UNCTAD eWeek 2019: Access and trust key to unlocking the potential of the digital economy
This week Consumers International will be at UNCTAD e-commerce week that brings together governments, business and civil society to discuss the opportunities and challenges of e-commerce. In our latest blog, Justin Macmullan outlines some of the key issues facing consumers.
New data released to mark the start of UNCTAD e-commerce week shows that business to consumer e-commerce sales surged to $3.85 trillion in 2017. The number of consumers that made purchases online also grew by 12% to 1.3 billion or one-quarter of the world’s population.
These figures are an illustration of consumers’ enthusiasm for the benefits of shopping online, such as greater choice and increased convenience, but challenges remain in increasing access and trust – particularly in cross border e-commerce.
Increasing access and inclusion
Access to e-commerce is dependent on access to the internet. Although the number of people with an internet connection is rising rapidly, it was only this year that the world marked the point at which half of the world’s population are online. The greatest challenge is in low- and middle-income countries, but in all countries and regions there are areas where consumers are excluded from access, either because they live in relatively remote areas, or are from marginalised groups.
However, the challenge is not only to increase access to the internet. In order to participate in e-commerce consumers also need access to payment services and delivery services. These services also need to be affordable, good quality and relevant to consumers’ needs.
Building consumer trust
With the number of consumers shopping online growing at such a fast rate, it is tempting to think that providing consumers with access to e-commerce services is the only barrier to be overcome, however consumer trust is also an essential ingredient for a healthy digital economy.
According to a 2017 survey, among those consumers who never shop online the main reason they give is a lack of trust. Although most online transactions are completed successfully, there are underlying concerns that regulators and e-commerce providers should address to build confidence and improve the service for consumers.
The most obvious trust issue is in relation to fraud. The Econsumer website, run by the International Consumer Protection and Enforcement Network (ICPEN) which is made up of 35 national consumer protection agencies, gives an indication of the number and variety of scams online. These scams are increasingly sophisticated, and it will take a coordinated effort by all actors to address them. This will include regulators and enforcers setting a clear legal framework and enforcing rules, platforms playing their part by quickly identifying and removing scams and all actors providing consumers with the information they need to better identify scams and report them.
More traditional consumer protection issues are also a major factor in undermining consumer trust in e-commerce. The need to provide clear and accurate information, the safety of the products and access to redress are all issues that are as important – if not more important – when shopping online as consumers are less likely to see the product and meet the retailer before a sale.
The cross border challenges
Trust becomes even more of an issue in cross border e-commerce where consumers are often purchasing from retailers that they don’t know, who operate in countries with different standards and regulations.
UNCTAD figures show that cross border e-commerce now accounts for about 11% of total business to consumer e-commerce sales and whilst it is continuing to increase, at 4% the rate is slower than for all e-commerce.
Consumers International will be hosting a session at UNCTAD e-commerce week, 3-4:30 PM, 1 April 2019, to discuss the particular issues of cross border e-commerce and how new e-commerce trade negotiations might help to improve protection for consumers and build their trust.