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Shoppers blocked from buying across EU borders

Tags:
Cross-border,
EU,
E-commerce

Carly Newman ZDNet UK

Published: 23 Oct 2009 17:59 BST

The European Commission has called for more progress to be made on simplifying cross-border online shopping, after its research found that 6 out of 10 shoppers who tried to make purchases from another country had the transaction blocked.

Maglena Kuneva, the European commissioner for consumer affairs, pointed to language problems, regulatory barriers to business and a lack of trust on the part of consumers as factors holding back cross-border shopping.

"As we stand today, we cannot shop cross-border online within the EU. There is no European retail market online, but instead 27 inefficient mini-markets. We have the technology for a big market but not the trade. And this is generating a lot of frustration among European citizens who expect and deserve better," Kuneva said in a speech accompanying the release of the EC study on Wednesday.

An extensive mystery shopping exercise was carried out for the study, where shoppers from across the EU's 27 member states tried purchase 100 popular products. A total of 10,964 individual tests were carried out, which found that in all but two countries, the odds of completing a successful cross-border purchase were less than 50 percent.

The EC report said that 60 percent of the inter-European transactions could not be completed because the trader did not have the means to offer cross-border payment or did not ship the product to the consumer's country. For computer and electronic equipment, the blockage rate was 80 percent.

"The results of this research are very striking," Kuneva said. "We now have concrete facts and figures showing the extent to which the European single market for consumers is just not happening in online retail," said Kuneva. "Shoppers are still largely confined within national borders."

Kuneva said that although 50 percent of European traders have an online outlet, only 21 percent of traders sell at a distance across borders. In addition, only 7 percent of Europeans shop online across borders.

As part of its strategy to tackle the barriers, the Commission has encouraged online businesses to create multi-country or pan-EU websites and to adopt domain names ending in .eu. According to the Commission, major search engines and price comparison websites are more likely to offer search rankings or price comparisons that represent cross-border or domestic offers.

The EU has also tabled a proposal targeting the retail of electrical goods, which are among the highest in demand online. The proposal aims to harmonise the rules on waste electrical and electronic equipment (the WEEE Directive) and reduce the administrative burden, which would allow online retailers to register in one country for their activity in the entire EU, instead of having to register in each country separately.

Under its strategy, the EU also plans to end the fragmentation of European consumer laws by imposing a set of EU-wide rules. It also hopes to simplify VAT and copyright regulations, improve cross-border payment systems and clamp down on unfair commercial practices.