Digital contracts: untapped potential
E-commerce has taken the world by storm. However, a large majority of European businesses are yet to adopt the beneficial practices of the Digital Single Market. Currently, only 12% of European retailers sell products online to other EU countries, while 37% of them do it within their own country.
Dissimilar contracts laws
There are a few causes for this situation, the major one being the varying contract laws between the EU countries that affect 39% of EU online sellers.
Hence, to improve this situation and facilitate online trade within the EU, a uniform e-commerce regulatory system needs to be implemented.
From the consumer perspective, non-delivery of orders, delivery of wrong or damaged products, the worry of repairing or replacement of a faulty product are common concerns. These have made buyers impervious to the convenience and choice that online buying offers. Therefore, only 15% of online shoppers buy from other European countries while 44% of them purchase from their respective countries.
Almost 70 million European consumers have experienced problems like those mentioned earlier, with digital content such as games, music and cloud storage. The average rate of resolutions received for problems such as these is only 10%. This has caused great inconvenience for the affected consumer base.
Proposed resolutions to problems
In an attempt to improve the situation, the European Commission has devised two directives: one for Digital Content and the other for Goods. These directives will ensure a uniform contract law system across the EU enabling the easy and economical purchase of goods online and digital content.
On the digital content front, businesses will be able to cut out the costs of legal fragmentation or varied legislation that was occurring due to a lack of a uniform system.
A common system will instill confidence in buyers who will be more willing to make online purchases from other EU countries. It is estimated that these changes can result in a huge online buyer market of 70 million consumers. This will, in turn, open up new markets and expand reach and increase sales, especially for small and medium enterprises.
Contribution towards economic growth
It is said that as European businesses start selling to other countries using the online platform, more consumers will begin using online shopping, both within and outside the continent. Close to 122,000 businesses will begin cross-border trade. 8 to 13 million consumers will be added to the online customer bank.
Europe’s GDP is expected to increase by 4 billion euros from its current level and increased competition will drive consumer prices across the board. Household consumption will increase to 18 billion euros.
The online environment is current, dynamic and evolving every day. Aside from the fact that almost anyone can have access to it, it connects consumers, products and businesses from across the globe. Hence, this is the time for Europe to expand its economy by paving the way in terms of legalities. For more information for contracts and rules applicable to the European digital space, access market research reports on this industry.