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Borderless trade in the EU: successful cross-border e-commerce

Achieving sales throughout Europe – this is what many online retailers are aiming for. And thanks to cross-border strategy, it doesn’t have to remain a dream. Many European vendors are already managing to meet the demands of different markets.

According to Cross Border Commerce Europe, the volume of cross-border e-commerce in the European Union amounted to 95 billion euros in 2018 (excluding sales in the travel industry). European companies generated 55 percent of sales, while retailers outside the EU generated 45 percent.

Borderless trade in the EU

Cross-border e-commerce in Europe is expected to grow by 80 percent over the next few years. Source: Cross Border Commerce Europe

In today’s article you will learn about the obstacles still standing in the way of borderless e-commerce in the EU despite the growth trend and how you can implement a promising cross-border strategy for your online shop.

The current state of cross-border e-commerce in the EU

So far, the path to becoming a cross-border vendor in different European countries has been marked by a number of legal pitfalls that a company first had to overcome. In particular, the fragmentation of consumer contract law in Europe posed a major challenge. The difficult legal situation has thus so far prevented small and medium-sized enterprises in particular from operating across borders. There is also potential for development on the part of customers. On the one hand, there are major regional differences in the use of e-commerce throughout Europe. On the other hand, e-commerce customers still have significant reservations regarding the purchase of goods from online merchants in other European countries. While two thirds of European customers trust domestic e-commerce vendors, only half of those surveyed trust vendors from other European Union countries. The authors of the EU study see a strong correlation between trust in online shopping and internet use. The more widespread the use of the internet is in a country, the higher the confidence in online merchants.

Although customer confidence in intra-European e-commerce has been rising for years, there are still a number of misgivings to be overcome. Source: European Commission

Although customer confidence in intra-European e-commerce has been rising for years, there are still a number of misgivings to be overcome. Source: European Commission

 

The EU has recognised that e-commerce is becoming a major economic factor. European institutions hope that the implementation of the Digital Single Market digitisation strategy will lead to an annual economic growth of 415 billion euros per year. The EU has implemented a number of measures to this end. Among other things, new rules for cross-border parcel deliveries have already entered into force, and revised consumer protection provisions will be introduced from 2020.

How to properly implement a cross-border strategy

When you implement a cross-border strategy as an online retailer, market and country analyses are as important as the legal framework. The more detailed your approach, the more stable your cross-border strategy will be. First of all, it is important to define the growth potential of the market. How promising is the country for your product range?

Another key question that you need to address is that of distribution in the various countries. This includes the choice of distribution channels, country-specific delivery expectations (e.g. neighbourhood delivery) and returns management. Depending on strategic considerations, it makes sense, for example, to choose a specific regional marketplace and an internationally active parcel or courier service.

In order to obtain a comprehensive picture, it is also advisable to obtain information about the supply and demand as well as market prices. How affluent are consumers in the respective country?

What is the state of the internet penetration, which, as mentioned above, also has a direct influence on public trust in e-commerce? How high is the density of online shoppers? You should also determine which product segments are particularly in demand and whether there are specific cultural requirements for the products purchased. You can only get a comprehensive impression of the competitive pressure in the respective country by examining the suppliers and their pricing.

How to keep an eye on all markets with a cross-border strategy

Market data is the basis for arriving at relevant conclusions about markets. What prices do your competitors charge for which products? Is there a change in the assortment of a single retailer or possibly in the entire market? Questions such as these are answered by the market intelligence software blackbee Insights, which collects data worldwide and prepares it for you in a clear way. blackbee Insights functions completely independently of national languages and thus provides you with convenient access to all markets that are interesting for your cross-border strategy.

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