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12.04.2019

No. 439: The German delivery market as an infrastructure for European e-commerce

No. 439: The German delivery market as an infrastructure for European e-commerce

Authors: Christian M. Bender, Sonja Thiele

(full version only available in German)

Summary

There is a continuous growth of the online retail sector in Germany as well as in other European countries. Growth rates are particularly high for cross-border e-commerce. In order to support this development, and to foster cross-border e-commerce, the European Commission published a Green Paper on an integrated parcel delivery market in the EU in 2012. This Green Paper has initiated the development of the Regulation on cross-border parcel delivery services (the ‘Parcels Regulation’), which took effect in 2018.

Against this background, WIK has analysed the current situation and recent developments in cross-border e-commerce in Germany. Germany is, together with France and after the United Kingdom, one of the most important e-commerce markets in Europe. German e-retailers are particularly active in cross-border e-commerce. At the same time, German consumers are purchasing from foreign (European) e-retailers more frequently and foreign e-retailers are extending their offers for German consumers.

The German postal market provides a capable and efficient infrastructure for cross-border e-commerce: Many parcel operators provide nationwide delivery services at a high level of quality and several large operators operate nationwide delivery networks in Germany and other European countries. The services of parcel operators in the German parcel market enable German e-retailers to sell abroad, and enable foreign e-retailers to sell to German consumers. A relatively high level of competition in the German delivery market results in relatively low price levels for outbound cross-border parcels.

One of the key drivers for the Parcels Regulation were concerns about unreasonably high prices for cross-border delivery services (compared to prices for domestic service). This study shows that delivery costs are not a major obstacle for German consumers that buy online from other countries. Indeed, many foreign e-retailers offer free delivery to Germany. Public list prices for single piece items, however, are generally higher than the delivery cost charged by e-retailers to their customers.

For German e-retailers, logistics issues are not a major barrier for expansion to foreign markets. By contrast, major obstacles for selling to consumers in other European countries are legal uncertainty, for example on taxes, and language barriers.

Enhanced price transparency that the Parcels Regulation calls for is generally positive. Given our assessment of German parcels market’s performance, however, we do not expect that the Regulation will lead to substantial change in Germany, and is unlikely to affect further price decreases for cross-border parcels from Germany to other European countries.

Discussion Paper (in German language) is available as pdf-file and can be ordered for a fee of 7 Euro incl. VAT.

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