Will the EU geoblocking ban change Polish e-commerce?

As of December 3, online stores cannot hide products from Internet users from other EU countries or block their purchase. Buyers have - at least in theory - reason to rejoice. But what about the sellers? How will the geoblocking ban affect Polish e-commerce, forecast experts of the platform Shoper.

According to the European Commission, 63 percent of stores operating in the EU used geo-blocking, preventing customers from other countries in the community from making purchases. The system recognized by the IP address of the device what country the visit was from and prevented Internet users from browsing products, or redirected them to a local site with more expensive and poorer offerings. Sometimes the blocking only revealed itself at the payment stage, when the credit card number turned out to be assigned to a foreign bank. This was especially true for customers from so-called "new Europe," who could not buy electronics or clothing in Western stores at the same low prices as residents of so-called "old Europe" - from Germany or the UK.

- Such practices have been typical of large corporations and marketplaces trying to capitalize on their presence in different countries and make money on price differences. Small and medium-sized stores tended to focus on operations in their own country. Selling abroad required adjusting to different tax laws, and that's a lot of work, so additional costs for a relatively small scale. Not surprisingly, many stores were afraid to open up to foreign markets. So far, less than 1 percent of stores on our platform allow payment in foreign currencies, and only 1.5 percent of sites are available in languages other than Polish, says Lukasz Kozlowski Customer Success Manager of the platform Shoper, on which 5 percent of transactions are made by foreign customers, "We expect that the new regulations may change this," the expert adds.

Shipping a gateway in new regulations

In theory, the geoblocking ban seems revolutionary. For several days now, a French store cannot block our access to its own products or redirect us to its Polish subsidiary, where they cost more. However, the most important effect of the compromise in the negotiations over the new regulations between EU institutions and member states is the shipping of the product to the border - no store has been obliged to do so. If our French store does not feel like shipping purchases to Poland, we will have to pofatigate to France for the goods we buy there. Which, of course, in practice, effectively discourages the purchase.

- I wouldn't be surprised if six months from now the data shows that not much has changed. Polish consumers won't move online to stores from Germany or the Czech Republic if the only way to buy them is in person. So our stores should not lose customers," assesses Łukasz Kozłowski of Shoper. - On the other hand, the freedom to determine the extent of shipping offered is a convenient gateway for them to withdraw from operating abroad if they don't feel like it. Of course, intermediary companies may appear, providing services to "reroute" parcels from a store to another country, but it is difficult to imagine the scale of such activities that would change the market. - notes an expert Shoper

Will it be easier for small e-stores?

EU regulations are simplifying the operations of e-shops in the European Union. As emphasized by MEP Róża Thun, who is working on them, from now on Polish sellers can sell their products under national rules, e.g. charging only Polish VAT rates as long as the value of their cross-border sales does not exceed €10,000 a year.

- For small stores, this could be a boost to growth. So far, the share of the number of transactions from abroad in Shoper stores hovers around 5 percent, with no upward trend. Once the rules are simplified, probably more sellers will decide to expand. Formalities, however, are just the beginning. To be a real success, it is not enough to add product descriptions in English or another local language, notes Artur Halik, Head of Shoper Premium. - Support for the country's popular payment methods and fast and inexpensive shipping are key. The card payment method available in the store (which is the most popular payment method in e-commerce in Germany), may turn out to be completely wrong for the Czech Republic, for example (where Czech banks' PayByLink payments are more popular). In terms of logistics, fulfilment companies (which handle the logistics process comprehensively) can certainly become a support for Polish sellers, thanks to their competitive shipping prices. So it is worth preparing not only in terms of marketing strategy, but first of all in terms of the habits of buyers in a given market, the expert suggests.

In conclusion, before starting marketing activities in a given market, the habits of its customers should be analyzed. Guided by them, the seller should decide what elements and integrations to introduce in the store platform used. The most important of these are:

- Introduction of content preferably in the local language,
- introduction of the most popular payment methods (introducing appropriate integrations in the store),
- delivery methods according to preference and competitive rate,
- integrations with marketplace type platforms (to automate the sales process and constantly update inventory globally),
- consider opening a business or branch office in a particular country (for tax purposes and possible warehousing)