E-commerce growth ‘sluggish’, Commission finds

consumer.jpg

Growth in cross-border e-commerce across the European Union continues but only "at a sluggish pace", reveals the latest European Commission consumer survey, indicating that much remains to be done if the bloc is to meet targets for 2020.

36% of EU consumers shopped online from national sellers in 2010 compared to 34% in 2009, found the 5th edition of the Consumer Conditions Scoreboard, revealing minor growth in the popularity of domestic e-commerce.

But cross-border e-commerce grew only at snail's pace, rising one percentage point to 9% last year compared to 8% in 2009, "despite clear benefits in terms of savings and choice," the Commission lamented.

The Scoreboard recorded healthy growth for e-commerce in general, however, with 40% of consumers having ordered goods or services online from at home or abroad in 2010, up from 37% in 2009.

The EU has set itself the target of raising the proportion of EU consumers who shop online across borders to 20% by 2020, as enshrined in its 'Digital Agenda' for boosting the digital economy.

"Cross-border shopping is growing only slowly. This is worrying," said Consumer Policy Commissioner John Dalli, presenting the Scoreboard's key findings in Brussels on Friday (11 March).

"Six out of 10 businesses refuse to sell online to other countries," Dalli said, despite figures showing that 56% of European companies estimate that more than 10% of their e-commerce sales come from other EU member states.

Fraud fears

Consumers continue to perceive cross-border online shopping as an activity fraught with risk.

Among consumers who have never made a cross-border distance purchase, 62% are worried about fraud and scams, 59% cite concerns about what to do when problems arise and 49% are deterred by expected delivery problems, the survey found.

But Commissioner Dalli suggested that inexperience was a key factor in consumer mistrust of cross-border online shopping.

"Active cross-border shoppers are much less worried about fraud and non-delivery than those who have never shopped online," said Dalli, suggesting that Commission plans to establish an alternative dispute resolution (ADR) system in Europe may go some way to increasing trust.

However, despite being singled out as the preferred redress mechanism of traders and the EU executive alike, just 10% of retailers actually use it. "Perhaps it should be made obligatory," said Monique Goyens, director-general of EU consumer group BEUC. 

Fraud fears, meanwhile, are much less widespread among consumers who have shopped online before. Just 34% are worried about fraud and scams, 30% were concerned about problem resolution and 20% were put off by expected delivery issues.

61% of cross-border online shoppers are equally confident when buying over the Internet from abroad as they are when shopping online from domestic firms, compared to just 31% of the general population, again suggesting that experience is a key factor.

Delivery figures, meanwhile, indicate that cross-border e-commerce is at least as reliable as domestic online shopping: 16% of cross-border purchases were delayed (compared to 18% of domestic purchases), while the product failed to arrive in 5% of cross-border cases (6% domestically).

Indeed, the survey indicates that the biggest obstacles to boosting cross-border online trade lie with companies rather than consumers: the proportion of retailers selling to other EU countries fell to 22% in 2010, down from 25% in 2009.

Consumers slowly recovering from crisis

Consumer conditions rebounded in 2010 after recorded sharp falls in 2009, according to the Commission's figures, with most countries now matching or exceeding 2008 levels.

The countries with the best conditions for consumers are the UK, Ireland, Luxembourg, Austria, Finland, the Netherlands, Italy, Denmark, Germany, Belgium and Sweden, all of which are above the EU average, the Scoreboard found.

European consumer organisation BEUC, meanwhile, hailed the Scoreboard's revelation that 69% of shoppers in the EU trust consumer organisations to protect their rights.

BEUC said it was up to consumer organisations throughout Europe to invest in continually deserving this trust, and called on policymakers to provide consumer groups with the resources to help them serve the needs of shoppers adequately.

"We need to take on the challenge of continuing to secure their trust and satisfying their expectations," said BEUC's Goyens.

Business 'overconfident' on consumer rights

82% of retailers claim to be well aware of consumer protection laws, but when their knowledge was tested in detail – for example, when they were asked what they must do when a product turns out to be defective – just 26% gave an adequate response, leading BEUC to call for companies to be better educated as to their obligations.

Meanwhile, just 13% of consumers actually complain after encountering problems and only 52% are satisfied with the outcome when they do, which BEUC interpreted as "a signal for policymakers to finally address properly the long overdue need for easy, cheap, efficient consumer redress".

"We expect the EU to take on a leading role in making a reality efficient consumer redress, in and out of court, individually or as a group," said the group's director-general, Monique Goyens.

Meanwhile, she outlined fears that the current wave of spending cuts that are sweeping Europe would have a negative impact on the ability of consumer groups to do their job properly.

"We need to push governments to recognise that consumer policy isn't a luxury and that consumer organisations face huge funding problems. Too often they are the first budget to be cut in the crisis," she said. 

The European Parliament is expected to vote on an updated version of the EU's Consumer Rights Directive later this month. 

"I want to praise all those member states who have continued to invest in a quality environment for consumers in these tough times. We are turning the corner: the trust of EU consumers in consumer institutions is starting to go back to previous levels," said EU Consumer Policy Commissioner John Dalli.

"Effective consumer policies are not just nice to have: they are key drivers of growth," the commissioner said.

"It is also good news that consumers' worries about cross-border shopping tend to evaporate once they've actually tried it and had a good experience. But the results also confirm how much work there is still ahead of us in dismantling the remaining barriers to the benefit of the European economy, and European consumers and businesses alike," Dalli added.

Monique Goyens, director-general of European consumer organisation BEUC, said "green shoots of rising consumer confidence are evident in the findings, but there are some alarming signs of how well informed European businesses are of their obligations to consumers and there is strong proof that countries with low consumer confidence levels often are a result of un-ambitious consumer policy, a lack of market supervision and weak enforcement of consumer rights". 

The European Commission publishes two Consumer Scoreboards every year.

Spring 2011's 'Consumer Conditions Scoreboard', published on 11 March 2011, examines progress in the integration of Europe's retail market from the consumer's perspective.

It also monitors improvements in different national conditions for consumers across the EU's member states, which are reflected in their trust in national consumer authorities and organisations, or the effectiveness of complaint handling.

It will be followed in autumn 2011 by the 'Consumer Markets Scoreboard', which will screen 50 specific consumer markets across the EU to identify those which may be malfunctioning from a consumer point of view. 

  • March 2011: European Parliament expected to vote on new Consumer Rights Directive.
  • Autumn 2011: European Commission to publish 'Consumer Markets Scoreboard'. 

Supporter

Pro Europa

From Twitter

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.