The trouble with the internet: people still too different

E-commerce utopia remains out of reach.

The internet knows no borders. That’s the way most people tend to view it, at least. But as online commerce comes of age, this utopian view seems increasingly naive.

As an increasing number of businesses look to take advantage of the web as a medium for commerce, not just communication, many of them are finding themselves frustrated by the fact that… well, people are different.

The recent Globalocity eCommerce conference saw several hundred retailers, Silicon Valley whizz-kids, and finance experts gather to discuss all things online shopping.

At the event I spent some considerable talking to people from a number of successful US retailers – department stores, fashion brands, even travel agencies - many of whom are very well-established global brands. It was clear that many of them were struggling with the fact that launching a globally-accessible eCommerce portal has not opened the flood gates for hoardes of overseas consumers, desperate to buy US consumer goods.

What is stopping them? Surely given the opportunity everyone would prefer to shop at US department stores, right? Perhaps... But they a good reason, and more to the point, they need to be able to pay for their goods in a way that suits them. The newsflash? Not everyone in the world has a credit card.

So, it begins to become apparent, that rolling out an eCommerce strategy is not really all that different to setting up a physical presence in new markets - minus the some substantial property and staffing costs, of course.

Businesses still need to invest in the market - understanding their consumers, not just in terms of what they wish to buy, but how they wish to buy it.

For those US retailers at Globalocity, the markets really getting the saliva flowing were Latin America (Brazil in particular), Russia and continental Europe. But frustrations abound when it comes to actually getting people to pay for things.

Anyone who has spent any time looking at the Brazilian retail sector will know that consumer spending habits can only be described as unique.

Having the ability to pay for goods in installments is essential in Brazil - people  expect to be able to spread their payment for everything (even basic goods like groceries) over a long periods of time. And a payment system - the Boleto Bancario - has been developed specifically to meet this requirement. The challenge now, though, is replicating that online.

And, of course, it is not just Brazil that requires a bespoke solution. Cash looms large in Europe and arguably more so in Russia. And of course, cash has no place in the e-commerce ecosystem. And yet again, retailers who think that offering customers the ability to pay by credit card is sufficient,  come a cropper, and quickly find out that alternatives have to be found.

The obvious alternative - cash on delivery - creates problems for the retailer, who has to ship the goods before receipt of payment, but new companies are developing neater systems, most notably the Qiwi terminals that enable Russian consumers to change cash into electronic money.

In short, every market has its quirks, and even in e-commerce, national borders are still very much in place.

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

Photograph: Getty Images

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

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Theresa May can play big fish with devolved nations - in the EU she's already a nobody

The PM may have more time for domestic meetings in future. 

Theresa May is sitting down with representatives from Scotland, Northern Ireland and Wales on Monday to hear their concerns about Brexit. 

For the devolved nations, it is the first chance since the seismic vote in June to sit down at a table and talk to the Prime Minister together. 

May has reportedly offered them a "direct line" to Brexit secretary David Davis. It must be a nice change for her to be the big fish in the small pond, rather than the small fish in the big pond that everyone's already sick of. 

Because, when it comes to the EU, the roles of Westminster and other nations is reversed. 

Brexit was small potatoes on the menu of Theresa May’s first European Council summit. It may hurt British pride but the other 27 heads of state and government had far more pressing issues on their plate to worry about.

So, it was an awkward debut Council evening meal of lamb and figs for Prime Minister Theresa May and dinner was served with a large reality check.

As May was later asked at her press conference, why would anyone listen to someone who already has one foot out the door?

Britain is in limbo until it triggers article 50, the legal process taking it out of the EU. Until that happens, it will be largely and politiely ignored.

May’s moment to shine didn’t come until 1am. She spoke on Brexit for “five minutes maximum” and said “nothing revolutionary”, EU sources briefed later.

May basically did that break-up talk. The one where someone says they are leaving but “we can still be friends”. The one where you get a divorce but refuse to leave the house. 

It was greeted in the way such moments often are – with stony silence. Brexit won’t be seriously discussed until article 50 is triggered, and then the negotiations will be overseen by the European Commission, not the member states.

As became rapidly clear after the vote to leave and in sharp contrast to the UK government, the EU-27 was coordinated and prepared in its response to Brexit. That unity, as yet, shows no sign of cracking.

German Chancellor Angela Merkel later damned May with faint praise. She hadn’t said anything new but it was nice to hear it in person, she told reporters.

Merkel, as she often does, had a successful summit. She needed Council conclusions on migration that would reassure her skittish voters that the doors to Germany are no longer thrown wide open to migrants. Germany is one of the member states to have temporarily reintroduced border checks in the passport-free Schengen zone

The conclusions said that part of returning to Schengen as normal was “adjusting the temporary border controls to reflect the current needs”.

This code allows Merkel and her Danish allies to claim victory back home, while allowing Slovakia, which holds the rotating Presidency of the EU, enough of an excuse to insist it has not overseen the effective end of Schengen.

But Merkel’s migration worries did not provide hope for the British push for immigration controls with access to the single market. The Chancellor, and EU chiefs, have consistently said single market access is conditional on the free movement of people. So far this is a red line.

Everyone had discussed the EU’s latest responses to the migration crisis at a summit in Bratislava. Everyone apart from May. She was not invited to the post-Brexit meeting of the EU-27.

She tried to set down a marker, telling her counterparts that the UK wouldn’t just rubberstamp everything the EU-27 cooked up.

This was greeted with a polite, friendly silence. The EU-27 will continue to meet without Britain.

Francois Hollande told reporters that if May wanted a hard Brexit, she should expect hard negotiations.

Just the day before Alain Juppe, his likely rival in next year’s presidential election, had called for the UK border to be moved from Calais to Kent.

Hollande had to respond in kind and the Brussels summit gave him the handy platform to do so. But once inside the inner sanctum of the Justus Lipsius building, it was Syria he cared about. He’s enjoyed far more foreign than domestic policy success.

May had called for a “unified European response” to the Russian bombing of Aleppo. It was a break in style from David Cameron, who is not fondly remembered in Brussels for his habit of boasting to the news cameras he was ready to fight all night for Britain and striding purposefully into the European Council. 

Once safely behind closed doors, he would be far more conciliatory, before later claiming another triumph over the Eurocrats at a pumped-up press conference.

May could point to Council conclusions saying that all measures, including sanctions, were on the table if the Russian outrages continue. But her victory over countries such as Italy and Greece was only achieved thanks to support from France and Germany. 

The national success was also somewhat undermined by the news Russian warships were in the Channel, and that the Brexit talks might be in French.

But even warships couldn’t stop the British being upstaged by the Belgian French-speaking region of Wallonia. Its parliament had wielded an effective veto on Ceta, the EU-Canada trade deal.

Everyone had skin in this game. All the leaders, including May, had backed CETA, arguing the removal of almost all custom duties would boost trade the economy. Belgium’s Prime Minister Charles Michel was forced to tell exasperated leaders he could not force one of Belgium’s seven parliaments to back CETA, or stop it wrecking seven years of painstaking work.

As the news broke that Canada’s trade minister Chrystia Freeland had burst into tears as she declared the deal dead, everyone – not the first time during the summit – completely forgot about Britain and its referendum.

Even as the British PM may be enjoying a power trip in her own domestic union of nations, on the international stage, she is increasingly becoming irrelevant. 

James Crisp is the news editor at EurActiv, an online EU news service.