The continent is simultaneously seen as a large market and as a stop to business growth. We want to get on with keeping shop without interference from politicians. Yet, just as the UK is considering voting to leave this enticing market, the bureaucrats come up with a potentially useful initiative; the Digital Single Market (DSM). This initiative aims to create a frictionless market within the EU and give consumers more confidence with a range of copyright, security and privacy rules.
The EU estimated that this could contribute €415bn per year to the economy and create hundreds of thousands of new jobs. If the UK exits the EU, its ecommerce businesses will be idly waiting for trade deals to be renegotiated while EU counterparts make hay in an easier market.
Around half of Spreadshirt’s global business happens inside the EU. In 2015 we shipped 3.6 items (printed t-shirts, hoodies and other wearables) to 180 countries, so we already see the benefits of being inside the EU where it’s easier to ship goods and move money. The EU Commission wants to improve this for online retailers and businesses, so it will “update EU rules, clarify contractual rights, and develop enforcement”.
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For example, to help create a frictionless market, the EU aims to make shipping more efficient, simplify VAT and provide a more up-to-date framework that is fairer across Europe. Online retailers know that building a successful business is not just about having a great product. That counts for nothing if you can’t ship it. Reliable delivery is key to growth. Scaling fast is about getting your product to the consumer. This is not always a core part of the business. We do print-on-demand merchandising, so our core competencies are around printing techniques. In order to scale we had to also become experts in shipping and taxes. We have had to work out how much tax should be paid (and where) on something designed in France, printed in Germany and paid for in Spain. If the EU can reduce this burden, ecommerce companies will find it easier to grow. There will be less friction in the scaling process for companies inside the market.
So the Digital Single Market will make it easier for shopkeepers to do business. But what about the customers? The EU is proposing a range of initiatives which will give consumers more confidence in EU ecommerce companies, encouraging them to trust them with their data. The DSM will analyse the role of online platforms, “looking in particular at issues of transparency, use of information (the right to be forgotten), relationships between platforms and suppliers, and how to tackle illegal content on the internet”. It will be the basis for a review of the e-Piracy Directive and propose a partnership with industry on cybersecurity.
In addition to this, it will aim to decipher the complex world of copyright for EU creators. We often deal with copyright issues at Spreadshirt, regularly having to police brands’ guidelines in our European factories in Germany, Poland and the Czech Republic. As the EU acknowledges, copyright is a great driver for creativity across Europe. It plans to bring in regulation which means you can take your own content abroad. It will also seek to introduce a clear, EU-wide, legal framework to encourage innovation and research.
The UK is a huge ecommerce nation within the EU. British people have embraced online shopping, are highly internet aware and have incubated some great technology companies. From our company HQ in Leipzig, Isee the European perspective on the UK’s potential departure. Mostly, the European tech world would like to see the UK remain, to keep this internet nation in the EU and encourage UK companies to work on and implement the Digital Single Market.
Of course, if the UK votes to Brexit, it will find itself on the outside of a frictionless market that gives its consumers confidence. The framework will be implemented to suit those inside the market. Why would shoppers buy from the UK when it’s so much more complicated, and when they have the security and confidence and ease of buying within the EU?
The Digital Single Market is a good reason to remain in the EU. Otherwise the nation of shopkeepers my find their virtual doors are open, but no-one’s coming by to shop.
Philip Rooke is CEO of Spreadshirt.Meanwhile, serial entrepreneur Richard Branson has decided to register a campaign with the Electoral Commission, encouraging the British public to vote to stay in the European Union on 23 June.
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