Virtual retail enjoying boom amid bad times
- Source: Global Times
- [02:19 November 16 2009]
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Internet shopping is booming throughout the world because people and businesses are looking for bargains and new outlets in bad times, according to a report by the Organization for Economic Cooperation and Development (OECD).
But the study also warns of problems and consumer concerns keeping online shopping from reaching its full potential.
The goods may never arrive, purchases may be defective and payment information could be stolen.
Those are just a few of the obstacles to increased cross-border trade, which the OECD lists in a report entitled "Empowering e-consumers," in preparation for the upcoming December 8-10 conference in Washington, DC, to focus on strengthening consumer protection in the virtual economy.
"The financial and economic crisis appears to be giving e-commerce a boost as consumers search for ways to reduce expenditures by purchasing items online," the OECD said, adding, "The savings can be substantial."
It cited a study showing that shoppers in Britain, Germany and France can save 17 percent by buying electronics goods, DVDs and clothing online rath-er than in physical stores.
In the US, online sales for 80 retailers rose an average of 11 percent in the first quarter of the year.
Taobao, China's leading online business platform, reported trade volume of 80.9 billion yuan ($11.9 billion) in the first half, close to the total 99.96 billion yuan ($14.64 billion) of 2008, and it expected to have a 600 million yuan ($88 million) traded daily in the fourth quarter of this year.
Helping to spur electronic commerce is the growth in mobile-phone use. The number of mobile-phone subscribers grew at an average rate of 30 percent a year from 1993 to 2007 in the 30 economies in the OECD.
But the e-trade revolution is being held back by hidden frontiers, like concerns over privacy of personal information, language problems, delivery costs and taxation and regulation barriers, the OECD warned, saying that its fate "depends for a large part on the level of confidence that consumers have in online shopping."
It noted that half of the cross-border complaints and disputes filed with the European Consumer Center Network stemmed from purchases made over the Internet.
"Delivery problems and dissatisfaction with the products purchased were the leading reasons for the complaints, accounting for 75 percent of the total," the OECD said.
While the Internet may have made it easier to buy products from foreign businesses, consumers have shown themselves reluctant to do so, the OECD said, quoting a study that found 33 percent of EU consumers purchased online last year, but only 7 percent bought goods from another country, the re-port said.
But there is little doubt about the economic impact of online advertising. Directly employing more than 1.2 million people, the annual contribution of online advertising amounted to $300 billion in the US.
AFP/Global Times
