opportunities and growth in e-commerce for estonian e-⁠residents

Maya Middlemiss • Dec 20, 2024 • 9 min read

When selling physical products, get to know relevant regulations, focus on your product, and find perfect partnerships for the best chances of success

Natural cosmetic products of Phaedra Botanicals OÜ, founded by e-resident Lucie Vidlicková (All Photos courtesy of Phaedra Botanicals)

The global e-commerce sector is experiencing remarkable growth, with digitalisation and cross-border shopping transforming how businesses and consumers interact. In 2023, global retail e-commerce sales of both digital and physical products reached an estimated $5.8 trillion, with projections indicating a 39% increase over the coming years, expected to surpass $8 trillion by 2027.

For entrepreneurs eager to tap into this expanding market, Estonia’s e-⁠Residency programme offers a unique solution. By providing the tools to establish and manage an EU-based business entirely online, e-⁠Residency empowers location-independent founders to access international markets without geographical limitations.

E-commerce thrives on flexibility, scalability, and seamless cross-border operations—qualities that align perfectly with Estonia’s digital-first approach to business. Entrepreneurs like Lucie Vidlicková, founder of Phaedra Botanicals have embraced all that Estonia has to offer, to grow their e-commerce ventures. Her story highlights how this innovative programme makes it possible to combine a global reach with the benefits of a secure, trusted EU business environment.

e-residents Lucie and Nikos, Phaedra Botanicals OÜ company founders

Read about Lucie's e-Residency founder journey

The story of how e-resident Lucie turned her passion for pure skincare into a thriving e-commerce business

Delivering natural skincare across borders

As a skincare brand rooted in sustainability and quality delivered worldwide, Phaedra Botanicals needed a robust yet flexible business model to cater to a global customer base. Estonia’s digital infrastructure offered a great environment from which to get started, as Lucie explained:

“Everything from online banking to digital signatures and streamlined tax fulfilment helps simplify your operations, saving time and allowing you to focus more on growing your business.”

Integrated digitisation offers many advantages to help simplify compliance, especially when trading within the EU. But there’s still a lot to learn, for any aspiring e-commerce entrepreneur, as Lucie points out.

Cosmetics are subject to regulations in many countries, including with respect to ingredients, packaging, and best before dates

“There are many factors to consider, and much will depend on the specific physical product you’re selling, as requirements can vary widely across categories.

“Additionally, national laws may differ, so depending on your product category, you’ll likely need local partnerships or may need to outsource certain aspects based on where you operate.”

She recommends investing the time up-front to really learn and understand the relevant legislation, alongside all the work you need to do to ensure a quality product and delivery partnerships.

Regulations vary at the local country level, even within the EU, and you have to understand exactly what is required.

Read the ultimate accountant's checklist for building a successful and compliant e-commerce business:

An accountant's checklist to starting an e-commerce business

Xolo offers this checklist to help e-commerce entrepreneurs streamline operations, manage finances effectively, and build a strong, sustainable business strategy

Crafting and delivering a unique product

Every business must attend carefully to their growth strategies, and with physical products, the challenges are even greater. For Lucie, the focus has always been on delivering an extraordinary product experience that resonates deeply with customers. She advises new e-commerce entrepreneurs to start locally. Refining logistics allows more energy to be devoted to the most critical factor: the product itself.

After all, you can always scale to deliver internationally once you have established the perfect product and customer fit. Lucie explained:

“It’s well-known, but worth emphasising: a great product is key to building customer loyalty. Satisfied customers become advocates, helping your brand grow organically.”

“We concentrated on creating exceptional products and carefully considered how we present them. We also sought unique ways to add value— providing something no one else offered. For us, that meant launching our Fresh Series, delivering freshly made products directly to customers, and offering selected items tested for environmental contaminants, such as heavy metals. This approach appeals to clients specifically seeking unique products that stand apart from the mainstream.”

SAPPHŌ'S is a brightening and toning gel serum made fresh to order.

Constantly evolving the product, listening to customers, iterating to find the perfect niche and give them exactly what they want - it’s not so different to working with digital products, just a lot more to think about and be certain to get right.

But it’s a rich vein to mine for brand storytelling, and Phaedra’s Fresh Series page explains the product range in vivid detail, to help customers understand exactly what they are investing in when they purchase. Customers can benefit from small batch production, limited orders, express shipping, and products using potent natural botanicals. The customer experience begins on the page, and involves the customer in a unique journey from their selection until the moment they unwrap their shipped physical product, complete with carefully chosen additional samples.

It’s attention to all these details––from the beautiful line drawings of the plant sources to the detailed storage and use instructions––which enable a unique differentiation of the brand in the hugely competitive global skincare market.

But that’s what being an entrepreneur is all about, as Lucie reflects: “Let’s face it: running an online business across borders is a challenging task that will keep you busy. Truly busy.

“You’ll likely love it—there’s nothing quite like it—but you may find yourself working into the early hours, sometimes waking at 4 am and going to bed at 1 am. I don’t say this to discourage anyone; in fact, if you find something you’re passionate about, it’s absolutely worth it. There’s nothing like waking up excited to dive back into your work, a feeling that many people lack today.”

As e-residents like Lucie are often high achievers, there is a need for strategies to maintain work-life balance and boundaries. Read my tips for remote entrepreneurs:

Work-life balance and boundaries for remote workers

How to intentionally overcome the challenges of maintaining work-life balance and boundaries in a location independent setup

Partnerships underpin success

That unique entrepreneurial drive will help sustain you as you strive to map a successful path through the complexities of production and logistics, especially when providing perishable products with fresh ingredients. For Lucie, building the right partnerships has been absolutely critical. Sending the products she has created with such love and care out into the world means involves complex interdependencies and huge amounts of trust:

“One of the toughest challenges in running a business with physical products is building efficient and reliable partnerships."

"Take logistics, for example—an area that often brings challenges digital businesses can sidestep. In fact, logistics issues can be so severe that they have the potential to destroy a new startup.

“In our first year, just before the holiday season when package handling is at its worst, we faced a major setback when a courier company completely destroyed our shipment.” Lucie explained. “Fortunately, we had insured that shipment, and with the help of some exceptional people who expedited the claims process, we recovered the production costs. We were also lucky to have understanding wholesale partners willing to wait. Without that insurance and their patience, the situation could easily have forced us to close.”

This is a timely reminder of all the different moving parts and processes involved in getting any product from your screen to your door, or into the hands of local retailers.

As customers, we rarely give it any thought, until things go wrong (as they did during the Covid travel restrictions, or that time a big ship got stuck in a small canal.) We just assume some kind of magic happens when we press the ‘buy now’ button, and physical products make their way to our homes often within scant days.

But for the entrepreneurs making that actually happen, especially those who are not global multinationals but passionate small businesses instead, they rely on securing support from others to ensure customer satisfaction. This is the essential differentiator from digital product supply, for those dispatching physical goods from one place to another:

“In the long term, partnerships become one of the most crucial and valuable assets of your business, as you need partners you can truly rely on. Although we maintain flexibility as a small company, our core partnerships have remained unchanged for the past five years, as we’ve chosen to work only with the most reliable business partners.

”Based on this experience, I’d advise new e-⁠residents selling physical products to invest time in finding reliable logistics partners, consider insurance for valuable shipments, and build strong relationships with patient, supportive wholesale partners. These strategies can make a huge difference, especially during challenging times.”

Find your ideal business partners

Find service providers and partners to help your e-commerce business on the e-Residency Marketplace:

Find an expert service provider

The e-⁠Residency advantage: Trusted partnerships worldwide

Being part of the e-⁠Residency community offers e-commerce entrepreneurs far more than just a digital toolkit—it provides access to a global network of like-minded innovators and trusted service providers. Lucie reflected that this is where the value of e-⁠Residency truly shines:

“Being part of a larger community, feeling supported, and knowing you have access to service providers who can smooth out the complex tasks allows you to focus on what really matters to you."

“After over five years as an e-⁠resident, facing new challenges that differ greatly from those early on, I can say that belonging to this network has only grown more valuable over time. It’s not just about saving time and avoiding bureaucracy… it’s about the shared experiences and mutual support that truly make a difference.”

For businesses aiming to ship physical products worldwide, having an EU-based company through e-⁠Residency inspires confidence in customers while ensuring compliance with international regulations.

And as entrepreneurs like Lucie Vidlicková demonstrate, the connections and credibility gained through e-⁠Residency create a solid foundation for scaling e-commerce ventures to new markets with trust and efficiency.

Enjoyed this article? You might enjoy our recent article on the rise of social commerce, and how you can take advantage of selling on social media:

Social Commerce: tips for selling on social media

What is social commerce? What are the benefits for businesses selling on social media? Find out in this article, plus read our top tips on getting started