Despite the potential for growth in e-commerce in Europe, just 21% of online retailers are selling in other EC member states, and just 7% of people shop online across borders.
These are some of the findings of a European Commission survey, which were presented by Maglena Kuneva, the European commissioner for consumer affairs. He identifies language, regulatory barriers to business, as well as consumer trust issues, as some of the barriers to cross border e-commerce.
In the study, people in each member state were asked to search for and attempt to buy a variety of products online, as well as comparing price and availability between domestic and foreign websites.
- When people attempted to make purchases, 60% of transactions were blocked, 80% in the case of some computer and electronic equipment.
- There are potential savings for customers; in half of member states, consumers can find 10% savings by shopping abroad for at least half of the products searched.
- Also, in around half the member states, products could only be found for sale online from websites in other countries, something which shows the opportunity for retailers that embrace cross border commerce.
Barriers to cross border e-commerce
- Consumer confidence. Concerns about the security of transactions across borders, language differences (though a third of EU consumers are willing to purchase goods online in another language), as well as consumer rights in cases of faulty goods or returns.
- Retailers need to see the potential for growing sales by offering services to the rest of the EC member states. However, just 21% of online retailers sell abroad.
- EC legislation. Pre-internet laws designed to regulate cross-border commerce can be restrictive, including VAT and recycling regulations, as well as copyright issues in some cases. At the moment, retailers have to to register in each country separately in order to trade across borders.
In his speech, Kuneva outlines his plans to tidy up some of these regulatory issues, as well as simplifying the consumer rights legislation to reassure shoppers.
The removal of these barriers to borderless e-commerce is a welcome development, and hopefully one that will come sooner rather than later, then it will be up to online retailers to make the most of the European market by adapting their websites to deal with different languages and consumer needs across Europe.
As Jake Hird pointed out on a post on cross-border e-commerce last year, retailers’ concerns over fraud, payments and logistics need to be overcome, but the potential is there.