Three major new changes in EU e-commerce, sellers come and get them now!

It is reported that at the end of last year, a series of new European directives came into effect one after another . These directives provide more conditions for local online stores and try to put foreign online stores on a fair competition environment.

European online stores must complete SCA certification

From December 31, 2020, European online shops must maintain Strong Customer Authentication ( SCA) as part of the PSD2 directive .

Greet Dekocker, director of Belgian e-commerce association Safeshops, said: “SCA is an authentication that the government wants to be performed before an online shop approves a payment . One of these could be identifying the customer’s device , another asking for information that only the customer would know, such as a password , or a biometric scan, such as a fingerprint.

Therefore, the online store must now handle any two of the three items before it can finally complete the transaction .

Since Belgium is a European pioneer in the field of SCA , little will change in Belgian e-commerce , but the same cannot be said for online shops in other countries . “ In other countries, it’s causing a lot of commotion, ” Dekocker said.

A study shows that the new regulations have little impact on payments in Belgium, but there are problems in countries such as Germany and Spain. Tens of billions of transactions will be at risk because some banks or payment providers cannot track them .

Focus on "taking care" of local e-commerce sellers for foreign e - commerce sellers

Another measure taken by the EU is aimed at external e-commerce , especially Chinese e-commerce.

For example, the value-added tax was adjusted at the end of 2020 and Chinese sellers will be greatly affected, said Roel Gevaers, professor of e-commerce and supply chain at Antwerp University .

In the past, there was a VAT exemption rule that parcels from outside the EU below 22 euros were exempt from VAT. In addition, the Universal Postal Union under the United Nations also took a measure that they considered China a developing country, which meant that Chinese sellers basically enjoyed free parcel shipping services.

However, these preferential rules have been stopped, and Chinese sellers are trying to adapt to the new rules. The EU has also introduced many support policies for local e-commerce in the new year, focusing on "taking care" of local e-commerce.

So, will local European e-commerce benefit from these measures and changes ? Gevaers said the new measures may bring limited benefits to local e-commerce, but they are not a savior.

Shipping costs increase, selling low-priced products may lose their advantage

Previously, many sellers imported some very cheap products from China into the EU and sold them to European consumers. These very cheap Chinese-made products were sought after by local people, and the sellers made a lot of money while enjoying relatively low transportation costs and material costs.

Now , however, those conditions are disappearing, and importing low-priced products from China has become more expensive. New EU customs rules have caused consignment prices to soar.

This means that sellers who sell low-priced products on platforms such as Wish or AliExpress will no longer be able to enjoy very cheap package shipping prices, and costs will rise sharply. Therefore, the import of low-priced products from China may be greatly reduced due to price increases, and the relevant sellers may no longer have an advantage.

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