A recent EC Report on “Cross-border e-commerce in the EU” bemoaned that it was still relatively uncommon for EU punters to use the internet to buy from websites in other EU states. Could changes to EU ad laws offer a solution? Roberto Crespi from Milan breaks the barriers, comes to London, and reports.
Topic: E commerce
Who: European Commission
Where: European Community
When: 5 March 2009
Law stated as at: 30 April 2009
What happened:
Further to the first EU Commission report which monitored consumer outcomes in the single EU market of 29 January 2008, a second report has been published in March 2009 about “Cross-border e-commerce in the EU” http://ec.europa.eu/consumers/strategy/docs/com_staff_wp2009_en.pdf. The report provides marketers and consumers with an overview of the e-commerce trends and a screening of potential cross-border obstacles across the EU.
In the first report, the Commission identified e-commerce as a sector which ‘has further stimulated the process of cross-border shopping, allowing fast, less costly communication as well as access to a wider variety of goods and services’. The recent survey commissioned by the EU Commission on “consumer satisfaction”, reveals that e-commerce is becoming very popular: from 2006 to 2008 the number of EU consumers (who have bought at least one item on-line) has increased from 27% to 33%. However, whilst e-commerce is widely used at a national level, it is still uncommon for consumers to use it to purchase goods or services in another Member State. According to the figures, cross-border transactions in the same period (2006 to 2008), have remained roughly the same at just 6% to 7%.
Advertising in another country and cross-border sales are closely interconnected. Cross-border e-commerce has the potential to enable consumers to shop around for better deals; however, the report shows barriers to cross-border online trade which affect online advertising.
Few cross-border comparison sites
Marketers should be aware that consumers need comparable information in order to make cross-border comparisons and to identify cross-border offers: few cross-border comparison websites exist, default settings may skew search results in favour of domestic offers, and there is little cross-border advertising. It is also difficult for consumers to identify which traders are reputable, as many well-known brands are unknown outside their home market.
The report highlights how the majority of European consumers have never come across advertisements from sellers located in other EU countries and how they are not aware of opportunities and special offers in other countries. This is mainly due to the nature of Internet search engines which return results in the language of the query. In addition, advertisers seem frequently to take advantage of “geo-targeting” to avoid their online advertisement appearing in another country.
Inability to understand a site in a foreign language was also considered as a major inhibiting factor. Even when a site is translated into a local language, however, the seller usually fails to offer his customer service in a local language.
Why this matters:
The results of the European commission report show clear evidence of how European consumers are eager for online cross-border transactions since they are looking for alternative suppliers and best prices (the survey shows that over half of those who have received advertisements from other EU countries have also made a cross border transaction). However, the lack of information and the very limited cross-border use of advertisements about extra-national offers and services is an obstacle that marketers should tackle in order to see the volume of the cross-border e-transactions raising.
It appears that the European Commission warns European sellers that they should implement e-advertising which is aimed to reach citizens of others EU Member States, paying more attention to the information provided to non-domestic consumers.
The e-advertising is certainly a hot topic and we will certainly keep a close eye on this in September 2009 when Commissioner Meglena Kuneva will present the results of a further independent survey carried out by the European Commission. The idea of this is to identify how consumers are being prevented from shopping online across the EU.
