Europe

E-commerce is growing by leaps and bounds. By 2003, the number of people buying on-line will have trebled and transactions will have increased in value twenty-fold. By this time, it is expected that Europe’s on-line population will have exceeded America’s and companies connected to the web will account for some 80% of the European GDP.

E-commerce has been broken down into all kinds of categories based on who is selling to whom. The focus has generally been on Business-to-Consumer (B2C) and Business-to-Business (B2B). However, there is also government to business, government to consumer and vice versa in both instances, as well as consumer to consumer and consumer to business.

Definitions

There are many different formal definitions of e-commerce and e-business. For the purposes of this guide, e-commerce refers specifically to buying and selling products or services over the Internet. E-business refers to all aspects of doing business electronically. The E-commerce Directive - mentioned many times in this guide - refers to information society services.

As is clear from their names, B2B is a business selling to other businesses while B2C is a business selling to consumers. B2B exploits Internet technologies to re-engineer processes along the organisation’s value chain in order to lower costs, improve efficiency and productivity, shorten lead times, and provide better customer services.

B2C e-commerce does not present such clear improvements in the value chain, but has certainly received the lion’s share of attention. B2C widens a business’s potential market to include much of the world and has the potential to provide convenience to consumers, particularly those not near shopping centres. Much has been said about consumers benefiting by being able to search and buy from the merchant offering the best price, but research indicates that this is not happening to the extent expected. It is likely that consumers are also looking for added value, merchants they can trust and proximity (to ensure prompt delivery of their purchase).

The European Union and Member States have been supporting e-commerce for years through a variety of means from developing a legislative framework to providing funding for research and development. Governments have also supported awareness-raising initiatives, training schemes and other pro-e-commerce activities.

eEurope is an initiative which aims to get everyone in Europe – every citizen, every school, every company – on-line as quickly as possible. The eEurope initiative builds on the current policy framework, concentrating on priority actions to overcome handicaps in Europe that are holding back the rapid uptake of digital technologies. eEurope actions are:

A key barrier to the take up of Internet use in Europe has been comparatively expensive telecommunications costs established by state-owned telecommunications services. Therefore, the European Commission has taken the initiative to liberate the market for telecommunications infrastructures and services in the European Union as of 1 January 1998. Today there are 900 telecommunications enterprises on the European market. The prices for long distance calls have decreased in most European markets by 40 %. In many countries, the consumer can gain Internet access via a TV cable. Technological change will continue to make connecting to the Internet even easier. Faster home connections and mobile access to the Internet will vastly improve web site access.

Europe has a leading role in mobile communications and digital TV, both of which are user-friendlier to the non-technical person than a PC. Mobile phone ownership and use is high in Europe. In 1999 there were 140 million mobile phones in use (compared to 80 million in the US). If mobile devices connecting to the Internet and the infrastructure are fit enough, the number of “internauts” in Europe could increase from 50 million today, to 130 million in the year 2003. For the time being, however, the costs for Internet surfing via mobile phone are too high. As a result, the Commission has started another competition-sector specific campaign against roaming prices as well as for local telephone tariffs, which are still monopolised in many countries.

1. The State of E-commerce in Europe