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.
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.