Three weeks ago I wrote about the fact that retailers in Malta are missing out on a big opportunity – eCommerce. Maltese consumers who want to shop online find that there is a very limited selection of local eStores they can shop from and the result is that they end up ordering their books, DVDs, games, toys and miscellaneous purchases from overseas.
This is clearly a missed opportunity for local businesses, as was highlighted by the statistics issued this week by Eurostat.
Companies in several countries in the European Union have embraced the Internet as an extremely valuable sales tool. The study in question looked at the total percentage of turnover generated by eCommerce in businesses employing over 10 people and operating in a wide range of sectors, including amongst others manufacturing, construction, wholesale and retail, holiday accommodation, restaurants and real estate.
The results of the study show that Malta still has a long way to go in the eCommerce arena. Firms in countries such as Ireland have invested heavily in these technologies and are reaping the rewards, with an impressive 26% of turnover originating from electronic transactions. Enterprises in Finland and Sweden have also seen the benefits of transacting online, with 18% of company turnover coming from online sales. Similarly companies in the Czech Republic, Germany and the United Kingdom are doing well online (all 15%), as are those in Hungary (14%) and France (13%).
In the case of Malta only 11% of company turnover comes from sales via websites, a clear indicator, if any was needed, that there is still a lot we need to do to reap the full benefits of eCommerce. Of these online sales, only 7% originate from local consumers. The message is clear – local retailers and businesses are not offering potential Maltese customers a viable alternative. Let’s face it, 7% of the 11% means that local companies are only getting 0.77% of their turnover from sales made online to local customers. Surely we can do better than that!
However what is really worrying in this scenario is not the local dimension, but the international one. One of the most important sectors in Malta is tourism, which happens to be an industry which has been revolutionised by the Internet. In fact a study recently published by the European Travel Commission predicts that in 2010 over one-third of travel bookings made by Europeans will be organised and paid for online – growing from 28% in 2009. In fact as European consumers become more price conscious they will spend more time shopping online for better travel deals.
In countries such as the UK, which is traditionally a target market for Malta, over 40% of holidaymakers book their vacations online. France and Germany are also catching up. However if we refer to the Eurostat findings, only 37% of the 11% of online turnover comes from EU consumers i.e. a paltry 4.07% of total corporate turnover. This is clearly an important opportunity for local tourism operators – one that they simply cannot afford to miss out on.
In the last couple of years the Government has launched a wide variety of schemes to encourage local businesses to invest in eCommerce. An example is the ERDF e-Business Development Grant Scheme operated by Malta Enterprise. Several organisations have already received funding under this scheme and a call is now open for organisations who want to invest in eBusiness technologies. The Malta Tourism Authority also offers various schemes to help local tourism operators invest in their online presence.
The likelihood is that as time goes by and the financed projects are launched we will see a quantum leap in the quantity and quality of local eCommerce offerings. This will be a win-win scenario for companies and consumers alike.
by Claudine Cassar