European Parliament revises packaging directive

At the end of November 2023 the European Parliament voted in favor of a revision of the Packaging and Packaging Waste Directive. According to the revision, all packaging needs to be reusable or recyclable by 2030. The revision has been criticized by several parties, since the EU has not set uniform logistics standards across Europe so far.

So far, online sellers have been experimenting with recyclable and reusable packaging on their own volition. Amazon, for example, has started exclusively using recyclable packaging for deliveries in Europe.

According to the new revision, the European Parliament will provide reusable quotas for packages. By 2030, ten percent of all shipments should be sent in a closed system. This means that packaging needs to be reused, indicating that consumers will need to return the packaging even when they keep all products that were included in the order.

As long as there are no uniform reusable solutions across the European Union, the return of reusable packaging is seen as problematic, particularly in cross-border ecommerce, according to the German association of ecommerce, Bundesverband E-commerce und Versandhandel (Bevh).

If it is not guaranteed that reusable packaging is accepted across service providers within the EU, they do not consider it acceptable to permanently send empty packaging shipping across Europe in cross-border trade. Returns are caused even if the customer keeps the item.

A solution to this problem could be the inclusion of logistics providers or postal companies. In that case, consumers could return the reusable packaging materials to the delivery person at the door. However, the Bevh states that there currently are no standardized logistics processes in place to make this returns process as easy as possible.

It still remains to be seen how and when the revision will be implemented. The European Parliament has now voted in favor, but still needs to negotiate with the European Council. So far, the European Council has not yet adopted the Parliament’s position on this revision.

Temu expands European delivery network

Temu, the rapidly growing ecommerce player from China, has expanded its European delivery network through partnerships in Germany, Italy, Spain, and Portugal and more logistic collaborations seem to be on the horizon.

Temu was launched in Europe about seven months ago, after its U.S. launch in September last year. Its business model involves dropshipping: shipping products directly from manufacturers, reducing costs and inefficiencies associated with traditional retail supply chains. Temu is backed by the Chinese tech giant and Pinduoduo owner PDD Holdings, which opened an office in Dublin this spring.

After its introduction, Temu quickly became one of the most frequently downloaded apps in various countries, captivating mobile users longer than other shopping apps with its substantial discounts, refer-a-friend promotions, and gamification elements. Ecommerce giants like Amazon and eBay saw their daily mobile shoppers decline with the entry of the Chinese newcomer.

Meanwhile, Temu has been working to improve its logistic proposition for shoppers in Europe. It has partnered with Mail Alliance in Germany, Poste Italiane in Italy, and CTT in the Iberian Peninsula.

German Mail Alliance will contribute its network of 55,000 delivery personnel to the collaboration, according to Temu. The company is Germany’s largest network of private postal service providers, known for its capacity to handle large volumes and swift delivery times.

Italian Poste Italiane will collaborate with Temu on initiatives such as PIN code-enabled lockers and local stores serving as pick-up and drop-off points. The partnership also includes environmental strategies, such as reducing carbon emissions and employing eco-friendly packaging.

CTT, the national postal service of Portugal operating in Spain through CTT Express, is expected to play a key role in supporting Temu’s growth in the Iberian market.

In 2024, the company plans to enhance its logistics partnerships to further streamline ecommerce delivery and returns processes.

EU requests clarification from AliExpress

The European Commission has asked the Alibaba subsidiary, AliExpress, for a clarification. The organization wants to know about the measures what the platform is taking to combat the trade in illegal products, including counterfeit medicines. AliExpress has been given three weeks to provide an explanation.

The European Commission has formally requested information from AliExpress under the Digital Services Act (DSA), as announced by the daily administration of the European Union. Alibaba’s platform must disclose “the measures it has taken to comply with obligations related to risk assessments and mitigation measures”. These measures should protect consumers online, “in particular with regard to the distribution of illegal products online such as fake medicines.”

The recently adopted DSA requires major tech companies to take more action against illegal and harmful content on their platforms. Recently, X (formerly Twitter), Meta, and TikTok received questions from Brussels about combating disinformation.

The Digital Services Act is not just about hate speech, disinformation, and cyberbullying, according to EU’s Internal Market Commissioner Thierry Breton. It is also meant to ensure the removal of illegal or unsafe products sold in the EU via ecommerce platforms, including the growing number of fake and potentially life-threatening medicines and pharmaceuticals sold online.

Amazon discontinues Small and Light program

Amazon is discontinuing its specialized fulfillment program for small, lightweight, and low-priced goods in Europe, after the discontinuation in the US. Starting from September 26, these items will automatically be subject to new low-price FBA rates.

Amazon introduced the Small and Light program in 2015. It allowed merchants to sell smaller, lighter, and more affordable products with reduced Fulfillment by Amazon (FBA) fees. This helped merchants selling lower-priced items to save money. Amazon provided slower shipping speeds for these products compared to regular FBA items.

The discontinuation was announced earlier this summer in the USA and will take effect there on August 29th. The new low-price FBA rates will be, on average, 0.77 dollars lower per item compared to the current FBA rates, but around 0.30 dollars higher than the Small and Light rates. The advantage is that these items will now be delivered with the regular, faster FBA fulfillment speed. Merchants do not need to enroll to access the lower rates as it was in the Small and Light program.

Starting from September 26th, the Small and Light program will be discontinued in Europe, and the low-price FBA rates will automatically apply for sellers on Amazon in Europe.

The company works with country-specific price thresholds in Europe for this purpose. In Germany, the threshold for the lower fees is set at 11 euros, in France, Italy, the Netherlands, and Spain, it is 12 euros. In the UK, it is 12 British pounds, in Sweden, it is 140 Swedish kronor, and in Poland, 55 zloty.

The actual FBA fees for products falling under the price threshold also depend on their weight and dimensions. For users of PAN-European FBA, these fees range from €1.45 to €2.87, as calculated by Onlinehändler News. Merchants storing their goods in a single European Amazon location usually incur higher costs. Earlier this year, Amazon raised fulfillment costs in Europe.

Mirakl secured 100 million euros

French marketplace solution provider Mirakl has secured 100 million euros in debt financing. The funding will be used to enhance its technology and to finance acquisitions. The company was already valued at over 2,92 billion euros in 2021, after a Series E funding round of 468 million euros.

Customers can create and manage marketplaces with its SaaS solution. It was founded in 2012, and since then has raised close to 1 billion euros in funding.

The company’s previous funding round took place in 2021, where it raised 555 million dollars (468 million euros). Last year, the company announced a recurring revenue of 87.44 million euros (100 million dollars) in 2021. At that time, Mirakl was valued at 3.1 billion euros.

Adrien Nussenbaum, co-founder and co-CEO of Mirakl says that this latest debt financing is an additional milestone demonstrating Mirakl’s financial strength and greater financial maturity. Through the RCF the company will be able to carry out M&A transactions that will further strengthen Mirakl’s technological progress and the success of our customers’ marketplaces. The signing of this RCF reflects the confidence of the company’s banking partners in supporting its long-term growth strategy.

DHL acquires MNG Kargo, Turkish parcel delivery provider

DHL Group has signed an agreement to acquire 100 percent of MNG Kargo, one of the leading parcel service providers in Turkey.

According to DHL’s CEO Tobias Meyer, this acquisition secures a leading position in the domestic parcel market. MNG Kargo complements the company’s business portfolio and will help to strengthen their position in this sector.

Customers will benefit from transport and logistics services within Turkey, but also from cross-border solutions thanks to the cooperation of the DHL divisions already represented in the country. Besides sustainability, globalisation and digitalisation, DHL made ecommerce a focus over the last few years.

Tobias Meyer says that e-commerce is one of the biggest growth drivers for logistics, parcel volumes in particular. That is why the company is continuously working “to increase our footprint in this area”.

MNG Kargo delivers parcels to 600,000 addresses daily, which makes it one of the biggest parcel service providers in Turkey.

For DHL eCommerce, the newly acquired parcel network is an optimal addition to the European parcel network. It comprises 27 sorting centres for middle-mile transport and over 800 centres for last-mile delivery. The transaction is subject to approval by the Turkish Competition Authority and the Turkish Information and Communication Technologies Authority.

Mainly driven by a young population with a high affinity for digital communication, the ecommerce market in Turkey is expected to grow at a double-digit rate in the coming years.

DHL claims  that thanks to their network and digital expertise combined with MNG Cargo’s local presence, they are now ideally positioned to benefit from the growth potential of the Turkish market.

Turkey also benefits from efforts by different producers to create more resilient supply chains. It already has a strong manufacturing base, such as in the textile industry. DHL Express opened a hub at Istanbul Airport in 2021.

DHL Global Forwarding recently announced that it will intensify its cooperation with Turkish Cargo.

Europe’s top 6 ecommerce markets generate 72% online spend

The European ecommerce markets that are most developed by penetration rate.

In 2022, the six biggest ecommerce markets in Europe generated 72 percent of the total European ecommerce spend. They are the UK, Germany, France, Italy, Spain and the Netherlands.

There are large differences between these six markets. The United Kingdom and Germany are the largest markets, both having a share of 28 percent on the total European ecommerce spend in 2022. The other four markets account for a quarter of spending.

The United Kingdom and the Netherlands have returned to their pre-pandemic growth trends, and emerging markets, like Italy and Spain, are still growing above trend.

These data come from the E-commerce in the Post-Pandemic Era report by CBRE. This research looked at the state of ecommerce in Europe before and after the coronavirus pandemic.

When looking at the markets and the impact of the pandemic, it seems that developed markets have seen small increases.

Ecommerce penetration means the percentage of total retail sales via online channels as opposed to in-store ones. As for The UK, if the growth trend from 2015 to 2019 had continued, the UK’s ecommerce penetration would now stand at 25 percent at the end of 2022. However, the actual figure is 27 percent.

According to the pre-pandemic trend, the German ecommerce market would have a penetration rate of 15 percent by the end of 2022. The actual figure came to 17 percent.

The market in the Netherlands is back to its pre-pandemic trend. It saw no additional growth as a result of the pandemic.

Meanwhile, countries with emerging ecommerce markets saw the largest relative increases. Spanish ecommerce would have a penetration rate of 9 percent, according to the pre-pandemic trend. The actual figure was 12 percent. For Italy, those figures were 8 and 10 percent respectively. Together, these markets make up 11 percent of the total European ecommerce spend.

The European Commission aims to end exemptions on import duties

The European Commission is planning to impose import duties on goods up to 150 euros, which are currently exempted.

The proposed amendment to the import rules is evident from documents reviewed by Süddeutsche Zeitung. The newspaper said:

“Anyone importing a product from outside the European Union, for example, through a purchase from an American or Chinese online seller, is required to pay import duties. However, orders up to 150 euros have been exempted from this obligation so far. In practice, many orders from international online shops enter the Union without import duties. Brussels intends to change this situation. Plans for this change are highly concrete, according to German media, and could be officially announced at any moment.”

This is not the first time Brussels is abolishing exemptions. Two years ago, the VAT exemption for products up to 22 euros was abolished. This measure particularly affected Chinese online shops. AliExpress, the business-to-consumer subsidiary of Alibaba Group, attributed declining sales to this measure.

The removal of the exemption on import duties adversely affects all online providers from outside the European Union, at least for the sale of products up to 150 euros. Online sellers within the Union benefit from the alleged policy change.

According to the European Commission, the customs reform would generate 750 million euros per year in import duties for the Union. The Commission has also made plans for a new EU Customs Authority, which should be organised and start working within five years. This authority is expected to establish and maintain a new ‘data hub’ to improve information flows between member states and simplify customs procedures.

Small businesses consider cutting procurement costs

A recent research by Amazon Business with marketing agency Walker Sands in March 20-27, 2023 showed that one of the top priorities for buyers at small and mid-sized businesses is finding ways to reduce purchasing costs and stay within budget over the next 12 months amid inflation and the threat of a recession.

500 small business decision-makers in the United States in March were polled about their online purchasing patterns, the challenges and opportunities impacting purchasing processes, and the broader landscape for small businesses. All respondents were 18 years or older. All work in purchasing at a business making $25 million or less in annual revenue. 61% of respondents worked full-time, 7% part-time, and 32% were self-employed. Respondents could list more than one concern.

61% of respondents will look for ways to reduce the costs associated with B2B purchases over the coming year.

Staying within budget is a priority for 61% of respondents.

Top challenges (small business)

  • High inflation (63%)
  • Possible recession (39%)
  • Supply chain disruptions (30%)

Key factor in growing businesses long-term

  • Ability to easily find items (88%)
  • Ability to find items within their price range (91%)

Buyers at small businesses are seeking ways to make the purchasing process more efficient, helping them find and purchase what they need faster and more easily to spur their companies’ long-term growth, according to the survey.

Todd Heimes, director and general manager of Amazon Business Worldwide points to the company’s use of artificial intelligence and machine learning technology as two ways the marketplace is helping small businesses purchase more efficiently and quickly find products within their price range.

Amazon Business is increasing the number of products with business-specific pricing and quantity discounts. It also offers subscriptions to help small and mid-sized businesses to receive discounts and grants to help small businesses grow.

Grants

This month, Amazon Business gives more than $250,000 in grants to eligible small businesses that purchase through its marketplace and have less than $1 million in annual revenue.

Amazon Business will select one grand-prize winner and a group of finalists and semifinalists to receive the grants and other benefits such as Business Prime memberships and Amazon devices. Applications are due by May 21; winners will be announced July 17.

Ecommerce in Italy estimated 76 billion euros in 2022

The total ecommerce turnover in Italy is estimated to have been worth 75.89 billion euros in 2022. This is a growth of 18.6 percent, when compared to a year earlier.

However, most of that growth was caused by price increases.

These data come from the Ecommerce in Italy 2023 report from Casaleggio Associati, a digital strategy consulting business in Italy.

In 2021, the ecommerce market in Italy reached a turnover of 64 billion euros, which was a growth of 33 percent compared to a year earlier. With a growth of 18.6 percent, it seems that the development of online sales is slowing down in the country.

2022 was the year of the “reality check for exhibitors and producers who had to return to playing according to market rules without the boost, and in some cases the obstacle, of the lockdown,” according to the president of Casaleggio Associati, Davide Casaleggio. The real news was the record level of inflation in Italian. It affected purchases due to higher prices, uncertainty due to the energy crisis, the ongoing war and the soaring costs of transport from Asia.

Leisure

Leisure was the biggest online sector, generating 50 percent of the total online turnover (38 billion euros) in Italy. According to the research, this is partly due to the growth of online gaming, as well as purchases related to hobbies and sport.

Online shopping

Online shopping centers follow in second place and generated 19 percent of the total revenue (14.2 billion euros).

Tourism

The tourism sector showed the strongest growth last year (47 percent), which was mostly due to price increases. It generated 13.3 percent of the total ecommerce turnover.

According to the research, the overall sales decreased in most sectors, but there was still an increase in turnover through higher prices. This was particularly true for physical product sectors, such as Food, Home and Furniture, Consumer Electronics and Online Shopping Centers.

Online sales channels

Italian online businesses generated most of their turnover on their own website (40 percent), marketplaces (28 percent), mobile apps(8 percent)

According to the report, ecommerce websites in Italy are expected to grow 17.3 percent in terms of turnover this year.

The Leisure Time, Food and Fashion and Health and Beauty sectors are especially expected to grow in online turnover. (respectively 23, 20 and 19 percent).