Going global: Consumer trust in cross-border e-commerce

Event report

[Read more session reports from the UNCTAD E-Commerce Week 2018]

E-commerce experts from the private and public sectors gathered to discuss strategies to encourage cross-border e-commerce as part of the 2018 United Nations Conference on Trade and Development (UNCTAD) E-commerce week. The session moderator, Ms Amanda Long (Director-General, Consumers International) began by noting that 50% of online purchases are currently cross-border. She also noted that cross-border commerce drives economic development for disadvantaged merchants worldwide. Long specified that she wanted each panellist to address the challenges facing cross-border commerce in its current iteration before launching into proposals about how to alleviate those issues.

She first introduced Mr Mohammed Es Fih (eSolutions Advisor, International Trade Centre (ITC)) who noted that a significant obstacle to cross-border commerce lies with seller protection. According to Es Fih, too little infrastructure aimed at compensating sellers exists in current e-commerce frameworks, a view also shared by Mr Xi Long (Project Officer, China Consumers’ Association). Long stressed that low product quality presented the biggest hurdle to international e-commerce. Mr Paul Nagle (Director, International Regulatory Affairs, Alibaba) acknowledged the need for superior product quality and fraud prevention in cross-border e-commerce, issues whose solutions lay in artificial intelligence (AI) and blockchain technology.

Ms Léa Auffret (Trade Team Leader, Bureau Européen des Unions de Consommateurs) discussed economic as well as product quality barriers to international e-commerce. She noted that long delivery wait times, unforeseen import tariffs, and ‘accidental entry to the global marketplace’ account for the majority of dissatisfaction reasons with cross-border e-commerce. Oftentimes, she reported, consumers accidentally order from a foreign version of a domestic website, complicating shipping and order fulfillment. Most of all, Auffret stressed the need for consumer recourse against an international merchant should an order go awry. Currently, she claimed, there exists no third-party dispute regulation body to aid foreign consumers, contributing to low consumer confidence when it comes to ordering from abroad.

Finally, Ms Sara Lone (Research Coordinator, Ecommerce Foundation) stressed the need to foster consumer confidence in order to encourage cross-border e-commerce. She cited consumer reviews as essential to building such confidence, along with the creation of a ‘safe shop’ trust mark with international recognition. In some countries, such as the USA, consumers perceive reviews as untrustworthy, but her research has concluded that a third-party regulatory body can provide the requisite levels of trust.

To conclude, Long asked each panellist to provide the audience with a final takeaway regarding how to encourage sustainable growth in cross-border e-commerce. Es Fih spoke about a need to eliminate the value-added tax (VAT) on imported goods, whereas Nagle stressed a more inclusive trade system that connected foreign buyers and sellers on a personal level. Auffret emphasised that information provision to consumers ahead of a purchase is crucial, a point echoed by Long. Lone reiterated her previous assertion that a global security assurance signal will stimulate the levels of consumer confidence necessary to proliferate international e-commerce.

By Frank Kosarek