French e-commerce sites shunned by foreign consumers

While Austria has the best trade balance for cross-border shopping, France, on the other hand, has a negative trade balance, according to a study carried out by the price comparison company Idéalo.

Since last Monday, freedom of movement in the European area has extended to the field of e-commerce. With the end of geo-blocking adopted by the European Commission, Europeans will now be able to access goods and services online, wherever they are in the Union. “We want a barrier-free Europe, which also means removing obstacles to online shopping,” said Commission Vice-President for the Digital Single Market, Andrus Ansip.

Within the European commerce zone, almost 9% of e-commerce companies make cross-border sales, and only 15% of citizens who buy products online from other countries in the zone. Before the end of geo-blocking, half of the sites did not allow consumers to buy their products in a country other than their own, thus redirecting them to the local version of the multi-country site. In fact, the aim of this reform is to make European trade more fluid, by allowing consumers on the one hand to benefit from the best prices, and on the other hand to businesses to expand their customer base beyond national borders. The end of geo-blocking is an important element of the digital strategy of the single market, in particular to avoid any discrimination in sales, depending on the nationality and place of residence of the buyer.

Austria has the best trade balance

According to the study carried out by the price comparison, Austria has the best trade balance when it comes to cross-border shopping. Thus, for an Austrian who buys on a foreign online site, nearly 15 Europeans buy in Austria. But this high ratio can also be explained by the fact that Austrians buy very little abroad, representing only 2% of the share of the total volume of European cross-border purchases. For its part, the German market also achieves a high turnover thanks to cross-border shopping traffic, with the second best trade balance for its ratio of 9.5.

With a ratio of 0.8, France is the only country, included in the study, with a negative trade balance. Thus, when a French person buys abroad, it is less of a European who buys in France. By generating 24% of purchases abroad from European countries, the French nonetheless consistently practice cross-border shopping.

France, the big loser of cross border shopping in Europe

While France is the second European country that practices cross-border shopping the most, it is ultimately struggling to encourage Europeans to consume on its territory. France appears unattractive with neighboring countries which tend to visit French sites less, and thus capture only 3% of traffic. Nevertheless, France seduces with its high-tech products. The smartphone is the product that most attracts our European neighbors to consume on our sites. Then follows running shoes, sneakers, speakers and photo lenses.

Conversely, Germany very clearly crushes the other European countries, since it receives 83% of the traffic of the European Union from abroad. However, it is our British neighbors who have the highest rate of traffic coming from European countries. The European market leader even notes an evolution of this rate between 2017 and 2018, going from 9.5% to 10.1%.

A strategy to be defined at the national level

In 2018, nearly 63% of online sales sites did not let users buy from another European country, with difficulties for the customer to register to continue the transaction. Only 37% of e-commerce sites allowed customers to buy from another European country, denying them access to the final step of entering payment information.

But for a third of European countries, the main obstacle to cross-bording shopping is that the item cannot be delivered to the country of the potential buyer. With the end of geo-blocking, e-merchants are still free to deliver or not to a country, and more than half of companies who want to sell online see high delivery costs as a problem. For a spokesperson for Idealo, the end of geo-blocking could “give the French merchant site the opportunity to develop platforms adapted to buyers from abroad”. Thus, the strategy of small and medium-sized French companies in terms of sales abroad remains to be defined.

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