The Lahti region is a top location for e-commerce
The logistically excellent location and affordable price level attract new operators
The growth of e-commerce is speeding up. The US market is expected to grow by 50 per cent and the Finnish market by up to 40 per cent over the next five years. This growth is also evident in the Lahti region, which attracts e-commerce businesses with its logistically advantageous location and the affordable prices of storage facilities, business premises and plots. For instance, the department store chain Kärkkäinen is in the process of building 27,000 square metres of additional storage space in Lahti to meet the needs of its webshop.
This expansion of the sales and storage facilities of the Kärkkäinen department store in Renkomäki, Lahti, may bring up to 200–300 new jobs to Lahti in a few years. Another company that has its central warehouse in Lahti is Veke, which specialises in furniture and interior design products.
A great number of products by Finnish furniture and clothing companies and other businesses pass through Alfaroc Logistics in Kujala, Lahti, as well as the Posti logistics centre in Pennala, Orimattila, a 10-minute drive from Alfaroc.
All of the most significant logistics companies in Finland, such as DB Schenker, Kaukokiito and Speed, also operate in the Lahti region. The Lahti Southern Ring Road, completed at the end of 2020, has further enhanced the transport routes in all directions and also streamlined international exports.
Webshop Preeco shows strong growth
Posti and DB Schenker also cooperate with Preeco Trading, one of the forerunners of e-commerce in Lahti. Preeco Trading has a warehouse and runs its webshop from Lahti, selling recreational products.
The company was founded in 2010 by Henrik Viitala, an economics student from Kärkölä who was studying at the University of Oulu, together with five of his friends.
In addition to bean bags, the company initially sold garden furniture, greenhouses and massage tables, among other things.
“At first we only had a couple of product indications, now we have several hundred. Preeco Trading’s business has grown by approximately 30 per cent every year, and we currently also have other webshops operating under it, such as Gorilla Sports, which specialises in gym equipment and gear, and Freddy Store, which represents Freddy clothing. We also own a portion of the business of a couple of other brands,” Viitala says, describing the operations of the strongly growing company.
“Lahti is the best option”
Currently, the webshops and two warehouses run by Viitala and his business partners employ 42 people, and their combined turnover is approximately EUR 19 million.
The company’s office is located on Aleksanterinkatu in the Lahti city centre, spread out on three floors. The warehouse is only a 10-minute drive from the office, situated in the old Lahden Lasitehdas (Lahti Glassworks) building. Viitala is currently considering a new storage solution to replace the company’s storage facilities at Lasitehdas, as they are becoming too small.
“Lahti is comfortable, affordable, just the right size and the best option for us in terms of logistics. The containers arriving at Vuosaari Harbour are delivered to Lahti in an hour, and from here the shipments can be quickly delivered anywhere in Finland. If a customerorders one of our products today, they usually receive it tomorrow. Products can also be exported to Sweden and Russia smoothly from Lahti,” Viitala says.
Viitala also lists affordable housing costs and skilled labour as the Lahti region’s advantages. LAB University of Applied Sciences and Salpaus Further Education carry out great work in training skilled professionals.
“We’ve collaborated with the university of applied sciences. Among other things, we organised an e-commerce course for IT students and then hired some of the students,” Viitanen continues.
Gymstick’s deliveries have a two-hour lead
Gymstick is a Lahti-based company that grew from its own fitness tool innovation (also called Gymstick) into the largest fitness brand in Finland. The company set up a webshop in 2015.
“We set up a webshop to reduce our business risk, as five of our biggest customers at the time accounted for almost 70 per cent of our turnover,” says Mika Lappalainen, Head of Ecommerce at Gymstick.
The webshop started out as an experiment and was then transferred to a new platform a year later, which kicked off the rapid growth of the webshop business.
“Our business is currently divided between the webshop, domestic sales and exports in an ideal way. The webshop provided our business with the additional cornerstone that we were looking for,” Lappalainen continues.
“Our products reach our customers in the Helsinki metropolitan area just as quickly as they would if our warehouse was located in Helsinki.” -Mika Lappalainen
He says that online shopping has moved from computers to mobile devices in the last few years. Because most of the customers use the webshop on their phone, the platform must be reliable and easy to use. The company also wants to deliver the purchases quickly.
Gymstick’s product warehouse is located in Nastola, Lahti. Gymstick’s main partners with regard to storage and logistics are Posti and Schenker. PostNord takes care of the logistics for exports to Sweden.
“Our warehouse is situated in a great location with regard to the terminals of shipping companies. Our products reach our customers in the Helsinki metropolitan area just as quickly as they would if our warehouse was located in Helsinki. We lose nothing in deliveries heading south, but we win time in all shipments delivered north of Lahti, as we have almost two extra hours for picking up the products at our warehouse.”
“We’ve built good cooperation with transport companies and developed our process to deliver the products to customers quickly and efficiently,” Lappalainen praises.
He says that Gymstick is planning to expand its webshop operations, first to Sweden and then elsewhere in Europe.
“The leading Nordic fitness brand – that’s our strong goal for the future,” Lappalainen reckons.
Puine’s business booms online
The Lahti-based Puine is a company that manufactures jewellery and interior design products from birch plywood. The company originally started out as a practice company of three students of LAB University of Applied Sciences.
“We bought a domain and built a webshop by ourselves. We initially offered 15 products, for which we ordered a batch of plywood that we couldn’t afford to pay. Luckily, we received so many orders the very first week that we were able to pay for the plywood and make the products,” Jasmiina Kolehmainen recalls.
Once the company met the income limit set by the Young Entrepreneurship course at the turn of 2017, Kolehmainen, who was in charge of making Puine’s products, decided to set up a real company.
“I rented facilities for the company, leased a laser cutter and actively carried out social media marketing. I’ve never regretted becoming an entrepreneur because the business has been profitable and grown steadily since I first founded the company.”
Currently, Puine employs Kolehmainen and three employees, who are in charge of customer service at a brick-and-mortar store and making the products together with Kolehmainen.
Working in Santa’s workshop throughout the year
In addition to Puine’s own webshop and the store located in Sopenkorpi, Lahti, Puine products are also sold by 21 retailers around Finland and a few more outside of Finland’s borders. The product range includes roughly 150 different interior design products made of thin plywood. The most popular products are plywood cake decorations, different cards and signs.
“Our product inventory is very small, as we primarily make products based on orders. Social media is the most important marketing channel for us. Puine has more than 15,000 followers on Instagram and Facebook. When someone finds our toothbrush holder, for example, and praises it on social media, we quickly receive new orders.”
Puine’s products are made from thin plywood supplied by Koskisen Oy. Kolehmainen makes the products, packages them and takes the packages to a Posti service point on her way home.
“I like all of the work that entrepreneurship involves. It’s always like Santa’s workshop here,” Kolehmainen laughs.