to collecting and using customer data.
Many foreign investors believe that Lithuania has the best road infrastructure in the Baltic region. With a population of less than three million, the country’s international airports and good rail and road networks permit transport of goods in all directions.
Lithuania is among the leading countries of the EU in information communications technologies and is ranked first in the World Competitiveness Rankings for communication technology. In the EU, it has a leading position in the number of people aged 16 to 24 who have gained ICT skills through formal education. Lithuanians are proud to have the fastest download and upload speeds in the EU. Lithuania takes first place on the continent for density of network of public internet access points. The most modern ICT technologies (EDGE technology, mobile WiMAX 4G Internet, 3G mobile communications infrastructure, etc.) are fully implemented and used throughout the whole country.
Over the past decade, the Lithuanian economy has gradually improved its position in the mostly free category. GDP growth has moved along smartly as well over the past five years, reflecting one of the Eurozone’s most robust economies. A majority of product distribution and sales in Lithuania is carried out by private distribution networks, which hold simultaneously the function of importers, wholesalers, distributors and retailers. Large-scale retail is without doubt one of the most thriving sectors in Lithuania and major brands in the industry are owned by national companies.