The Baltic region (making up Latvia, Lithuania, and Estonia) is a collection of vibrant and growing markets filled with untapped potential.
As a global company, you might be looking at the Baltic markets and asking if moving into them would be a good move for your business.
By tailoring your products, services, and content to resonate with Baltic audiences, you will increase success in these similar, but distinct, Eastern European markets.
In this guide, you'll learn about the commonalities and differences between the Baltic markets and how to adapt your localization for more successful sales.
Let's get started!
Market overview: What you need to know about the Baltic region
The Baltic region comprises 3 markets: Latvia, Lithuania, and Estonia. These three markets are often grouped together and viewed as a unified economic region
due to their shared geography, weather conditions, and history. However, there are some key differences between them, especially when it comes to language and digital engagement.
The combined population of the
Baltic states stands at 6.1 million — a significant potential audience for global businesses.
Located in Northeast Europe and lying along the shoreline of the Baltic sea, these markets offer a myriad of opportunities. These three countries are members of the European Union (EU), Organisation for Economic Co-operation and Development (OECD), World Trade Organization (WTO), United Nations (UN), and North Atlantic Treaty Organization (NATO).
Digital adoption in Baltic: GDP and demographics
The Baltic markets represent a highly connected region that is rapidly adopting digital technologies.
With internet penetration as high as 85% in Estonia, for example, it's clear that the
digital lifestyle has become the norm for much of the population. Over 75% of all individuals in the region connect to the internet daily.
These promising trends, coupled with the pro-business governmental policies, mean that the Baltic digital markets offer a lucrative opportunity for global businesses.
What languages are spoken in the Baltic region?
The Baltic region is linguistically diverse. There are three core languages (Estonian, Latvian and Lithuanian) but also many minority dialects. In order to penetrate the Baltic markets you should localize into all three core languages.
Latvian and Lithuanian are classed as
"Baltic languages" as they share a common root as the only surviving languages within the Baltic branch of Indo-European. Estonian, by contrast, is unrelated to these other two languages as it has Uralic origins. Despite their relatedness,
the two languages are not mutually intelligible. Some people rate the similarity of Latvian and Lithuanian as being comparable to that between English and Dutch.
5 compelling benefits to doing business in the Baltic region
There are some significant benefits to growing your business in the Baltic region, including:
1. Cutting-edge digital infrastructure
This robust infrastructure not only allows your business to have smooth day-to-day operations. It can also offer you a competitive edge in today's digital-first world, as you can focus on improving your audience's digital experience instead of having to deal with the technology issues that are present in other markets.
2. Business-friendly political environment
The governments in the Baltic region are committed to providing business-friendly environments that support both local and foreign companies. For example, the countries operate
special economic zones that offer tax incentives.
3. Cost-effective, skilled workforce
Reasons for this high-quality workforce include the high level of education and the good foreign language skills (
including English) of workers. The region is also investing in digital skill development to meet the needs of the labor market.
4. Stable economies and investment opportunities
The Baltic markets are among the
most economically free countries in the world. Economically free countries are ranked based on multiple parameters including freedom to trade internationally, business regulations, and legal system and property rights. Estonia and Lithuania rank 12th on this global list with Latvia ranking 25th.
Recognized as a hub of venture capital investment, Lithuania has a vibrant and dynamic business ecosystem. Notable companies include Vinted, Deeper, TransferGo, and Teamgate.
5. Efficient transportation networks
The transportation networks in the Baltic region are also highly developed and efficient.
With excellent road, sea, and air connections, your business can enjoy smooth logistics and easy access to many European markets. Additionally, the upcoming
high-speed rail project Rail Baltica is expected to connect the three Baltic countries to the rest of Europe by 2030.
Compliance and regulations in Baltic markets you should know about
All three countries in the Baltic region are members of the European Union (EU). This means they are subject to EU restrictions and regulations, making it easier to operate in these markets if your business already serves other EU markets.
You might even find that the government provides extra benefits to you as a foreign company,
as is the case in Lithuania where the government has an annual conference for foreign investors and an expanding network of business agents in countries like the United States, Japan, and Taiwan. As mentioned above,
Estonia offers advantages for digital companies once your company has established a branch in the Estonian Commercial Register.
What is the political climate like in the Baltic region?
The political climate in the Baltic region is generally very favorable for global businesses. Each market has stable political infrastructure. The three Baltic states are parliamentary republics and the legislative power lies with a single-chambered parliament. Read more about the political overview of each state here:
Estonia,
Latvia, and
Lithuania.
It is important to recognize that all three markets are influenced by external factors. Although the markets are politically protected as part of the EU and NATO, they are geographically close to Russia. As such, are influenced by factors like events in Ukraine, particularly with regard to the impact on the supply chain. Despite this however, the Baltic states remain committed to growth and continue to experience a visible recovery from recent global challenges.
The 5 keys to successful sales in Baltic markets
How can you improve your sales success in the Baltic markets? Here are 5 keys to successful sales in the Baltic region:
1. Utilize Digital Advertising
Digital advertising ad spending has been seeing a steady increase and is expected to reach 157.9 million USD in Estonia alone. When breaking into the Baltic markets digital marketing is a must.
2. Comply with Direct Marketing Requirements
Direct marketing is a popular approach in the Baltic region and has strict compliance requirements as outlined by the EU legislation. Businesses are expected to
provide clear and complete information to customers before they make a purchase. They also need to comply with data collection and protection laws.
3. Establish a sales office and understand the law
This means that considering localization as part of your market entry strategy is key to setting your business up for success in the region.
4. Build trust and long-term relationships
Focus on long-term foundations rather than short term deals.
In the Baltic markets,
particularly in Estonia, long-term relationships are valued in business dealings. By investing time to get to know your new connections, you can help develop sustainable business opportunities and referrals long into the future.
5. Learn about the business cultures
Take the time and effort to learn about the business cultures in your chosen markets as this will set you and your business up for success.
Where to get further help on moving into Baltic markets
Do you want to explore how you could grow your business into the Baltic market?
Rubric is the perfect partner for any global company who is looking to expand into the Baltic region. Our team of experts has extensive experience localizing content for the Baltic market. We can help you make the move into this lucrative market by streamlining your localization processes.
Contact us today to find out more about our services and how we can help you with your transition into the Baltic states.