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Online retail growth ‘stunted by new directive’


Online retailers face an extra €10 billion (£8.83 billion) delivery charge cost per year following a decision made in the EU Parliament last week, according to industry representative group IMRG.

The organisation estimates that the voting through of draft amendments to the Consumer Rights Directive will increase the cost of EU returns to e-retailers from €5.7 billion to €15.7 billion.

IMRG bases this on the prevailing rate of 90 per cent domestic and ten per cent cross-border returns, and suggests that the growth of the digital economy will be seriously stunted as a result, with a number of small to medium-sized enterprises (SMEs) likely to fall by the wayside.

James Roper, CEO at IMRG, called the new EU legislation “some of the most disastrous for the online industry yet” and said that it actually erodes the benefits associated with internet shopping that the directive seeks to provide.

Roper added: “As well as being unnecessary the new amendments would inevitably lead to significant price increases being forced onto already hard-pressed consumers, pushing up prices across all retail channels, and disadvantaging SMEs to the point where many would be forced to cease trading online altogether.

“The internet has introduced levels of choice and price competitiveness that have greatly benefited consumers around Europe and the world, but this will be eroded if these damaging proposals go through, as the efficiency and transparency of the internet will largely be lost.”

He also called on EU politicians to conduct “in-depth research and consult with those who actually operate the industry” before making decisions that can disrupt the development of e-commerce, which he views as a fundamental part of Europe’s economy.

IT solutions provider Open Plus also opposes the amendments to the directive, and the company’s CEO Andrew Sykes wrote a letter to MEPs ahead of last week’s vote urging them to reject many of the proposals.

Sykes said that care must be taken to ensure the legislation does not undermine the value of the e-tail sector by introducing measures that restrict retailers’ innovation in customer experience management.

Published on Thursday 31 March by Editorial Assistant

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