Cross-border trading is biggest barrier to European e-commerce growth
StumbleUponA pan-European report has been released highlighting some of the key issues and trends in online shopping across the region. By Mathias Duda.
By Mathias Duda
The report, compiled by e-commerce specialist FACT-Finder, finds that although the internet is opening up huge opportunities for retailers on a global scale, 70% of online sales in Europe belong to “the big online three” – with the UK generating €48 billion in sales, Germany €39.2 billion and France €25 billion – and cross-border trading still remains a major challenge for many online stores.
Even between countries as close as France and Germany, few online shops sell across borders. FACT-Finder cites cultural differences as the key driver for this, with promotional activity not transferring between nations; campaigns designed to influence German consumers are of little interest to potential French consumers.
Another important barrier for the development of pan-European e-commerce is a lack of consumer confidence in buying from different countries. People are often unaware about the procedure for buying goods abroad and prefer to buy within their own country as it’s perceived to be safer. On top of this, complex VAT requirements for traders who sell into other countries makes it far from easy for smaller brands and retailers to do business across the European Union (EU). The lowest level of overall online sales across the region is in Poland with only €3.4billion generated. However, this is also the e-commerce market that is growing the fastest; registering a 36% in 2010 against the same time in 2009. The report highlights that though not as developed as Western European markets, Poland has the most potential, with retailers becoming increasingly aware of the possibilities of the internet offers, increasing visibility and enhancing the usability of online shop’s websites.
The report also suggests a positive outlook across the UK, Germany, France, Spain, Italy and Europe for 2011. For the UK, the most mature market, forecasts predict that one of the most dominant trends will see retailers looking to invest in “user experience”. Elsewhere, the French will be looking to push their online shops abroad, focusing on internationalisation and for Spain, despite having taken a battering over the past 12 months, the growth rate for e-commerce will still be one of the highest in Europe with more retailers going online.
The growth of e-commerce has made it much easier for even small brands and retailers to trade outside their domestic markets. However, while the infrastructure might be there to support this, it can still take a considerable investment in time and money to understand the intricacies of doing business in different markets. Often this leads to companies not taking advantage of these expanded markets and continuing, solely, to trade locally.
About the author
Mathias Duda is head of UK operations at FACT-Finder, one of the European leaders for e-commerce search and navigation solutions, with clients including Kurt Geiger, Mexx, Harvey Nichols and MyProtein.
http://www.fact-finder.com/blog/
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