News Archive

A brake to eCommerce

  • As for 2011, eCommerce in Italy is still struggling to take off with the rhythm hoped.

As for 2011, eCommerce in Italy is still struggling to take off with the rhythm hoped, especially  when compared with a significant increase in investment online (those ads have been an increase of 20% in 2010, Nielsen). The reasons for this slowdown can be exemplified in two recent  news: the fines  imposed by the Antitrust Authority to the online travel agencies and the EU directive being approved on the costs and delivery times of goods sold through eCommerce.

The first case concerns the fine that the Antitrust Authority has recently give to the three giants of online travel in Europe: Expedia, Opodo and eDreams. The reasons for the sanctions have been identified in a non- transparent attitude towards consumers and “unfair trade practices.”  It seems that the prices do not correspond to the actual cost that the consumer would have incurred and that the services of reservation, cancellation and complaint did not enjoy adequate clarity regarding the costs and procedures.

The amount of penalties over the three Antitrust investigation has come to touch € 415.000, distributed to the different actors: Expedia inc. was fined for € 210.000, Expedia Italy for € 45.000, eDreams for € 135.000 and Opodo for € 21.000. In a sector such as tourism, which in recent years has invested significant resources in digital instruments, which is the biggest  ​​invester in Italy for eCommerce (almost 3 and a half billion euro invested in 2010, with a growth of 15% compared to 2009) the Authority's action can only  be a hindrance to market growth. Looking at the impropriety of the indicted companies, the amount of sanctions is a risk factor for the entry of new players in this market, not to mention a not- confident attitude in the media booking transaction online by consumers, fearful of providing personal and financial information systems, authentication and virtual shopping.

The second brake to eCommerce arrives, from the European Union. The EU Directive No. 31 of 2000 (implemented in Italy through legislative decree n.70 of April 9, 2003), will soon be changed with the new directive on "consumer rights" and discipline of eCommerce. The new document will include the requirement to distribute the products in all 27 European Union countries and will lengthen the time available for withdrawal.

The consequences for companies involved in eCommerce will be linked not only to the difficulty of managing seven currencies and 25 different languages, but mainly to transport costs. Consumers in all of this will be facilitated about timing and availability of goods, but compared to a natural increase in prices and freight rates. The warning about possible damage from this legislation are run by trade associations throughout Europe which accounted for 50% of the fund and which the major players are Fevad (Fédération e-commerce et vente à distance), English IMRG (Interactive Media in Retail Group) and the Italian Netcomm (Italian Consortium of e-commerce). Netcomm made a figure on the impact of the new directive: if the cost of eCommerce today worth € 5.7 billion a year, with the new legislation, the value would rise to 15.6 billion €, with an increase of 10 billion that would fall into the pockets of 150 million consumers online and distributed throughout Europe, including 10 million Italian consumers.
Faced with these constraints, small businesses overlook eCommerce and the emerging start-ups will have to deal with a difficult and costly market environment, in which only companies with an organizational structure appropriate and the necessary funds, will be able to carve out enough space in the electronic marketplace.

Data sources: Censis, Netcomm & ContacLab.