#DigitalSingleMarket may inspire #China for adopting eWTP proposal
Today, it is not possible to talk about e-commerce without mentioning Alibaba and its charismatic founder Jack Ma. Home to the world's largest population of netizens, China has surpassed the US to become the world's top e-commerce market, with online transaction totaling 16.4 trillion yuan ($2.5 trillion; 2.19 trillion euros; 2 trillion pounds) in 2015, writes Luigi Gambardella.
In coming years, China is set to contribute to the explosion of global e-commerce, turning the planet into one big shopping mall, that allows consumers on one side of the world to interact with traders on the opposite side. Ma's next ambition is to make the world a village.Alibaba's global marketplace AliExpress is forcing the EU to reconsider geo-blocking. This is the practice applied until now in the EU's e-commerce sector, whereby European consumers can be "forced" to shop on the "national" website of international groups. They are redirected to these national sites on the basis of their IP address.
Moreover, consumers may face restrictions on online payment, diverse delivery fees where the price differences can be huge, or extremely complicated return policies, just to name a few. AliExpress provides a simple, transparent alternative that attracts ever more European consumers.
On the other hand, Chinese consumers could be confronted with similar difficulties when buying from overseas. With this in mind, Ma proposed creating an electronic world trade platform (eWTP) at the B20 and G20 meetings in Hangzhou beginning in October.
The eWTP is a bold proposal, aiming to include SMEs in the global industrial chain as well as giving consumers easier access to goods, through a transparent and fair platform where online transactions flow freely and people from all over the world are able to trade with whoever they want.
To make it successful, it requires careful examination. In the early stages, useful tips from experienced players should be collected in order to develop solid rules and strategy, and the EU Digital Single Market Strategy has a lot to offer.
The European Union realizes that current existing barriers online not only make European citizens miss out on goods and services but also limit the horizons for internet companies and startups. To lift those limitations, as well as make online transactions easier, the European Commission introduced the strategy to tear down regulatory walls and turn 28 national markets into a single one.
If this succeeds, it could contribute 415 billion euros per year to the European economy and create a generous number of new jobs.
The ChinaEU business association has identified three courses of action that are crucial to favor cross border e-commerce:
Ending discrimination on the Internet based on nationality or place of residence.
Prohibiting e-commerce sites from re-routing the consumer to a country-specific website, or asking for payment with a debit or credit card from a certain country.
Making cross-border parcel delivery more affordable and efficient.
Consumers and retailers should benefit from affordable deliveries and convenient return options, even to and from peripheral regions. Consumers and small businesses complain about problems with parcel delivery - in particular high delivery charges in cross-border shipping and bureaucratic custom clearance procedures.
Self-regulation to achieve effective consumer protection on the web, thus increasing consumer trust.
The idea of a top-down harmonization of consumers' rights (after sales conditions, unfair commercial practices) is a utopia. We should trust those involved to self-regulate their marketplace. International standards should be defined and governments' role should be to certify marketplaces and review, from time to time, compliance with these standards.
Instead of "cross border e-commerce", actually we are talking about "e-commerce without borders", as the ultimate goal is to provide consumers with freedom to shop online without limitations.
The EU Digital Single Market may offer China some inspiration to improve its current cross-border e-commerce policy or eventually to implement the promising eWTP proposal. Most important, once the EU's 28 markets succeed in merging into one, it will open up a huge online market for China with only one rule to follow.
Both sides should inject impetus for common e-commerce regulation. When the wall between the Chinese and European e-commerce markets is knocked down, it will be a giant step for truly realizing e-commerce without borders.
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