European shoppers looking to purchase products from other EU countries on the Web are likely to fail three times out of five, according to a European Commission study on cross-border consumer e-commerce, published yesterday.
Such failures occur when an online retailer does not accept international payments or is simply not prepared to ship its products abroad.
To research the phenomenon, the Commission carried out a ‘mystery shopping’ study where shoppers across the EU attempted to buy a list of 100 popular products, ranging from cameras to CDs, books and clothing – from a retailer in a different Member state. In total, over 11,000 test orders were carried out and what the study found was that no less than 60% of transactions could not be completed because of inadequate payment options or limited shipping abilities.
Hence, the EC concludes that three out of five cross-border purchases fails, which it rightly identifies as a big problem.
The publication of the research findings comes more than half a year after the Commission published another report on cross-border e-commerce in which it had already concluded that online shopping is becoming increasingly popular in the EU but barriers to cross-border trade might be holding back its further development.
The European Commission seemingly has outdated numbers for the size of the European e-commerce market, which it estimated to be worth 106 billion euros back in 2006, 70% of which was turned over in key markets like the UK, France and Germany. It did cite more recent numbers for European online shoppers, which the EC says grew from 27% to 33% in share from 2006 to 2008, while cross border e-commerce remained more or less at the same level during the same time frame (6% to 7%).
The Commission says the business potential for cross-border online trade is definitely there but is not materializing the way it expected. According to its research, 51% of European retailers sell via the internet but only 21% are currently conducting cross-border transactions, down from 29% in 2006 (in the EU25). The same proportion (21%) advertises cross-border, and retailers who do trade cross-border usually only sell to very few Member States: only 4% of those retailers trade with 10 or more Member States, most trade with one or two other Member States.
So how does the EC know there’s potential? Well apparently, one third of EU citizens have indicated that they would consider buying a product or a service online from another country if it were cheaper or of better quality, and 33% of EU consumers say they are willing to purchase goods and services in another language. In addition, 59% of retailers are said to be prepared to carry out transactions in more than one language.
“Achieving a Digital Single Market is a top priority for Europe”, said Viviane Reding, EU Commissioner for Information Society and Media. “We won’t have a real Digital Economy until we remove all barriers to online transactions, also for end-consumers. This must be on top of the list of all policy initiatives to re-launch the single market project.”
European Commissioner for Consumers Meglene Kuneva gets quoted as saying that Europe’s consumers are being denied better choice and value for money and that the European Commissions must “simplify the legal maze” that is apparently preventing online traders from offering their goods in other countries.
They’ve talked the talk, now let’s hope they walk the walk.