Ecommerce challenges in the global market of 2016

By 20th June 2016Ecommerce
E-commerce

What do we really know about the global challenges in ecommerce, both currently and in the near future? What should we expect? And how can cross-border ecommerce be stimulated? Here’s our deep-dive into the topic.

 

As we all know, the European Union is the world’s largest single market nowadays and has one of the most open and secure legal investment frameworks in the world. The EU strives to fulfill the demand for clarity and transparency regarding cross-border sales among the international consumers.

On May 29 this year, Ecommerce Europe and the Ecommerce Foundation hosted the Global Networking Dinner, where the attendees were a wide variety of business leaders, European policy makers, online merchants and other stakeholders. On the agenda was to discuss ecommerce trends, how to achieve consumer-focused standardisation and harmonisation in modern cross-border parcel delivery, as well as the challenge of encouraging innovative and sustainable solutions.

So, what are the most important global and regional challenges in ecommerce at the moment?

  1. Taxes and legislation
  2. Expensive and slow services, SMEs vs. the monopolies
  3. Business location and the connection with other markets
  4. Consumers’ rights depending on the EU or non-EU location
  5. Lack of capital and investors
  6. Payment and security issues

How can the cross-border ecommerce be stimulated?

The EU made the decision last year to concentrate more on SME’s (Small and Medium Sized Enterprises) and are now trying to improve cross-border ecommerce by lowering the barriers mentioned above. At this point in time, the market’s full potential has not been reached and only 15% of consumers are purchasing online from another EU countries. It’s quite clear that there is room for growth.

Actions needed to bring down the taxation/VAT barrier:

  1. Harmonisation of the 75 different VAT rates currently existent in EU. A common standard needs to be put in place
  2. Establishment of a common European threshold for the destination principle in order to facilitate competition and cross-border trade for SME’s
  3. Extension of the Mini-One-Stop-Shop to all online traded goods and services; a pan-European information point for dealing with fiscal questions on supranational and cross-border trade
  4. Coordination of taxation of the digital economy within the OECD, to ensure a global, level playing field

Main actions to be taken on consumer rights by Ecommerce Europe:

  1. Harmonisation of the legal framework for sales of goods, services and digital content
  2. Consumer conditions should be simplified for the understanding of consumers and SME’s
  3. Development of a transparent standard information form on consumer rights and obligations
  4. Evaluation of the Consumer Rights Directive in order to include some actions into the common practices and business models in ecommerce, e.g. the ones related to withdrawal and return
  5. Support for industry-led Trustmark schemes for B2C ecommerce, which would stimulate the trust in online cross-border transactions

Actions for internet security and privacy:

  1. Harmonisation of privacy and data protection legislation and recognition of the economic potential of recent technological developments in information collection and analysis
  2. Recognition of the need for electronic communication and the possibilities of data driven e-marketing  in the business development plan of online businesses
  3. Verification of e-Identification and authentication of the consumers, made by the governments and trusted parties, in order to reduce cybercrime and fraud

Pan-European Framework to facilitate the e-payments across EU:

  1. Facilitation of payment systems interoperability, on all online devices and between all EU States
  2. Adequate communication on the demand for innovative and secure European payment market: TTPs (Third-party Payment Providers), wallet and one-click-buy options etc
  3. Creation of more ways of identifying the consumer in payment transactions, interoperable e-payment innovations that pay more attention to merchants’ reach and conversions
  4. Reduction of card payment costs – MIF’s (Multilateral Interchange Fees) for both retailers and consumers

Pan-European action strengthened for fair competition:

  1. Recognition of economic freedom and the freedom of entrepreneurial activity
  2. Stimulation of innovation and priority to entry possibilities for SME’s and start-ups into the world markets, in order to maintain a competitive ecommerce sector
  3. Ensuring equal access for all e-businesses to online platforms’ services as well as transparency for SME’s and their consumers; search engines, big data and comparison tools

There’s no surprise that more and more businesses are looking to expand into the global ecommerce market and get their share of the cake. Businesses are shifting their presence online and are using new platforms and hybrid integration strategies. The only way to succeed and stand out in the online ecosystem is by focusing on the clients’ experience and needs – and never stop looking for technological edge.

Even with these barriers in place over the past year, the below table by Forrester Research shows a forecast of 20.1% growth rate in the ecommerce sector. Who knows what the growth rate will be once these barriers are lowered even further, combined with the speed of which the ecommerce sector is growing? Only time can tell.

European E-Commerce Forecast, 2013-2017Source: Forrester Research