EMOTA represents 3,500 multi-channel/online retailers in 15 countries

• 15 European countries

• 16 member associations

• 3,500 companies

• € 290 billion turnover

• 83% of European e-commerce

-1-

167

209

253

301

185

215

249 284

318

84

122

193

259

338

15 20 33

45 56

-

50

100

150

200

250

300

350

2009 2010 2011 2012 2013

€ Billion Europe

N. America

Asia Pacific

ROW

+17%

+12%

+26%

E-commerce turnover by region

-2-

In 2013, European E-Commerce has reached a turnover of €350 billion Growth

+30%

Source: EMOTA, 2014 Note: B2C E-commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services

352

UK, France and Germany account for 60% of European E-Commerce

European E-commerce turnover by country 2013 (€ billion)

Source: EMOTA, 2014 Note: B2C E-commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services

-3-

UK

France

Germany

Scandinavia

Austria/ Switzerland

Benelux

Spain

Italy

Russia

Eastern Europe Other

107

51

50

33

20

16

14

13

12

18 18

average European

growth

E-Commerce is growing very fast throughout Europe

+0%

+5%

+10%

+15%

+20%

+25%

+30%

+35%

+16%

+14%

+33%

+14%

+16%

+11% +13%

+15%

+28%

+22%

E-commerce growth by country in 2013

Source: EMOTA, 2013

-4-

+17%

Cross-border online sales will grow twice as fast as domestic sales

0

100

200

300

400

500

600

2013 2014 2015 2016 2017 2018

306 346 377 407 436 462

44

56 69

83 99

116

€ Billion

Source: EMOTA, 2013

European E-Commerce market forecast

350

402

446

491 535

Domestic

Cross-border

-5-

578

+21%

CAGR ’13-18

+9%

Source: Eurostat, 2013 Note: % of population who ordered goods or services over the Internet from national sellers / from sellers from other EU countries in the last 12 months

However, only 11% of consumers currently shop online across borders

-6-

Domestic vs. cross-border internet purchases

-

5

10

15

20

25

30

35

- 10 20 30 40 50 60 70

Cross-border

Domestic

EU avg. 2012

Digital Agenda target 2015

GA

P

In fact, consumers are more worried about international delivery

0% 5% 10% 15% 20% 25% 30% 35%

Uncertainty on rights

Data privacy

Payment security

No delivery

Guarantee

Returns

Long delivery times

Concerns about cross-border vs. domestic online purchases

Source: Civic Consulting/TNS, 2011 Note: % of consumers reporting concerns about buying products online in their own country vs. in another EU country (sample: 29.010 individuals)

-7-

% domestic % increase cross-border

In addition, only 25% of retailers sell across borders

0%

10%

20%

30%

40%

50%

Proportion of retailers selling in at least one other EU country

EU average

Source: TNS, Flash Eurobarometer 359, 2013

-8-

25%

In fact, many retailers are deterred by legal/tax and payment issues

Barriers to cross-border sales for retailers

0% 10% 20% 30% 40% 50%

Language differences

Customer service

Own restrictions

Complaints resolution

Delivery costs

Different tax regulations

Geographic distance

Risk of fraud/non-payments

Different consumer laws

Source: TNS, Flash Eurobarometer 359, 2013 Note: % of retailers reporting obstacles to cross-border sales to other EU countries

-9-

The cross-border parcel distribution market is highly concentrated

0

10

20

30

40

50

60

2009 2011 2014

€ Billion

Source: ATKearney 2012, European Commission 2013

European parcel market

43.6 47.2

53.4

Domestic

Cross-border

-10-

+6%

+4%

CAGR

Cross-border market shares

Other

29% 30%

31%

71% 70%

69%

Cross-border distribution prices are twice as high as domestic ones

-

5

10

15

20

25

30

Domestic and cross-border parcel distribution prices

-11-

Source: FTI, 2011 Note: Domestic and weighted average cross-border prices for 1 kg. parcels

€

Domestic

Cross-border

Beside low prices, consumers want easy returns and track & trace

Relative importance of delivery offerings

0% 10% 20% 30% 40% 50% 60% 70% 80%

Dynamic rerouting

Alternate delivery

Same-day delivery

Express delivery

Delivery notifications

Delivery windows

Security of delivery

Track & trace

Ease of returns

Price of delivery

Source: BCG, 2013 Note: survey of 1,500 consumers in late 2012 - % of respondents – top 3 answers

-12-

Basics

Value-added services

Premium services

Operators need to provide advanced services to suit consumer needs Easy returns

Click & collect

Track & trace

Parcel lockers

-13-

Fast delivery solutions

Fixed time windows

The European payments market is also highly concentrated

0

5

10

15

20

25

30

35

40

45

50

2005 2010 2015

€ Billion

Source: ATKearney 2013, Nilson Report 2013

European payments market

33

37

50

Bank transfers

Credit/debit cards

-14-

Europe cards market shares

Other

34%

40%

45%

55% 53%

47%

10%

6%

5%

Cheques Internet/mobile

3%

140%

100% 97%

129%

95% 85%

27%

71%

46%

59%

39%

20%

40%

60%

80%

100%

120%

140%

2006 2008 2010

index Cross-border electronic paper

Evolution of payment processing unit costs

-15-

Cross-border payment transaction costs are surging significantly

Source: ATKearney, 2013 Note: index: 2006 =100%

SEPA electronic

SEPA paper

Domestic paper

Domestic electronic

Payment transaction costs vary widely by country

-16-

Comparison of payment transaction costs by country

-

0,2

0,4

0,6

0,8

1,0

1,2

1,4

100 200 300 400 500 600 700

Cost per transaction (€)

Payment costs per capita (€)

EU average

Source: McKinsey, 2013

Payment methods need to be tailored to specific national preferences

Source: Civic Consulting/TNS, 2011

Online payment methods by country

-17-

0%

20%

40%

60%

80%

100%Other

Invoice

COD

Online payment

Bank transfer

Debit card

Credit card

Upcoming EU legislation will harmonize consumer laws across Europe

E-Commerce Action Plan

Payments Services Directive Common European Sales Law (CESL)

Directive on ADR/ Regulation on ODR

Regulation on Data Protection

-18-

Online Trustmarks

Consumer Rights Directive

Roadmap on Parcel delivery

Distance sales rules will be standardized in all EU countries by June

-19-

Consumer Rights Directive

Information requirements:

• Order button with “obligation to pay”

• Delivery/payment restrictions indicated before order

Price transparency:

• No pre-ticked boxes for extra services

• No payment / telephone surcharges

Standard withdrawal right:

• Withdrawal period: 14 days

• Reimbursement within further 14 days

We are working to limit data protection burdens for businesses

-20-

Data Protection Regulation

Benefits:

• Rules valid throughout Europe

• Elimination of notifications

• Single supervisory authority for companies

Issues:

• Explicit consent

• Third-party access to data

• Information requirements/ data protection officers

• Constraints to profiling

• Right to be forgotten/ to data portability

Industry players will need to improve information on delivery services

EC Roadmap on cross-border parcel delivery

Enhance complaint handling and redress mechanisms:

• Cooperation between industry players

• Promotion of alternative dispute resolution

Improve availability, quality and affordability:

• Inter-operability and open interfaces

• Cross-border track&trace, labelling and returns

Increase transparency and information:

• Delivery and return options

• Price comparison

• Service level performance

-21-

Payment security will be enhanced and transaction costs will go down

EC proposals on payments services

• Cap on interchange fees for card payments

• No surcharges on credit/debit cards

• Strong authentication for online payments

• Consumer protection against frauds

• Innovation of mobile/internet payments

-22-

Revised Payment Services Directive Regulation on Interchange fees

Tax rates need to be standardized to create a level playing field

• Harmonize VAT rate structure across EU:

– Same VAT rates for similar goods/services

– Same VAT rates for similar online / offline goods

– Same VAT exemptions

• Accelerate implementation of one-stop-shop for VAT

• Avoid tax arbitrage by non-EU multinational companies

– Harmonize corporate income taxes

– Eliminate internal EU tax havens

– Apply taxes on revenues generated in each country

-23-

EMOTA has developed a European trustmark for cross-border shopping

-24-

European harmonization of national trustmarks

• Harmonize codes of conduct

• Accredit national trustmarks

• Promote European trustmark

EMOTA commits to drive international e-commerce growth in Europe

-25-

EMOTA Borderless Digital Commerce Commitment

Consumers

Providers

Merchants

Governments

• Govern and guide international e-commerce development

• Inform e-commerce industry with standard reporting

• Proactively listen and respond to needs of key stakeholders