PublishedOctober 14, 2015

Digital Single Market: A Reality for Millions of Internet-enabled Businesses

Brussels, BELGIUM — An integrated, functioning Digital Single Market (DSM) is reality for a huge number of European businesses. This is the conclusion of eBay’s newest study “Empowering People and Creating Opportunity in the Digital Single Market” which reveals that an impressive 93% of businesses using eBay in Europe to engage in cross-border commerce. The majority of these businesses are micro companies with less than ten employees.

At yesterday’s presentation of the study, Paul Todd, eBay’s Senior VP Europe, explained how the Internet enabled “connected commerce” — which is multi-device, multi-channel and multi-national. In this environment, the Internet and innovative e-commerce platforms have leveled the playing field for conducting business. While exporting has traditionally been the preserve of bigger corporations able to cope with legal and financial challenges, the Internet has ‘democratized’ commerce by opening up the world to small players. The study found that the costs of carrying out commerce over distance within the EU are four times lower on eBay when compared to traditional commerce.

Between 2010 and 2014, the number of EU firms on eBay selling to 15 or more different countries has increased by 48%. Today European businesses on eBay’s platform sell on average to 18 countries. This means that the e-commerce platforms play a key role in making the DSM a reality for sellers. However, given the global reach of the Internet, European sellers have started to look far beyond Europe. Ebay’s numbers reveal that 39% of European businesses on the platform that engage in cross-border commerce serve four (!) or more different continents. In essence, Internet technology has enabled the ‘small guys’ to run global businesses. Statistics from other e-commerce marketplaces confirm this development: Amazon announced that in 2014 businesses selling on its EU websites earned a record EUR 2.8 billion in revenue from exports within the EU. In addition, the number of businesses exporting to customers outside of their home country increased nearly 50% between April 2014 and April 2015.

From a more social perspective, e-commerce platforms contribute to a more inclusive growth opportunity. In the words of the study, the “online commerce platform model is eroding the historical link between entrepreneurial success and population density, GDP per capita, and proximity to metropolitan areas”. In practical terms, e-commerce has given new economic opportunities to more remote, less prosperous regions by ‘connecting’ businesses to international trade. In a lot of countries in the EU, the ‘digital density’, i.e. the level of small online business activity, of more remote areas is higher than in more prosperous, urban areas.

These numbers show that small online businesses are already driving the goals of the DSM Strategy. The role of regulators should be to foster the vast growth opportunity brought by e-commerce. The legislative framework of the E-Commerce Directive created an environment in which online e-commerce platforms were able to thrive creating opportunities for millions of small businesses — that framework needs to be preserved. In addition, more needs to be done to tackle unjustified online sales restrictions imposed by certain manufacturers that prevent small businesses from using e-commerce platforms as a sales channel. The numbers presented above show how important these platforms are for European businesses. It is in no one’s interest to choke off their growth potential.

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