A surprising report from the European Commission finds 61% of orders placed online with merchants in other EU nations are rejected, hurting e-commerce
Some 60 percent of online orders are rejected when they are placed in another EU country than the one where the retailer is located. Shoppers from Romania, Bulgaria, Latvia and Belgium face particularly high rejection rates, data released by the European Commission shows.
"Better deals and greater product choice for consumers on our vast European market could be just a click of a mouse away. But in reality online shoppers are still largely confined within national borders," EU commissioner for consumer rights Meglena Kuneva said Thursday (22 October).
The EU executive commissioned a study based on 11,000 test orders across the EU from a list of 100 popular items such as cameras, CDs, books and clothes.
The results revealed that, on average, 61 percent of EU cross-border transactions failed, either because the retailer had no shipping possibility to that particular country or because payments were not accepted from that member state.
Online shoppers from Romania have the most difficulties in placing their order abroad, with a 76 percent rejection rate, followed by Bulgarians (75 percent), Latvians and Belgians (both 70 percent). Malta, Ireland, Poland, Cyprus, Lithuania, the Czech Republic, Greece and Hungary were also above the EU average in their rejection rate.
Only online shoppers from Spain and Austria had less than half of their orders rejected.
Meanwhile, in most member states, at least half of the products were 10 percent cheaper if ordered from another country, shipping costs included. Also, some 50 percent of the products searched could not be found on the national websites and were only offered by online retailers from other countries.
Language does not seem to be a barrier, with 60 percent of European retailers saying they are ready to carry out a transaction in another language and a third of EU consumers willing to buy from a website in another language.
But issues of trust in respect to the security and reliability of banking services, consumer rights, and proper redress mechanisms hold back traders from selling their goods in other EU states.
With 27 national regulations and fragmented EU rules on consumer rights, there was also an urgent need to "simplify the legal maze" preventing online retailers from cross-border trading, Ms. Kuneva said.
The outgoing commissioner urged the European Parliament and EU leaders to adopt as soon as possible a so-called Consumer Rights Directive aimed at simplifying and unifying EU rules in this field, including for online consumers.
Ms. Kuneva also made reference to the political guidelines put forward by the commission's president, Jose Manuel Barroso, for his second term, where he promised to work for an active consumer policy.
"But we don't want consumers to trust the market and venture outside their borders only to be rebuffed by traders who find it to difficult or burdensome to serve them," she pointed out.
Her calls were echoed by information society and media commissioner Viviane Reding—likely to stay on as commissioner—who said that "achieving a digital single market is a top priority for Europe."
"We won't have a real Digital Economy until we remove all barriers to online transactions, also for end-consumers. This must be on top of the list of all policy initiatives to re-launch the single market project," Ms. Reding said in a statement.
DigitalEurope, a lobby group for over 100 national associations and online companies in Europe welcomed the report and said that the current system of reporting, paying and refunding levies "is an impediment to cross-border e-commerce."
"With the national-based levy system in place today, cross-border traders may end up paying and reporting copyright levies in several countries for the same goods," Bridget Cosgrave, director general of DigitalEurope said in a statement.
The European e-commerce market was estimated to be worth €106 billion in 2006 and is the fastest growing retail channel. In 2008, 51 percent of EU retailers sold online.