Cross-Border Ecommerce Growing Among Germany's Internet Users
While far from ubiquitous, cross-border ecommerce penetration among digital buyers in Germany is on the rise. More than a third of internet users who make at least one retail purchase digitally in 2017 will purchase products from outside the country, according to eMarketer’s first estimate of cross-border shopping behavior among Germany’s internet users.
Germany’s number of cross-border retail ecommerce buyers is expected to grow 13.6% in 2017 to 17.95 million and include 29.7% of the country’s internet users ages 14 and older, eMarketer predicts. A desire for access to a wider range of products available at lower prices than can be found domestically will drive adoption.
Based on October 2016 data from International Post Corp., Germany’s digital buyers are most likely to turn to China, where goods are cheaper, for their cross-border ecommerce buys. Historically, clothing/footwear and consumer electronics have been among the most popular items purchased by the country’s cross-border digital buyers, according to Ipsos and PayPal data. Sports/leisure products have also been particularly popular for Germany’s cross-border buyers, according to PostNord.
One factor that has slowed cross-border ecommerce buyer growth has been concern about the security of personal information on payment platforms. Consumers in Germany typically feel safer paying with cash, or in the case of ecommerce, on account after receiving their purchases, and are more trusting of local retailers, where they can more easily return products. Consumer preference toward local vendors extends to cross-border buying as well. According to Statistisches Bundesamt (Destatis), of the cross-border transactions that take place—aside from those in China—most are with countries in the EU.
The outlook for greater EU purchasing is mixed, however. Some retailers in the EU are opting to not sell products digitally to cross-border buyers and have begun geoblocking their sites from those shoppers to avoid paying value-added taxes (VAT) or costly licensing fees. Likewise, online marketplace bans are in effect to prevent resellers from placing goods on eBay and Amazon.
A planned revision to the Mini One Stop Shop (MOSS) scheme, an online system for retailers to sell products created by the European Commission, will introduce reduced VAT costs. These changes could entice smaller retailers to begin selling products in EU countries outside of their own.