Emota represents 3,500 multi-channel retailers in Europe with an e-commerce turnover of €350 billion in 2013, accounting for 83% of European e-commerce. Significant growth is projected, with cross-border online sales expected to grow twice as fast as domestic sales, while only 11% of consumers currently shop online across borders due to various concerns such as delivery and payment security. The document highlights the need for improved logistics, standardized consumer laws, and enhanced payment security to facilitate cross-border commerce in Europe.

2. EMOTA represents 3,500 multi-channel/online retailers in 15 countries
• 15 European countries
• 3,500 companies
• € 290 billion turnover
• 83% of European
e-commerce
-1-

3. 167
209
253
301
185
215
249 284
318
84
122
193
259
338
15 20
33
45
56
-
50
100
150
200
250
300
350
2009 2010 2011 2012 2013
€ Billion Europe
N. America
Asia Pacific
ROW
+17%
+12%
+26%
E-commerce turnover by region
-2-
In 2013, European E-Commerce has reached a turnover of €350 billion
Growth
+30%
Source: EMOTA, 2014
Note: B2C E-commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services
352

4. UK, France and Germany account for 60% of European E-Commerce
European E-commerce turnover by country 2013 (€ billion)
Source: EMOTA, 2014
Note: B2C E-commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services
-3-
UK
France
Germany
Scandinavia
Austria/
Switzerland
Benelux
Spain
Italy
Russia
Eastern Europe
Other
107
51
50
33
20
16
14
13
12
18
18

5. average
European
growth
E-Commerce is growing very fast throughout Europe
+0%
+5%
+10%
+15%
+20%
+25%
+30%
+35%
+16%
+14%
+33%
+14%
+16%
+11%
+13%
+15%
+28%
+22%
E-commerce growth by country in 2013
Source: EMOTA, 2013
-4-
+17%

6. Cross-border online sales will grow twice as fast as domestic sales
0
100
200
300
400
500
600
2013 2014 2015 2016 2017 2018
306
346 377 407 436 462
44
56
69
83
99
116
€ Billion
Source: EMOTA, 2013
European E-Commerce market forecast
350
402
446
491
535
Domestic
Cross-
border
-5-
578
+21%
CAGR ’13-18
+9%

7. 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
However, only 11% of consumers currently shop online across borders
-6-
Domestic vs. cross-border internet purchases
-
5
10
15
20
25
30
35
- 10 20 30 40 50 60 70
Cross-
border
Domestic
EU avg.
2012
Digital Agenda
target 2015
GAP

8. In fact, consumers are more worried about international delivery
0% 5% 10% 15% 20% 25% 30% 35%
Uncertainty on rights
Data privacy
Payment security
No delivery
Guarantee
Returns
Long delivery times
Concerns about cross-border vs. domestic online purchases
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)
-7-
% domestic % increase cross-border

9. In addition, only 25% of retailers sell across borders
0%
10%
20%
30%
40%
50%
Proportion of retailers selling in at least one other EU country
EU
average
Source: TNS, Flash Eurobarometer 359, 2013
-8-
25%

10. In fact, many retailers are deterred by legal/tax and payment issues
Barriers to cross-border sales for retailers
0% 10% 20% 30% 40% 50%
Language differences
Customer service
Own restrictions
Complaints resolution
Delivery costs
Different tax regulations
Geographic distance
Risk of fraud/non-payments
Different consumer laws
Source: TNS, Flash Eurobarometer 359, 2013
Note: % of retailers reporting obstacles to cross-border sales to other EU countries
-9-

11. The cross-border parcel distribution market is highly concentrated
0
10
20
30
40
50
60
2009 2011 2014
€ Billion
Source: ATKearney 2012, European Commission 2013
European parcel market
43.6
47.2
53.4
Domestic
Cross-
border
-10-
+6%
+4%
CAGR
Cross-border market shares
Other
29%
30%
31%
71%
70%
69%

12. Cross-border distribution prices are twice as high as domestic ones
-
5
10
15
20
25
30
Domestic and cross-border parcel distribution prices
-11-
Source: FTI, 2011
Note: Domestic and weighted average cross-border prices for 1 kg. parcels
€
Domestic
Cross-
border

13. Beside low prices, consumers want easy returns and track & trace
Relative importance of delivery offerings
0% 10% 20% 30% 40% 50% 60% 70% 80%
Dynamic rerouting
Alternate delivery
Same-day delivery
Express delivery
Delivery notifications
Delivery windows
Security of delivery
Track & trace
Ease of returns
Price of delivery
Source: BCG, 2013
Note: survey of 1,500 consumers in late 2012 - % of respondents – top 3 answers
-12-
Basics
Value-
added
services
Premium
services

14. Operators need to provide advanced services to suit consumer needs
Easy returns
Click & collect
Track & trace
Parcel lockers
-13-
Fast delivery solutions
Fixed time windows

15. The European payments market is also highly concentrated
0
5
10
15
20
25
30
35
40
45
50
2005 2010 2015
€ Billion
Source: ATKearney 2013, Nilson Report 2013
European payments market
33
37
50
Bank
transfers
Credit/debit
cards
-14-
Europe cards market shares
Other
34%
40%
45%
55%
53%
47%
10%
6%
5%
Cheques
Internet/mobile
3%

16. 140%
100% 97%
129%
95%
85%
27%
71%
46%
59%
39%
20%
40%
60%
80%
100%
120%
140%
2006 2008 2010
index
Cross-border
electronic
paper
Evolution of payment processing unit costs
-15-
Cross-border payment transaction costs are surging significantly
Source: ATKearney, 2013
Note: index: 2006 =100%
SEPA electronic
SEPA paper
Domestic paper
Domestic electronic

17. Payment transaction costs vary widely by country
-16-
Comparison of payment transaction costs by country
-
0,2
0,4
0,6
0,8
1,0
1,2
1,4
100 200 300 400 500 600 700
Cost per
transaction
(€)
Payment costs per capita (€)
EU average
Source: McKinsey, 2013

18. Payment methods need to be tailored to specific national preferences
Source: Civic Consulting/TNS, 2011
Online payment methods by country
-17-
0%
20%
40%
60%
80%
100%
Other
Invoice
COD
Online payment
Bank transfer
Debit card
Credit card

19. Upcoming EU legislation will harmonize consumer laws across Europe
E-Commerce
Action Plan
Payments Services Directive
Common
European
Sales Law
(CESL)
Directive on
ADR/
Regulation
on ODR
Regulation on
Data Protection
-18-
Online
Trustmarks
Consumer
Rights
Directive
Roadmap on
Parcel delivery

20. Distance sales rules will be standardized in all EU countries by June
-19-
Consumer Rights Directive
Information requirements:
• Order button with “obligation to pay”
• Delivery/payment restrictions indicated before order
Price transparency:
• No pre-ticked boxes for extra services
• No payment / telephone surcharges
Standard withdrawal right:
• Withdrawal period: 14 days
• Reimbursement within further 14 days

21. We are working to limit data protection burdens for businesses
-20-
Data Protection Regulation
Benefits:
• Rules valid throughout Europe
• Elimination of notifications
• Single supervisory authority
for companies
Issues:
• Explicit consent
• Third-party access to data
• Information requirements/
data protection officers
• Constraints to profiling
• Right to be forgotten/
to data portability

22. Operators will need to improve the quality of cross-border logistics
EC Roadmap on cross-border parcel delivery
Enhance complaint handling through:
• Cooperation between industry players
• Promotion of alternative dispute resolution
Improve quality and efficiency of cross-border services:
• Inter-operability of information systems
• International track&trace and returns
Provide transparent information on:
• Delivery and return options
• Prices and service levels
-21-

23. Payment security will be enhanced and transaction costs will go down
EC proposals on payments services
• Cap on interchange fees for card payments
• No surcharges on credit/debit cards
• Strong authentication for online payments
• Consumer protection against frauds
• Innovation of mobile/internet payments
-22-
Revised Payment Services Directive Regulation on Interchange fees

24. 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
-23-

25. EMOTA has developed a European trustmark for cross-border shopping
-24-
European harmonization of national trustmarks
• Harmonize codes of conduct
• Accredit national trustmarks
• Promote European trustmark

26. EMOTA commits to drive international e-commerce growth in Europe
-25-
EMOTA Borderless Digital Commerce Commitment
Consumers
Providers
Merchants
Governments
• Govern and guide international
e-commerce development
• Inform e-commerce industry
with standard reporting
• Proactively listen and respond to
needs of key stakeholders