In 2017, B2C e-commerce accounted for 72 billion euros in turnover, or more than 8% of retail trade in France. Alongside the big players that we all know, it brings together in France nearly 204,000 players, including an overwhelming majority of very small e-merchants since 95.5% have less than €1 million in turnover. Among them, many people hope to find a source of growth in the development of exports.The calculation seems pretty good, because cross-border e-commerce shows high growth prospects: 55% of French e-merchants already export their products, (although for half of these 55%, exported volumes represent less than 5% of sales), in particular to Belgium (for 83%) and the border countries: Germany (for 65%), the United Kingdom (61%), Spain (60%) and Italy (58%). However, French e-merchants are still lagging behind in comparison to theirs, of which 61% export and 45% achieve between 5 and 20% of their turnover in Europe. How to explain this phenomenon?
Export strategy: where are the French e-merchants?
If we were to build a gradation in the development of an export strategy, we could identify:
- A stage 1 in the development of exports, the majority of which are “small e-merchants”, which is carried out from a single site in French, or even translated into English.
- Stage 2 which consists of developing a dedicated site for each target market.
- A third level of maturity which leads to having, for multichannel players, local physical establishments.
From the customer’s point of view, delivery, both in terms of cost and quality, is both the main incentive and at the same time the main obstacle to purchasing a foreign product.
And this is how logistics becomes one of the key components of export.
To deliver the foreign customer, large traders generally have the ability to set up competitive logistics solutions such as direct injection into a local distribution network (they charter trucks that will deliver a local delivery player, known to consumers. and well established, a postal player for example). Thanks to the significant volumes, it is possible to put the various logistics providers in competition with each other in order to obtain advantageous price and service conditions… and exporting becomes almost [1] child’s play.
Small e-merchants, on the other hand, due to low volumes, skills and limited resources, only have access to a limited choice of logistics schemes. La Poste remains the No. 1 choice (for 71% of small players), mainly thanks to the proximity of collection points (the famous network of post offices)… but also by ignorance of other accessible offers.
New players and new cross-border delivery offers … still rarely aimed at small players
For La Poste, e-commerce has become a major source of growth in the face of plummeting mail volumes and the slowdown in domestic e-commerce. In fact, it now offers the widest range of export delivery solutions, from the small international package, Delivengo, Colissimo, Chronopost, or even DPD; and above all the most accessible physically, thanks to its many collection points. However, this offer remains complex and difficult to read, divided between several entities and sites, and poorly promoted in post offices .
The traditional alternatives that are the expressists [2] and monocolists [3] (UPS, TNT, and other Fedex…) have also well perceived the potential of this market… and the risk of not positioning themselves there, alongside their large B2B customers. These are developing new adapted offers and extending the collection network through the relay point networks that they are gradually buying back: UPS and Kiala, Hermès and Mondial Relay, and DHL and Relais Colis. However, their core target for the moment remains large and medium-sized, and much less the smallest e-merchants.
Newcomers to the sector: quick portraits
The comparators and wholesalers (Boxtal, Packlink …) seek to provide access to these small structures to more competitive pricing conditions, by consolidating volumes, and offer bouquets of logistics, IT and regulations to assist merchants. However, the still limited volumes of these start-up players do not always give them the necessary weight to offer La Poste’s offers, even though they have other players among their partners (especially expressists).
The integrators (BtoCeurope, IMX …) operate a grouping of flows and a massification of shipments, which allows a reduction in the price of transport and delivery, but often lengthens the delivery time, which remains interesting for small e- tradespeople. Large e-merchants like Spartoo are also opening these logistics services to small e-merchants, to make their infrastructures profitable.
Actors like Wing or Cubyn offer 1st kilometer logistics services (pickup ). They remain dependent on carriers to perform the entire logistics service and also experience difficulties in obtaining competitive prices. In addition, their geographic coverage is still very limited.
However, these new solutions still face various shortcomings:
- visibility vis- à- vis ultra-dominant traditional players
- maturity and logistical knowledge among their potential customers, small e-merchants
- international coverage which requires forging partnerships with local distributors.
They therefore have a major promotional and educational effort to make, which requires substantial marketing resources and therefore funding.
And the big winner is… (promise, it’s easy)
Among the new providers directed at online retailers, marketplaces ( marketplaces ) are those that make the best their game, relying in part on a real price competitiveness (through volumes substantial sending, which allows them to obtain unbeatable prices from all service providers including La Poste), and on the other hand on a very large e-merchant customer base.
Among them, and thanks to its FBA (Fulfillment By Amazon) offer, Amazon (we told you that it was easy) is now positioned as a real alternative to logisticians and in particular to La Poste, although it is day his first client. Amazon is able to provide a full service, from the storefront, the sale and the management of the transaction to the completion of the delivery. A solution a priori tempting, which nevertheless presents a serious risk of dependence for the small e-merchant who no longer develops his own skills or logistical resources.
Other players such as Ebay or Etsy (A little market), which do not provide logistics services, seek to position themselves by offering negotiated conditions thanks to the accumulation and rationalization of volumes transported by operators.
In general, the export delivery offer is less diversified in France than in other countries such as the United Kingdom and Germany, where alternative suppliers to the postal player, such as parcel specialists (such as Yodel in the United Kingdom) and wholesalers / integrators (Parcel2go in the United Kingdom, Packlink in Germany, etc.) have a much more developed weight and presence. The latter constitute a preferred solution for small e-merchants.
What exactly are the brakes encountered by e-merchants practicing export?
At PMP, we went to see more closely what exactly were the constraints expressed by French e-merchants. By exchanging with more than 20 e-merchants (various types and sizes), and by conducting a large online survey of e-merchants selling via ebay, five major obstacles stand out:
1 – The cost
Unsurprisingly, the first brake is financial : the cost of solutions limits the price competitiveness of French e-merchants against certain foreign exporters. To satisfy an American customer, a small French e-merchant finds himself at a disadvantage compared to an English or German compatriot, a country where competition between players makes it easier to compare offers, and to access preferential pricing conditions, in particular thanks to to the action of highly developed wholesalers / comparators: in the intra-Europe zone, the differences observed are of the order of 15%, but in distant destinations such as the United States, differences of nearly 50% have been observed between the best French and English offers (PMP / LOGICITES benchmark).
The price limits in particular the export potential of products for which the appetite for “made in France” is very strong (fashion, decoration), in more distant markets such as Asia or the United States: the price schedules, combining significant threshold effects and strong differences by geographical area, are indeed very penalizing for products with low volume and / or weight value. This obstacle is felt particularly strongly in sectors where the value / weight ratio of the product is low, such as textiles, food or mid-range furniture-decoration… and when we know that this cost is still far from” integrate negative externalities linked to transport…
2- Essential services for the customer, which remain absent from certain delivery offers
The delivery times are 2nd expressed logistical obstacle, while delivery at D + 1 becomes the norm domestically.
The management of returns is proving to be excessively problematic, in particular with certain customers for whom it is a cultural essential: this is the case for the clothing sector in Germany.
On the other hand, parcel tracking, a guarantee of quality control, is not accessible to the smallest players on all the solutions within their reach (because they are not aware of the service or because the price remains too high), even in neighboring countries, such as Italy… and this despite the recent implementation of the e-commerce Interconnect Program.
Access to a parcel collection service remains a problem for small irregular e-merchants, located in small towns: only La Poste offers this service under a contract with a fixed access cost. , this is why the smallest e-merchants, with less regular activity, therefore continue to deliver to the post office themselves.
Small e-merchants are still severely limited in the range of delivery offers they are able to offer their customers , and in particular out-of-home delivery, an essential solution for selling in Northern Europe or in Germany where delivery at the office, in relay point, at the neighbor’s or in lockers is anchored in delivery habits. Offering only one delivery solution is in itself a brake on development.
Another “must have” in some countries: cash on delivery (especially in Italy, Spain, Portugal, or Poland).
3- A complex and little-known offer for small e-merchants
Some offers remain complex and difficult to read for e-merchants. Thus within the La Poste group, more than 10 offers coexist, with service content, specific customer targets, different price lists: the small e-merchant with sometimes limited logistical skills needs guidance to find the right solution. offer adapted to its needs and capacities.
The offers of wholesalers / comparators [4] and integrators [5] are very poorly known.
Finally, allowing simultaneous access to several offers often requires IT developments, in particular to manage several labeling solutions, which remains a major obstacle for many small e-merchants.
4- Sometimes risky deliveries
When the chosen delivery option does not include delivery against signature, and in particular in countries to which monitoring is incomplete , the e-merchant must decide on a declarative basis whether or not to reimburse the customer in the event of loss. The commercial and reputational interest can lead it to practice reimbursement, insofar as the leading sites (Fnac in France or even Amazon worldwide) practice a fairly open reimbursement policy. Some countries seem to have significant litigation rates, such as Italy, leading e-merchants to suspend their activity in these countries.
5- Local regulations and taxes: a major obstacle to the export of certain goods, including in Europe
The export documentation is unsuitable for B2C exports of small quantities. The payment of local duties or taxes such as excise duties or ecotaxes (Scandinavia, etc.) represent complexity and a deterrent overhead for e-merchants. The export of wine is thus very strongly reduced within the EU itself, although it is one of the flagship products of French exports. Within the EU, the heterogeneity of VAT levels is also a constraint, at least in theory, because in practice many small e-merchants apply their national rate uniformly.
Outside the European Union, customs formalities can be a major obstacle, as in Russia, and are even dissuasive in certain markets which are apparently open, such as Switzerland and the United States. National regulations, particularly health regulations, of countries such as the United States and Canada are also perceived as very restrictive.
But ultimately, these price and operational brakes primarily reveal a lack of knowledge of small e-merchants in the export sector, often characterized by:
- strong support from La Poste, by far the main export logistics provider. Beyond the very broad level of coverage of needs by La Poste, most small e-merchants are not familiar with the world of expressists and do not have enough logistical skills to easily open up to comparators and wholesalers;
- a resort still limited to new players logistics , such as comparators / wholesalers and market places, making it all the more relevant the integrated offerings of marketplaces such Fulfillment by Amazon (FBA);
- a lack of knowledge of the countries of destination: both on regulatory aspects and local and delivery practices, which leads small e-merchants not to anticipate the logistics needs specific to each destination;
- and when the difficulties accumulate… a decrease or even an abandonment of the export activity, either in terms of the range of products available, or in terms of target countries: certain sectors are therefore particularly affected, although they represent either a very significant potential for export activity (wine), ie a valuable niche (for example antiques / second-hand shops in decoration).
Alongside these mainly logistical operational brakes, small French e-merchants lack the means and skills, especially marketing, to develop export e-commerce, especially since the language barrier remains a competitive advantage for businesses. Anglo-Saxon sites.
For 2018 therefore, we can certainly start by wishing French e-merchants a development of their activity, and new markets including export … but we can also hope for the appearance of “turnkey” delivery offers, in particular for the smallest players, built on a strong consolidation of flows and why not the promotion of out-of-home delivery offers.
And since you insist, we especially want the cost of delivery to gradually integrate the negative externalities that it generates, and that the consumer wonders about his vital need for instantaneity …
Laura Papet
SOURCES:
PMP / LOGICITES – The cross-border parcel market – From France for e-commerce needs (June 1, 2017)
Press articles
- Challenges
- MITROFANOFF K. BOULEAU C., 23/06/2016, n ° 43, “Amazon expands its empire”
- E-commerce mag
- SALGUES F., 03.10 / 2016, “Marketplace, the source of growth for e-merchants”
- MEOT V., 06/22/2016, “International logistics: Regulatory points to check”
- E-commercefacts.com
- 09/06/2016, “Returns prove a barrier to purchase for European online consumers”
- Journal du Net
- FAUCONNIER F., 09/13/2016, “Small e-merchants take up arms”
- FAUCONNIER F., 05/02/2016, “How the giant Amazon crushes French e-commerce”
- FAUCONNIER F., 08/03/2016, “Chinese sellers are pouring out… in the boxes of Amazon”
- JOURNO F., 09/18/2016, “It is urgent to adopt omni-logistics”
- Expansion
- GUILLEMINOT A., 09/23/2016, “Why international is the new frontier of e-commerce”
- The echoes
- LE E., 09/13/2016, “The online shopping giant Amazon already offers credit to sellers active in its marketplace”
- LSA
- CHENEVOY C., 09/22/2016, “Chronopost is expanding its Predict offering and adding the possibility of geolocating its parcel and experimenting with delivery by appointment as well as drop-off in a safe place. Services that meet customer expectations, enabling e-merchants to improve customer satisfaction and the logistics provider to reduce costs ”
- Mydigitalweek
- 04/15/2016, “E-COMMERCE Transfontalier – Increase in transactions”
- Supply Chain Magazine
- SLG, 09/30/2016, “DHL boosted by the explosion of e-commerce”
- Voxlog
- COUSIN C., 06/23/2016, “UPS invests in its land network”
Institutional reports and publications
- FEVAD – 2017 figures
- PayPal – 2015, “PayPal Cross-Border Consumer Research 2015”
- Oxatis – 2016, “The profile of the e-merchant – special VSE / SME”
[1] With a few customs and fiscal constraints…
[2] The term “Expressist” designates groups specializing in express parcel transport, which have sometimes branched out into other services.
[3] The term “Monocolist” refers to groups traditionally specialized in the transport of unit packages of less than 30 kg, often B to B and which have diversified into B to C
[4] Wholesalers / comparators These delivery brokers negotiate with different transport companies significant discount rates, justified by purchase volumes. The comparator-wholesaler does not intervene physically in the logistics chain of collection and delivery of the package, which remains under the responsibility of the chosen carrier. However, it intervenes commercially and provides many services to the e-merchant:
[5] Integrators: The second model is that of integrators who bring a physical grouping of flows and mass shipping. Unlike the previous model, this model intervenes physically throughout the logistics chain and parcel transport.
