Exploring E-Commerce at the European Business Summit
Last week’s European Business Summit brought together leading figures in the world of business, politics and research with the aim of exploring some of today’s key issues.
At the event, entitled “Europe: The Way Forward”, I was keen to sit on the panel of a roundtable debate that focused on the digitalisation of the internal market. The discussion explored the importance of member states working together to take advantage of the benefits of e-commerce.
In summary, a network of ever-expanding “sharing economies” have disrupted the status quo. They have challenged policymakers, won the affections of consumers and, in some instances, made older business models redundant. The likes of Uber and Airbnb are just two examples of digital companies reshaping the landscape of their respective marketplaces.
The internet’s dominance is growing in Europe, and e-commerce is thriving. A recent report commissioned by Ecommerce Europe – which represents over 25,000 online shops through 20 national associations – found that the online market continued its double-digit growth in 2015, at a rate of 13.3 percent. Total online revenue for the year was worth an estimated 455.3 billion euros.
However, the expansion of the internet throughout Europe has been uneven and, as a result, there is a sharp divide between East and West. Last year, Western Europe region generated 252.9 billion euros in online sales, whereas Eastern Europe contributed just 24.5 billion. The report predicts that in 2016 – although growth will slow to 12 percent – goods and services will be worth 510 billion euros. An estimated half of which is expected to come from Western Europe. In real terms, this divide means that we are yet to unlock the full potential of the e-commerce market in Europe.
As a result of the fast-paced nature of e-commerce, European strategists must respond accordingly. To take advantage of the benefits of e-commerce, we need a uniform regulated market. We need to avoid national protection and find the right balance between unified legislation and continuing to deliver the best possible service to consumers. There needs to be a guaranteed level of protection of consumer rights throughout Europe, which the European Commission should look to achieve.
We want to see the same level of protection of consumer rights across Europe and we are looking to the European Commission to support this. The aim should be to facilitate growth through the removal of barriers, both political and business alike, and the identification of instances of geo-blocking – where it’s not possible to purchase products in certain countries due to poor availability or logistical operations. We need to see a situation where products and services can be bought at the same price, regardless in which country the consumer resides. At present, there are different set prices for parcel deliveries depending on location. However, we’d like to see greater trust amongst European customers and clear cross-border pricing.
These are the challenges that we face, and they are issues that need to be rectified. At DS Smith, we are committed to innovation and forward-thinking. We are constantly looking at how we can deliver more sustainable packaging and smarter business solutions for our customers. In Europe, approx. 157 kg of packaging waste is generated per inhabitant each year. We believe that we can greatly reduce this figure, by designing packaging with recycling in mind. Our goal is to make recycling easier for the consumer which, in turn, is better for the environment.
Furthermore, we estimate that as much as 50 percent of packaging shipped by online retailers consists of fresh air. This means that currently packaging is bigger, and more expensive, than it needs to be. This affects everything from manufacturing to warehousing to logistics costs. By creating smarter packaging options, we not only encourage greater sustainability but reduce both our upfront costs and our carbon footprint.
We are also investigating omni-channel e-retailing – which we believe will be the next big trend. This means understanding our customer’s brands from the perspective of the consumer and how they interact with different brands across a variety of environments. By considering things from the customers viewpoint, we are better able to deliver seamless and consistent solutions that improve the relationship between retailer and consumer.
This is an approach that we feel the Commission should take, and we recommend that it considers customer expectations and experiences, and treats e-commerce as a separate retail entity, when it comes to policymaking.
We cannot simply adjust existing legislation to answer today’s challenges. We need to come up with new regulations that confront the unique challenges posed by e-commerce and the difficulties inherent in transferring goods between countries. The current standard of testing is antiquated; a proactive way of operating is needed, rather than a reactive one.
We therefore call upon the Commission to provide more support to businesses, to help them take advantage of the potential e-commerce can offer.