E commerce and postal services


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  • The main purpose of this paper is an attempt to consider some practical, formal and legal and regulatory mechanisms that could , in our view, be a candidate for e-commerce model that ranks e-commerce in systematically protected and guaranteed models of trade. We belive that e-commerce can be a support for economic development in general, with particular effect on stimulating business activities of small and medium enterprises, with potentially, balancing regional development.
  • The Trade Strategy of the Republic of Serbia has singled out the following as the key question: ‘Does this mean only designing a framework for the development of electronic commerce in the country, or we are trying to create special conditions for the dynamic development of electronic commerce as an important factor of economic development in the future?Like the authors of the Strategy, we also see the answer to this question in the creation of special conditions for a more dynamic development of electronic commerce. Yet, we believe the creation of e-commerce development framework to be a necessary condition of the transition to the latter, certainly more difficult and ambitious task.
  • Fortunately, this first condition was largely fulfilled through various activities of public authorities in the last few years. Thus, at this moment the following have been adopted: The Law on Electronic Commerce, The Electronic Document Law, The Law on Electronic Signature ... all these virtually complete the legal framework necessary for the performance of different modalities of e-business, and what is most important, for a valid conclusion of contracts electronically.So, it seems that we need to address the remaining problem of infrastructure, and that is the product delivery phase as a very important element of the realization of the process of electronic selling to final consumers. Of course, this problem does not exist when it comes to products that can be digitized. Namely, The Law on Postal Services, as a general law that regulates the phase of delivery of postal items, considers this type of delivery only as a specific type of service, so that it contains no provisions that would treat the specifics of delivery of postal items in a proper way, which it has when it is a part of a wider service process. Neither does The Consumer Protection Law manage to provide sufficient legal material for a serious legal regulation of products delivery as a part of electronic commerce. For us was very interestingly the fact that the neglect of the delivery phase is typical also of the countries that are much further advanced in the development of electronic commerce. The EU Directive on e-commerce specifically states that regulation of the delivery of goods is not its subject matter. It is their experience that can be a good indicator that, despite the completely built up information-communication structure and legal framework in this area, the problems that arise at the stage of delivery of the product can significantly devalue the process of electronic sales.There is one another problem - The issue of trust both in the phase of electronic product ordering and payment in terms of security of procedures, data protection and the like, and in delivery in terms of whether the product will arrive undamaged and in the guaranteed period, including the problems with return trade flows which arise in connection with the previous, will form the basis for significant progress in this field for a long time.
  • The European Commission has recently issued a statement putting forward an action plan on fostering the development of electronic commerce with the aim of doubling the share of electronic commerce in retail transactions by 2015. It is interesting that the same document gives the fact that the share of electronic commerce in retail activities in the European market is only 3.4% . As problems to be solved, the European Commission notes a number of those usual ones related to e-commerce, but what is important for us is the fact that the quality of service in the delivery segment particularly stands out. The European Commission insists on a clear definition of responsibility for damaged, stolen or lost parcels, as well as on the efficiency and accessibility of parcel delivery services in rural and remote areas. At the same time, the statement draws attention to the fact that SMEs are at a disadvantage compared to large companies, what prevents them from taking advantage of a competitive market. There is a study carried out especially for the needs of the European Commission, which shows that the costs of sending packages are at least twice the actual figure, whereby this fact is directly stated as the cause of preventing the growth and development of electronic commerce. Again, the same study underlines that even with as high a price for sending packages, small and medium enterprises are forced to pay significantly higher costs than large companies . In this sense, the regulatory pricing of parcel delivery services that would be more harmonized with the actual costs, is recommended as a priority.
  • When it comes to delivery segment in Serbia, delivery of certain types of items has been declared a service of public interest, with the obligation of the designated public postal operator. Company, to provide them continuously, on the whole territory of the Republic of Serbia, within the prescribed quality, at affordable prices and under the same conditions for all users without discrimination.Among other things, this mode involves ordinary and registered letters, as well as packages up to 10 kg in the domestic, or 20 kg in international traffic, which is particularly interesting for us here. All of us can see the lack of foundation of declaring these services for services of public interest, whereby no one should particularly be convinced about the speed and inevitability of replacing paper correspondence with the electronic one. Practically, it is estimated that in the next ten years everything that can be digitized will be digitized , while the price of a chip will fall below 1 cent, which is far lower than the price of the cheapest letters in any European country, including Serbia.Let us go back for the time being to the previous statement that some postal services are defined as services of public interest. And this is not typical only of Serbia. if we declare some, we could say outdated postal services, to be of public interest, there is no rational reason why a parcel delivery service in the function of the realization of e-commerce service should not be declared the service of public interest. In a practical sense a public postal operator, through the information-communication and postal network that he has been entrusted with to managed, would have an obligation to provide these services continuously throughout Serbia, within the specified quality, at affordable prices and equal conditions for all users, without discrimination. Or more specifically, this would mean that the segment of delivery of products ordered electronically is regulated both in terms of transport, prices, proper packaging, responsibility for non-delivery, or damage of packages, return flows of the damaged goods and the like.Of course, with the fulfillment of these conditions, other postal operators could also deal with this type of delivery, who could, like other legal entities, ‘access’ the postal network of the public postal operator on the basis of the avoided phases of delivery. In addition to appropriate and necessary regulation, this would prevent the establishing of formal legal monopoly of the public postal operator in this segment.
  • PTT ‘Serbia’ has over 1500 objects which are all electronically connected, covering virtually every town or place in Serbia. This fact may represent a solution to ‘one of the biggest problems’ according to the Trade Development Strategy. That problem is ‘related to the supplying of the population in sparsely populated areas, i.e. an insufficient degree of development of trade network in these areas’. Starting from a logical definition of the postal network of the public postal operator as a public good, there is no reason why the state should not use this network as a substitute for the missing trade network, and electronic commerce is an ideal form for the practical realization.At this point we can further clarify the concept of ‘network access’. Through the information-communication and delivery network of the public postal operator, the state guarantees the possibility of trading electronically on the whole territory according to the cost-oriented prices, with the specified quality and equal conditions for all. The manufacturer, i.e. seller can directly perform a complete electronic sales operation through this network and according to the conditions defined above. However, if he has for example his own information-communication resources, he can achieve savings, since he could use the network of public postal operator according to predetermined prices only in its delivery area. Also other authorized postal operators, in compliance with all the prescribed requirements for delivery within electronic commerce, could again use, with pre-specified prices, the information-communication infrastructure of the public postal operator.This effectively prevents the establishment of the monopoly of the public postal operator in this segment, whereby the state is required to determine the mechanisms of compensation of possible losses incurred by the public postal operator (of which, we are confident there would not be any). What is significant in this whole concept is the fact that this principle excludes commercial quantity discounts, introducing only a predetermined discount on the ‘avoided phases of the business process’, what puts small and medium enterprises into as much as possible equal position in relation to large companies. This would essentially be indirect subsidizing of small and medium enterprises.
  • Recent research carried out by the Universal Postal Union (UPU), a specialized United Nations organization shown that these are not ‘revolutionary’ or unfamiliar ideas. According to the research, over 70% of public postal operators surveyed consider e-services of strategic importance for the development of the postal market. As a result of this, the next UPU Congress the adoption of relevant resolutions is expected that will promote electronic mail services as an essential component of a new global strategy of the Universal Postal Union. The same study pointed to the various experiences with the scope of incorporating electronic postal services by public postal operators, where these services form only 1.5% of the national postal income, while in some countries this percentage goes up to 30% (e.g. in 2010 the Australian Post Office increased its profit in the segment of parcel delivery by 36%, primarily due to electronic commerce; in the same segment, when quarterly results are compared from the end of 2011 with those from 2010, German Post Office had an increase of as much as 70.4% ). When it comes to the volume of electronic commerce, what is more interesting is that at the top there are, besides the expected postal administrations of most developed countries, those such as Belarus, together with high rankings of, for example Tunisia and Ukraine. An important conclusion could be drawn from this data - the possible lack of economic wealth or development is not an obstacle to the development of electronic commerce, if there is the appropriate innovative potential.
  • We have already mentioned the problem of trust of the companies and citizens in the reliability of electronic commerce, both in the phase of electronic ordering and paying for goods, and in the delivery phase. The fact is that the citizens of Serbia are at the very top regarding all issues related to lack of confidence in institutions. We point to the data suggesting that in Serbia, only 15.3% of citizens believe that most people can be trusted (world average is 26.4%), i.e. that even 14.6% of our citizens think that most people want to take advantage of them (the world average is 10.7%, while in the west-European countries it is approximately 5%). In fact, here we recognize a lack of what Francis Fukuyama called ‘social capital’, defining it as ‘the expectation of some community members that all other members of the community will act regularly, honestly and cooperatively ...", which is definitely a serious obstacle to the development of electronic commerce. What is interesting for us is that Fukuyama draws the general conclusion that such societies need a certain dose of state intervention in terms of establishing regulatory rules, and sometimes direct financial support to certain business activities. The fact that the public postal operator could be an integrating factor in this segment is also indicated by the results of another survey carried out at the European level - after fire-fighters, doctors and teachers, the postal service is in the fourth position concerning trust that the citizens of European countries have in it, far ahead of managers, employees of marketing companies, not to mention the politicians. We believe that without the creation of appropriate infrastructure and a series of regulatory rules , ​​no popularly devised campaign will bear fruit .In fact, these have to be complementary and simultaneous activities.
  • We feel free to propose what, in our opinion, would be a longer-lasting and more comprehensive solution for the definition of institutional authority that would be responsible for the regulation of electronic commerce.
  • E commerce and postal services

    1. 1. International Scientific ConferenceFrom Global Crisis to Economic Growth Which Way to Take? Slavko Đumić , Lidija Gligorić Republic Agency for Postal Services Republic of Serbia 20 th -22 th September 2012, Belgrade
    2. 2. The Trade Strategy of the Republic of Serbia key question “Does this mean only designing a framework for the development of electronic commerce in the country… …we trying to create special conditions for the dynamic development of electroniccommerce as an important factor of economic development in the future?”
    3. 3. Phase of electronic Phase of delivery ofordering and electronic ordered goods payment ESafety procedures, Guaranteeing delivery, C data protection... integrity of goods, Reverse goods flows O M M E - Law on electronic R commerce - Postal Services C - Law on Law electronic - Consumer E document Protection Act... -Law on electronic signature... TRUST IN E-COMMERCE
    4. 4. Action plan of European Commission on support todevelopment of electronic commerce from 11.01.2012 Present share of e-commerce of 3.4% in retail activities, should be doubled until the year 2015 BARRIERS TO -Prices for packages RECOMMENDATION!!! E-commerce: 2X higher than real; Regulatory pricing -For small and of deliveryUncertainty about laws medium enterprises even higher Suspicions about the reliability of payment system Prices -Responsibility for damaged, stolen or lost packets; Quality of service -Accessibility of services in delivery rural and remote areas
    5. 5. Universal postal service – services of public interest =set of postal services which are provided permanenty throughout the territory of the Republic of Serbia, within the prescribedquality, at the affordable prices and under equal conditions for all users, without discrimination... Postal items E – COMMERCERecorded postal items = Parcels up to 10 kg in SERVICES OF PUBLIC INTEREST domestic trafficParcels up to 20 kg in the international postal traffic State as the guarantee of Letter-mail in continuous and legally electronic form?! regulated performing
    6. 6. The network of public postal operator = PUBLIC GOOD!1500 facilities, all inhabited settlements in Serbia Solution for missing commercial,covered, linked by transport purchase-selling network... and information E-commerce = only effective “Network practical access”=everyone has the framework right to use public good= prevention of monopoly with stimulation of competition
    7. 7. UNIVERSAL POSTAL UNION – a specialized UN organization E-COMMERCE – essential component of the global strategy Over 70% public For development of postal operators e-commerce innovativeconsider e-services potentional is more as strategic important than economic wealth! E-commerce: 1.Belarus... Examples of e-commerce impact on 5.Tunisia.... packet delivery...Brazil, Ukraine... Australia - 36% profit increased in 2010. Germany - 70,4% profit increased in the third quarter in 2011. compared with the same period in 2010.
    8. 8. The problem of trust in e-commerceMost of the people SERBIA 15,3% The world average 26,4% can be trustedMost of the people The world average Western Europe SERBIA 14,6% want to use you 10,7% 5% Postal Services take the Fransis Fukuyama: Lack of social 4th place according to the trust of citizents, capital (trust) requires state just after the intervention in terms of regulation, firefighters, doctors even financial support sometimes and teachers PROMOTIIONAL CAMPAIGNS, BUT WITH E-COMMERCE - CREATION OF STIMULATING SERVICES OF INSTITUTIONAL FRAMEWORK PUBLIC INTEREST
    9. 9. Regulatory Body in Charge of E-commerce RATEL Concuil for the RAPUSRepublic Agency developement Republic for Electronic of E-commerce Agency for Cominications Postal Services The point is that such organization in one state agency would include all the regulatory (and we also suggest some surveillance) services related to e-commerce- starting from the phase of electronic ordering and payment through to final delivery of goods to the consumer
    10. 10. Slavko Đumić, Vice Chairman of the Board, Republic Agency for Postal Services,Republic of Serbia, e-mail: slavko.djumic@rapus.rs Lidija Gligorić, Senior Adviser, Republic Agency for Postal Services,Republic of Serbia, e-mail: lidija.gligoric@rapus.rs