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Future of Retail & E-commerce Q3 2023

Growth of online shopping and sales show no signs of slowing

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William Bain

Head of Trade Policy, the British Chambers of Commerce

The growth of online shopping and sales show no signs of abating, but more consideration must be given to the regulation of e-commerce to ease trade barriers and protect consumers.

Global sales via e-commerce make up a growing share of international trade in goods. Levels of e-commerce penetration across the world are forecast to rise until 2026 – with the strongest growth in North America, Asia and the ASEAN states.  

In no global region is e-commerce nearing saturation point, with its rise during the pandemic showing little sign of slowing down.  

Sales of fashion and consumer electronic goods are particularly strong via e-commerce — with those via smartphone and among younger age groups showing the highest growth. However, still well over 70% of online baskets are abandoned before the sale is completed.  

Balancing growth with regulation 

How can policymakers balance the desirability of expanding e-commerce trade with concerns about security, sustainability, carbon leakage, subsidies and supply chain attestations? A variety of legislative measures are being adopted in these areas by countries across the world, which will have knock-on consequences for e-commerce trade.  

The EU’s Carbon Border Adjustment Mechanism (CBAM) reporting requirements come into effect for companies outside the EU in October. This means proof of the origins of iron or steel embedded in products will have to be made by the importer. Packaging legislation also requires exporters to be compliant about the sustainability of packaging products they use to ship goods, particularly those involving plastics.   

Well over 70% of online baskets are
abandoned before the sale is completed.

International cooperation for e-commerce 

At the World Trade Organisation (WTO) level, 76 countries agreed to undertake negotiations on trade-related aspects of e-commerce in 2019. These negotiations have expanded into eight groups working on issues such as online consumer protection, electronic signatures and authentication, unsolicited commercial electronic messages and paperless trading.  

The number of participants in the WTO negotiations has now risen to 89. As of July 2023, the co-convenors committed to wrapping up negotiations by the end of the year, with agreement hoped for on ‘Single Windows,’ personal information and data protection provisions by the end of summer.   

Alongside these multilateral steps, some countries have liberalised digital trade through bespoke agreements either of a freestanding nature or within new trade agreements, such as the UK-Singapore or UK-Ukraine Digital Economy Agreements. These steps may unlock the door to continued expansion in cross-border e-commerce trade and determine regulatory principles, which protect consumers and ease e-commerce across the globe. 

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