Update on E-Commerce in Europe - Walter Devenuto, President EMOTA

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Opening presentation at the European E-Commerce Conference on 15th October 2013, with the latest statistics on e-commerce in Europe

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Update on E-Commerce in Europe - Walter Devenuto, President EMOTA

  1. 1. EMOTA represents 3,500 multi‐channel/online retailers in 15 countries • 15 European countries • 16 member associations • 3,500 companies • € 290 billion turnover • 83% of European                 e‐commerce ‐1‐
  2. 2. In 2013, European E‐Commerce will reach a turnover of €350 billion  E‐commerce turnover by region € Billion  350 298   300 249   250 215   200 185  +17% 350  Europe 338  Asia Pacific +30% 318  N. America +12% 284  250  Growth 259  209  193   150 167  122   100  50 84  15  20  2009 2010 33  45  56  ROW  ‐ 2011 2012 2013 Source: EMOTA, 2013 Note: B2C E‐commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services ‐2‐ +26%
  3. 3. UK, France and Germany account for 60% of European E‐Commerce European E‐commerce turnover by country 2013 (€ billion) Other Eastern Europe Spain 18 12 Italy Russia 17 UK 13 111 13 Benelux Austria/ Switzerland 16 20 33 52 46 Scandinavia France Germany Source: EMOTA, 2013 Note: B2C E‐commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services ‐3‐
  4. 4. E‐Commerce is growing very fast throughout Europe E‐commerce growth estimate by country in 2013 +30% +30% +20% +17% +15% +24% +23% +25% +16% +15% +14% +14% +13% +13% +10% +10% +5% +0% Source: EMOTA, 2013 ‐4‐ average  European  growth
  5. 5. E‐Commerce can potentially create 1.5 million jobs in Europe European E‐Commerce employment estimate million 3.8 + 1.5 million jobs in 5 years 4,0 3.5 3.3 3.0 2.7 3,0 2.3 2,0 1,0 0,0 2013 2014 2015 2016 Source: EMOTA, 2013 ‐5‐ 2017 2018
  6. 6. Cross‐border online sales will grow twice as fast as domestic sales € Billion 600 535 491 446 500 350 578 116 99 Cross‐ border +21% 83 402 400 CAGR ’13‐18 European E‐Commerce market forecast 69 56 44 300 200 306 346  377  407  436  462  100 0 2013 2014 2015 2016 Source: EMOTA, 2013 ‐6‐ 2017 2018 Domestic +9%
  7. 7. However, only 11% of consumers currently shop online across borders Domestic vs. cross‐border internet purchases  35  30  25  20 GAP Cross‐ border Digital Agenda  target 2015  15  10 EU avg.  2012  5  ‐  ‐  10  20  30  40 Domestic  50  60 Source: Eurostat, 2013 Note: % of population who ordered goods or services over the Internet from national sellers / from sellers from other EU countries in the last 12 months ‐7‐  70
  8. 8. In fact, consumers are more worried about international delivery Concerns about cross‐border vs. domestic online purchases Long delivery times Returns Guarantee No delivery Payment security Data privacy  Uncertainty on rights 0% 5% 10% 15% % domestic 20% 25% 30% % increase cross‐border Source: Civic Consulting/TNS, 2011 Note: % of consumers reporting concerns about buying products online in their own country vs. in another EU country (sample: 29.010 individuals)   ‐8‐ 35%
  9. 9. In addition, only 25% of retailers sell across borders Proportion of retailers selling in at least one other EU country 50% 40% 30% 25% EU  average 20% 10% 0% Source: TNS, Flash Eurobarometer 359, 2013 ‐9‐
  10. 10. In fact, many retailers are deterred by legal/tax and payment issues Barriers to cross‐border sales for retailers Different consumer laws Risk of fraud/non‐payments Geographic distance Different tax regulations Delivery costs Complaints resolution Own restrictions Customer service Language differences 0% 10% Source: TNS, Flash Eurobarometer 359, 2013 Note: % of retailers reporting obstacles to cross‐border sales to other EU countries ‐10‐ 20% 30% 40% 50%
  11. 11. The cross‐border parcel distribution market is highly concentrated € Billion European parcel market 60 CAGR 53.4 50 43.6 40 29% 47.2 Cross‐border market shares Cross‐ 31% border Other +6% 30% 30 20 71% 70% 69% Domestic +4% 10 0 2009 2011 2014 Source: ATKearney 2012, European Commission 2013 ‐11‐
  12. 12. Cross‐border distribution prices are twice as high as domestic ones Domestic and cross‐border parcel distribution prices  30  25  20 Cross‐ border € 15  10 Domestic  5  ‐ Source: FTI, 2011 Note: Domestic and weighted average cross‐border prices for 1 kg. parcels ‐12‐
  13. 13. Beside low prices, consumers want easy returns and track & trace Relative importance of delivery offerings Price of delivery Basics Ease of returns Track & trace Security of delivery Value‐ added  services Delivery windows Delivery notifications Express delivery Same‐day delivery Premium  services Alternate delivery Dynamic rerouting 0% 10% 20% 30% Source: BCG, 2013 Note: survey of 1,500 consumers in late 2012 ‐ % of respondents – top 3 answers ‐13‐ 40% 50% 60% 70% 80%
  14. 14. Operators need to provide advanced services to suit consumer needs Easy returns Track & trace Fast delivery solutions Fixed time windows Click & collect Parcel lockers ‐14‐
  15. 15. The European payments market is also highly concentrated European payments market Europe cards market shares € Billion 50 50 5% Internet/mobile 3% Cheques 45 37 40 35 30 25 33 6% 45% Credit/debit  10% cards 40% 34% 20 15 10 55% 47% 53% Bank  transfers 5 0 2005 2010 2015 Source: ATKearney 2013, Nilson Report 2013 ‐15‐ Other
  16. 16. Cross‐border payment transaction costs are surging significantly Evolution of payment processing unit costs index 140% 140% Cross‐border  electronic 129% paper 120% 100% 100% 97% 95% 80% 85% SEPA electronic 71% 60% 59% 46% Domestic paper 39% Domestic electronic 40% 27% SEPA paper 20% 2006 2008 Source: ATKearney, 2013 Note: index: 2006 =100% ‐16‐ 2010
  17. 17. Payment transaction costs vary widely by country Comparison of payment transaction costs by country  1,4  1,2  1,0  0,8 Cost per  transaction  0,6 (€) EU average  0,4  0,2  ‐  100 Source: McKinsey, 2013  200  300  400  500 Payment costs per capita (€) ‐17‐  600  700
  18. 18. We favor harmonization of consumer legislation across the EU Consumer Rights Directive Standard withdrawal right: • Withdrawal period: 14 days • Reimbursement within further 14 days Price transparency: • No pre‐ticked boxes for extra services • No payment / telephone surcharges Information requirements: • Order button with “obligation to pay” • Delivery/payment restrictions indicated before order ‐18‐
  19. 19. However, we need to balance interests and avoid excessive burdens Data Protection Regulation Issues: Benefits: • Rules valid throughout Europe • Explicit consent • Elimination of notifications • Third‐party access to data • Single supervisory authority for companies • Information requirements /  data protection officers • Constraints to profiling • Right to be forgotten/          to data portability ‐19‐
  20. 20. Tax rates need to be standardized to create a level playing field • Harmonize VAT rate structure across EU: – Same VAT rates for similar goods/services – Same VAT rates for similar online / offline goods – Same VAT exemptions • Accelerate implementation of one‐stop‐shop for VAT • Avoid tax arbitrage by non‐EU multinational companies – Harmonize corporate income taxes – Eliminate internal EU tax havens – Apply taxes on revenues generated in each country ‐20‐
  21. 21. EMOTA is developing a European trustmark for cross‐border shopping European harmonization of national trustmarks • Harmonize codes of conduct  • Accredit national trustmarks • Promote European trustmark ‐21‐
  22. 22. EMOTA commits to drive international e‐commerce growth in Europe EMOTA Borderless Digital Commerce Commitment Merchants Consumers • Govern and guide international   e‐commerce development • Inform e‐commerce industry  with standard reporting • Proactively listen and respond to  needs of key stakeholders  Providers Governments ‐22‐

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