Interviews
E-commerce taking off, but not a high flyer
09 Feb '07
4 min read
While the internet is being recognised as a sales channel by a growing number of companies and consumers, the market share achieved by B2C e-commerce as a share in total sales is still relatively small. The quite modest progress is attributable to the fact that online shops still fail to respond to the special requirements of distance trading in the anonymous digital world. In particular, there is a wide gap between delivery and payment both in terms of location and time in B2C e-commerce.
The risk inherent in the payment transaction, which has to be borne by one of the two – mutually unacquainted – business partners, is seen as a great challenge. So it is particularly the conventional payment systems that stand in the way of success for B2C e-commerce as they cannot adequately meet the special demands in performance settlement. Especially smaller e-shops without adequate financial and personnel resources or their own invoicing department – which make up the bulk of online providers in B2B e-commerce – are struggling with the lack of tailor-made payment systems.
Despite these obstacles, turnover in B2C e-commerce in Western Europe looks set to grow at double-digit rates up to the end of the decade. This respectable growth is from a relatively modest base, however, i.e. current annual turnover of roughly EUR 130 bn or one-seventeenth of total retail sales in western Europe. So, in absolute figures B2C e-commerce will remain some way below potential on amedium-term horizon.
The Study concludes:
- Innovative digital technologies have wrought fundamental changes in the trade in goods and services
- Digital web portals provide greater transparency in B2C e-commerce as a more sophisticated form of global distance trading
- This transparency is making B2C e-commerce popular across broad sections of the world's population
- An analysis of the shops, shoppers and goods traded in B2C e-commerce reveals numerous peculiarities ...
The risk inherent in the payment transaction, which has to be borne by one of the two – mutually unacquainted – business partners, is seen as a great challenge. So it is particularly the conventional payment systems that stand in the way of success for B2C e-commerce as they cannot adequately meet the special demands in performance settlement. Especially smaller e-shops without adequate financial and personnel resources or their own invoicing department – which make up the bulk of online providers in B2B e-commerce – are struggling with the lack of tailor-made payment systems.
Despite these obstacles, turnover in B2C e-commerce in Western Europe looks set to grow at double-digit rates up to the end of the decade. This respectable growth is from a relatively modest base, however, i.e. current annual turnover of roughly EUR 130 bn or one-seventeenth of total retail sales in western Europe. So, in absolute figures B2C e-commerce will remain some way below potential on amedium-term horizon.
The Study concludes:
- Innovative digital technologies have wrought fundamental changes in the trade in goods and services
- Digital web portals provide greater transparency in B2C e-commerce as a more sophisticated form of global distance trading
- This transparency is making B2C e-commerce popular across broad sections of the world's population
- An analysis of the shops, shoppers and goods traded in B2C e-commerce reveals numerous peculiarities ...
Dr.Stefan Heng, Senior Economist (Deutsche Bank Research)
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