20 February 2013
LA POSTE GROUP'S RESPONSE TO THE EUROPEAN
COMMISSION'S GREEN PAPER
"AN INTEGRATED PARCEL DELIVERY MARKET FOR
THE GROWTH OF E-COMMERCE IN THE EU"
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 2
Table of contents
III- La Poste Group's response to the Green Paper ............. 5
1. Introduction ....................................................................................................5
2. E-commerce: one of many ways of buying and selling, but one that is growing fast
because of highly competitive prices.......................................................................6
E-commerce: buying and selling, in a nutshell .......................................................6
2.2 A form of commerce that is growing exponentially in France and in other
European countries... .........................................................................................7
2.3 ...mainly on the strength of undeniable price competitiveness ...........................8
3. Cross-border e-commerce is growing ..................................................................9
3.1 Cross-border e-commerce is growing faster than domestic e-commerce ........... 10
3.2 The sluggishness of cross-border trade at European level is only relative and is
not necessarily a sign that there is no market ..................................................... 11
3.3 It is difficult to estimate the actual volumes of cross-border parcels, which, in any
case, are higher than those measured directly .................................................... 11
3.4 In the long term, the share of cross-border flows is set to decline as e-commerce
grows ............................................................................................................ 12
4. Parcel delivery: an essential, complex link in the e-commerce value chain ............. 12
4.1 Parcel delivery: a key part of the e-commerce value chain, which contractually
binds delivery operators and e-retailers .............................................................. 13
4.2 The economic impact of parcel delivery needs to be seen in the broader
perspective of the e-commerce value chain ........................................................ 14
4.3 The growing number of industry players is a sign of the sector's attractiveness
and competitive drive....................................................................................... 15
4.4 Services are increasingly tailored to e-retailers' delivery requirements, especially
for SMEs in the e-commerce sector. ................................................................... 16
4.5 Postal operators are making cross-border arrangements to boost trust and make
parcel deliveries more efficient despite the complexity of flows between countries ... 18
5. Over-regulation could dampen e-commerce's development ................................. 20
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 3
5.1 A competitive, brisk market that satisfies most e-retailers' demand.................. 20
5.2 The regulatory framework ensures that even small websites have access to basic
postal services at affordable prices .................................................................... 20
5.3 And yet the inherent characteristics of Internet-based business do not smooth the
way for small e-commerce websites ................................................................... 22
5.4 A broader problem of trust, in spite of well-developed consumer safeguards ..... 23
5.5 Under these circumstances, ex ante regulation of the dominant position not only
serves no point but may also prove counterproductive ......................................... 25
6. Delivery operators and e-retailers are continuing their efforts to streamline crossborder exchanges and boost consumer satisfaction ................................................ 27
V- Appendices .................................................................... 29
Appendix 1: The growth of e-commerce varies widely from one Member State to
another............................................................................................................. 30
Appendix 2: X2C marketplaces ............................................................................ 33
Appendix 3: The different delivery methods offered by parcel delivery operators,
tailored to consumers' lifestyle ............................................................................ 35
Appendix 4: Description of the French e-commerce market ..................................... 37
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 4
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 5
III- La Poste Group's response to the Green Paper
1. Introduction
La Poste Group is happy to see the initiatives taken by the European Commission to promote ecommerce in Europe, and in particular its Green Paper, which was adopted on 29 November
2012 and submitted for public consultation until 22 February 2013. It is in delivery operators'
interests to boost the growth of e-commerce, as it is synonymous with an increase in the
volumes of parcels sent and, hence, of their business.
La Poste Group wishes to contribute to this public consultation by means of this document (a
brief overview of which can be found in the executive summary) and the detailed answers to the
questions asked in the Green Paper.
This document is divided into five parts.
Section 2 reminds readers that e-commerce is, first and foremost, a form of commerce, which is
growing exponentially in France and in other European countries on the strength of an
undeniable price competitiveness.
Section 3 sets out the facts of the development of cross-border e-commerce in Europe, which
we believe the Commission has underestimated.
In Section 4, we explain how the e-commerce sector operates, how the various actors relate to
each other, and postal operators' true role in the value chain.
Section 5 shows that the development of competition on the delivery market on the one hand,
and the regulatory framework on the other, are capable of promoting the development of ecommerce. On the contrary, any additional regulation of the delivery market could only be
detrimental to the objective in mind. The key factor today lies in the stakeholders' trust in this
form of commerce - trust that should be nurtured, at delivery operator level, by providing
innovative services that exactly match the expectations of e-commerce players (e-retailers and
consumers). By reducing operators' investment capacity and room for manoeuvre, any
additional regulation would prove counterproductive.
And finally, in Section 6, we describe the efforts of the Group and the postal industry as a whole
to support this development by improving interoperability solutions between European operators
and developing products and services that meet e-retailers' needs.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 6
2. E-commerce: one of many ways of buying and selling, but one that is growing fast
because of highly competitive prices
E-commerce: buying and selling, in a nutshell
This section will help the reader
understand our detailed answers
to questions 2, 10 and 14.
The development of electronic commerce is intrinsically linked to the digital revolution and
Internet's move into the mainstream. In a broader perspective, it also stems from changes in
our societies and in consumer behaviour. The pioneers of e-commerce, Amazon and eBay,
emerged in the mid-1990s.
E-commerce is a response to changes in the behaviour of shoppers and society in general, but
remains, first and foremost, trade, in the sense of a business transaction: the vast majority of
online shopping sites resell (as is) goods bought from third parties (manufacturers, wholesalers,
etc.) to end consumers. There are very few producers selling their products directly to
consumers online.
E-commerce is a form of retailing in the same way as are outdoor markets, door-to-door sales,
traditional mail-order sales (ordering by phone or by post) and brick-and-mortar stores.
According to the sixth Oxatis study on e-retailers1, 34% of e-retailers are retailers, 29% are
company managers and 13% are "pure players". Today, having an online shopping site is part of
a business's overall development strategy. The Internet is an additional sales channel.
However there are a number of features that set this particular sales channel apart from other
forms of commerce.
First of all, e-commerce is different to shopping in a brick-and-mortar store because of its
customer-relationships model. Its virtual interface with customers means that, wherever they
are, they have access to the entire product and service range. They can decide what they want
to buy, place their order and receive the goods without having to go into an actual store. This
interface is constantly evolving as technology advances (m-commerce, social networks, etc.). Ecommerce makes it possible to personalise the relationship with the customer, offer a wider
range of products and services, and lower prices, as we will see further on.
Secondly, while the question of store location and the location of products on the shelves is
essential for off-line commerce, the question of the products and services' visibility on the Net is
critical for e-retailers. What one website sells is in direct competition with everything else sold
on the Internet. For a website to be noticed by customers, it has to stand out from the crowd.
Visibility is crucial because it determines access to the market. This explains why advertising and
marketing expenses account for such a large share of online shopping sites' total costs (an
average 25% for e-retailing in 2004 and up to 41% for the pure players). It also accounts for
the development of marketplaces (see below and Appendix 2).
Lastly, the logistics organisation and the information system (feeding information into databases
on products, sales and customers, inventory management, order preparation and shipping) are
of crucial importance in e-commerce and call for very high-level skills. For e-retailers, the postorder phase (from order-taking to order-preparation and through to parcel delivery and returns
1
Oxatis (2013), "Le profil des e-commerçants", to be published shortly.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 7
management, if any) is the one that fulfils the sales promise, creates contact with the customer
and determines customer loyalty.
2.2 A form of commerce that is growing exponentially in France and in other European
countries...
According to the Internet usage survey run by market research firm Médiamétrie, the number of
online shoppers in France rose 5% between September 2011 and September 2012, which
represents an additional 1.4 million online shoppers. Today, 31.9 million online users in France
make purchases over the Internet, i.e. over 78% of the online user population. 2.
According to the survey on the spread of information and communication technologies in French
society conducted in June 2012 by Crédoc, nearly half of people (49%) does all or part of their
shopping over the Internet. The figure varies widely, though, with the person's age, education
level and income3.
The growing number of online shoppers partly accounts for the compound annual growth in
online sales, which increased by over 20% a year in France between 2006 and 2011, according
to Fevad (e-commerce and distance selling federation) figures. In 2011, distance sales of
products and services4 in France represented €42.9 billion, including €21.4 billion for material
goods alone (services, which are by definition immaterial, are not included). In 2012, online
sales reached €45 billion, up 19% in one year. The growth of e-commerce in 2012 was fuelled
by a steep increase in demand, driven by the arrival of new online shoppers (+5% in the first 11
months of the year) and much greater supply (the number of shopping websites increased by
17% compared to 2011).
By comparison, retail and commercial craft sales grew by 3.1% in value and 1.3% in volume in
2011, according to Insee (France's National Institute for Statistics and Economic Studies), after
a 1.4% volume increase in 2010.
It should be pointed out, though, that this growth in e-commerce concerns quite small volumes
as yet, even if they are set to increase (online commerce currently represents only 4-7% of
retail commerce in France, according to estimates) 5.
At European level also, the growth of electronic commerce is remarkable, though it varies with
the country. At EU level, the electronic commerce market is estimated at €91 billion in 2010
(Commission working documents, 20126), i.e. 4% of the revenue of the European retail
2
According to a survey on living conditions and aspirations by the Crédoc studies and research institute, the figure is
lower: 61%.
3
The survey found 63% of under-40s shop online, as against only 40% of over-40s. Between non-graduates and the
people with the highest education level, the proportion increases fivefold (15% of online shoppers in the former
category; 75% in the latter). In households with a monthly income of less than €1,500, less than one in every three
people shop online, whereas in the highest-income households, the figure more than doubles (71%).
4
Services are the goods most frequently bought online. According to the latest key figures published by Fevad (2012
edition), 56%, 53% and 49% of online users, respectively, bought goods in the travel/tourism, services and cultural
products categories in the past six months, as against 44% in the textile category, 35% in high-tech products, 18% in
games and toys, and 17% in home appliances.
5
According to Insee figures, distance sales represent 4% of retail commerce revenue in 2010; the CRR-Kelkoo study
(2011) puts this figure at 7.3%. In a Crédoc survey (2010) of professionals, consultants and researchers specialised in
the commerce and distribution sector, all of these stakeholders said they believed that e-commerce would represent
24% of retail commerce in France in 2020.
6
Commission Staff Working Document (2012), "Bringing e-commerce benefits to consumers", SEC(2011) 1640 final, 11
January 2012.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 8
commerce sector. In 2011, 43% of European consumers bought goods or services online,
compared with only 26% in 2006 (Eurostat data). On average, the number of online shoppers
has risen by 13% per year. Over the period, we can see that online commerce has grown in all
European countries, at varying speeds, depending on the market's maturity and the quality of
the various business drivers (see Appendix 1).
2.3 ...mainly on the strength of undeniable price competitiveness
As with traditional commerce, the key success factors for this sales channel are to be found in
the characteristics of supply and demand (and their match), and the economic viability of the
players' business model. What makes electronic commerce attractive to consumers is its
competitiveness in both price and non-price aspects by comparison with other forms of
commerce.
The most frequently mentioned non-price advantages of e-commerce over off-line commerce
are the availability of the goods and services (users can shop whenever they like), their
diversity, the possibility of personalising them, and being able to quickly compare them. Online
commerce also removes certain constraints for both consumers and merchants: time constraints
(store opening hours) and geographical constraints (a webshop's catchment area is in principle
unlimited, if we exclude language problems).
But what consumers find most appealing about e-commerce remains the prospect of finding
"bargains" and saving money. According to the latest Fevad/CSA survey of online shoppers'
purchase intentions in 20137, "the prospect of more attractive prices" remains one of the main
reasons for shopping online, mentioned by 72% of online users. A number of studies have found
that the prices of many products are lower online than in off-line stores8, with the exception of
food items, though, which are handicapped by the very high costs of product storage
(maintaining the cold chain).9.
A Banque de France working document (2010)10 holds that, based on the findings of an
econometric study, "the rise in the percentage of distance selling is associated with a drop in
prices over the 1990-2007 period". The findings "suggest that a doubling in distance selling's
market share in France thanks to online commerce (taking it to the same level as in the UK)
could lead to a half-point drop in the annual inflation rate in France".
The management consulting firm McKinsey (2011) 11 compared the prices of 150 products in
webshops and in off-line stores and concluded that, in France, the prices found on the Web are
nearly 10% lower than those charged in the off-line network. This price differential is thought to
generate annual savings of around €2.5 billion for consumers.
7
Survey conducted online from 26 December 2012 to 2 January 2013 with a representative sample of 1,005 French
online users aged 18 to 74.
8
Admittedly many of the studies that compared prices between different sales channels did not settle the question of
whether or not to include delivery charges, given its complexity (the policy on delivery charges varies from one website
to another, and delivery charges vary with the type of delivery chosen, the number of articles bought or the total value
of the order, etc.).
9
In this respect, rising travel costs (as a result of rising energy costs) should give e-commerce an even greater
competitive advantage over off-line commerce, especially in peripheral or rural areas where off-line commerce
necessarily involves motorised travel. E-retailers are also banking on an alternative strategy by setting up drive-through
systems: a cross between in-store shopping and online shopping.
10
P. Askenazy, C. Célérier, D. Idrac (2010), "Vente à distance, internet et dynamique des prix", Banque de France
working document, July.
11
McKinsey (2011), "Impact d’Internet sur l’économie française – Comment Internet transforme notre pays", March.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 9
More recently, the Autorité de la Concurrence (France's national competition regulator) (2012)12
noted that "the Internet channel's price advantage can be estimated at around 10% for small
appliances such as televisions or digital cameras. For major appliances, the price differences are
relatively differentiated: less than 5% for washing machines and refrigerators, and 10% or more
for dishwashers and microwave ovens. Where computing equipment is concerned, price
differences for laptop computers are very small, whereas the average online prices for printers
are relatively attractive compared with the average off-line prices (over 10% difference).(...) In
pharmaceutical goods, for the vast majority of items examined (roughly 90%), the average
online price is lower than the average price in brick-and-mortar outlets. For most items, the
average online price is 5-15% lower than the average off-line price."
This price competitiveness of online commerce over off-line commerce is due to a number of
factors. Most importantly, the online market is, in theory, less compartmentalised than the offline market. All online shoppers and all online merchants can theoretically meet up online,
whereas a brick-and-mortar store's catchment area is generally confined to a geographic area,
which may or may not be very big. Likewise, access to the market appears to be facilitated by
the development of "marketplaces" by some large online shopping sites, who, for an affordable
price, allow even small-scale sellers to reach the vast audience formed by these websites' usual
customer base (see Appendix 2). And yet small online shopping sites' affiliation to a marketplace
is not without drawbacks: they can find themselves economically dependent on the marketplace
and this, in the end, can have an adverse effect on their business growth.
Moreover, the market would appear to be more transparent, given the information available free
of charge online (on forums, social networks, etc.) regarding both the seller (quality of service)
and the goods traded (quality, price positioning). The development of price-comparison sites
also heightens the incentives for e-retailers to strive for a low-priced positioning, even if these
sites do not guarantee access to the best possible offer (they simply provide a ranking of the
items referenced). Even so, these websites help online consumers find, compare and access
online offers from merchant sites referenced by the comparison sites (according to an IFOP
report from April 2011, 92% of French online users used a price comparison website before
making a major purchase). They also enable merchant sites to make their products and services
more visible and more accessible through their listing on comparison sites.
This price competitiveness of online shopping sites proves that, on the whole, parcel delivery
costs are not a problem. But we will return to this point further on. Before broaching this
subject, though, let's go back to one of the issues raised by the Commission, namely the
apparent under-development of cross-border e-commerce.
3. Cross-border e-commerce is growing
This section will help the reader
understand our detailed answers
to questions 2 and 14.
The European Commission regrets the sluggish growth of cross-border e-commerce. According
to Eurostat data, whereas the number of domestic online consumers went from 32% to 43% of
the EU27 population between 2008 and 2011, the number of online consumers who shopped
Autorité de la Concurrence, "Avis n° 12-A-20 du 18 septembre 2012 relatif au fonctionnement concurrentiel du
commerce électronique".
12
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 10
online from e-retailers based in a different EU country increased by only 4 points, from 6% to
10%. This observation calls for a number of remarks.
3.1 Cross-border e-commerce is growing faster than domestic e-commerce
The percentage of the European population who shop online outside their domestic market may
seem low in absolute terms, but it should be noted that the annual average growth rate of
cross-border e-commerce is nearly twice that of domestic e-commerce over the period under
review (respectively, 22.2% as against 11.4%).
There would appear to be a learning process under way here: consumers take their first steps as
online shoppers on their domestic market (with which they are more familiar) before venturing
across borders. If we compare the number of cross-border online shoppers not with the total
population but with the population of domestic online shoppers (who already have some
experience of online shopping), the proportion of online consumers shopping on foreign sites
reaches 24% at EU level in 2012 (see Graph 1).
Graph 1
Source: Eurostat, Information society statistics. Data extracted on 21 January 2013. 2012 data for all countries except
2011 data for the UK. EU27 with 2011 data for the UK.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 11
3.2 The sluggishness of cross-border trade at European level is only relative and is not
necessarily a sign that there is a market failure
We can see that cross-border e-commerce is very well developed in the "small" Member States,
i.e. on markets where the domestic supply probably cannot meet consumer demand (in terms of
variety).
For example, in Austria, Belgium, Denmark, Finland, Ireland, Luxembourg and Malta, over 20%
of the population bought a product online from a seller in a different European country in 2011.
In the larger countries, on the contrary, the domestic offer of both off-line and online retailers
may prove to be sufficiently varied and competitive for consumers - who we will presume to be
rational - to have no need to use foreign providers.
This reasoning would appear to be borne out by the fact that, compared with the number of
active online consumers on the domestic market, the number of cross-border online consumers
is particularly low in Germany and the United Kingdom (14%), two of the main European
countries leading the domestic e-commerce market. On the other hand, over 84% of online
consumers in Malta, Cyprus and Luxembourg shop on foreign sites.
A recent survey on e-commerce in the Nordic countries 13 also supports this reasoning. For the
purposes of this survey, consumers were polled about the reasons for which they did not shop
from foreign websites. Delivery costs were never mentioned as a reason for this behaviour. The
most frequently mentioned reason was that consumers found what they were looking for on
domestic sites.
3.3 It is difficult to estimate the actual volumes of cross-border parcels, which, in any
case, are higher than those measured directly
The European Commission's figures should be treated with caution. It has proved very difficult
to estimate the actual cross-border volumes.
Sellers that ship large volumes of goods to private consumers (business-to-consumer or B2C
trade), and which would have sufficient volumes to ship to Country "B" for a delivery operator to
make up several pallets or even fill a lorry, use what are known as "direct entry" solutions. The
parcels are prepared in Country "A" with the label of the delivery operator in the destination
Country "B". They transit, on pallets if necessary, through a consolidation point via an
intermediary, which is sometimes a postal operator or a major private transport company. At
best, a direct transport route joins the original warehouse with a sorting centre owned by the
destination delivery operator, which often takes charge of the business relationship. La Poste
has a large number of business customers based outside France and whose parcels are
packaged in neighbouring countries. These customers are treated as domestic customers and in
effect enjoy the same services and prices as domestic customers. Often there is nothing to
distinguish direct-entry parcels from domestic parcels.
In 2012, La Poste carried 4.65 million direct-entry parcels (this figure is 113% higher than the
estimate made in 2011). This figure does not include the volumes handled by some large
13
PostNord (2012), "E-commerce in the Nordics 2012".
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 12
international e-commerce platforms. It is interesting to note that this figure, which is already
underestimated, is far higher than the volume of import parcels handled by La Poste in 2012.
Similarly, in the small parcel segment, direct entry represents a significant and growing share of
international trade. For example, a large e-retailer in the west of France puts through hundreds
of thousands of parcels per year directly into the Deutsche Post network for its customers who
order from Germany.
As these examples show, estimating the volumes involved is a complex task.
3.4 In the long term, the share of cross-border flows is set to decline as e-commerce
grows
Cross-borders flows will in all likelihood dwindle with the continuing expansion of e-commerce,
as it becomes profitable for e-retailers who have developed their business on a foreign market to
set up operations there.
Amazon's decision to set up operations in Italy is an enlightening example. In October 2011,
Amazon opened its first distribution centre in the Piacenza region in the north of Italy. The
25,000 m² facility services the entire Italian market, from the north to the south and including
the islands (Sicily and Sardinia). The new warehouse automatically changed Italian online
shoppers' purchases from cross-border flows (from a warehouse situated in France or the United
Kingdom) into domestic flows.
This status change from "cross-border" to "domestic" flows artificially penalised the growth of
intra-European e-commerce. And yet the ensuing "drop" in cross-border volumes is by no
means a sign that e-commerce is flagging: on the contrary, it reflects strong growth in the
sector. As e-retailers gradually expand and grow, cross-border flows will represent a smaller and
smaller share of the parcels carried. For successful e-retailers, cross-border sales represent a
transitional phase that comes just before the establishment of local operations closer to
demand.
For this reason, the measurement of cross-border flows, just like the measurement of crossborder payments, is an indicator that needs to be handled with caution. Taken alone, they are
not an accurate indication of the growth of e-commerce abroad insofar as e-retailers with
significant business in foreign countries have alternative solutions to cross-border flows (such as
direct-entry solutions or the establishment of product storage platforms in the country in
question, which change cross-border flows into domestic flows).
4. Parcel delivery: an essential, complex link in the e-commerce value chain
This section will help the reader understand
our detailed answers to questions 5, 6, 10,
11, 12 and 14.
According to the Commission, "Delivery is indeed critical as it has a substantial impact on
facilitating e-commerce trade and is a key element for building trust between sellers and
buyers". This is undeniable, but contrary to what the Commission maintains, it is not delivery
that poses the real problem and hampers the growth of e-commerce in Europe. Especially as the
delivery sector is adopting a more efficient organisation.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 13
4.1 Parcel delivery: a key part of the e-commerce value chain, which contractually binds
delivery operators and e-retailers
As we have already said, the quality of the logistics organisation (both upstream and
downstream) is of the utmost importance for an e-retailer's commercial success. It is not
enough to attract customers to the website and encourage them to buy; the e-retailer must then
honour the commercial promise to retain them. This entails good transaction management, an
efficient order-preparation logistics network and a reliable delivery system.
By comparison with off-line commerce, e-commerce poses more complex logistics problems, i.e.
managing flows of goods and information to ship a given product to its place of consumption, at
the right time and at the lowest cost. The main differences between the two forms of commerce,
in terms of the logistics, stem from order preparation and physical delivery.
In the off-line sales model, retailers buy large volumes of goods from their suppliers to stock its
shelves. The customers then come and pick the goods they want, fill their shopping trolleys and
take their purchases home with them. In online commerce, e-retailers assemble the order items
themselves from their stock, then deliver the parcel, or have it delivered, to the address given
by the end-customer.
This final stage - the "last mile" logistics - is further complicated by a variety of factors: it
involves a home delivery (access problems, customer absence, etc.), orders can be split into
several deliveries (small delivery quantities imply managing a far larger fleet of small delivery
vehicles), the catchment area is very large (the Internet eliminates spatial constraints) and
customer expectations are high (in terms of delivery times, order tracking, etc.).
E-retailers could manage the last-mile logistics themselves if they had an adequate vehicle fleet
and delivery staff, but most of the time the delivery service is contracted out. Outsourcing
delivery gives e-retailers greater flexibility and helps optimise their costs, especially as delivery
services are imporving, fuelled by growing demand from e-retailers.
Outsourced delivery services contractually bind the e-retailer to the chosen delivery operators.
More specifically, the e-commerce value chain contains two types of business relationships,
based on the principle of the freedom to contract (see Diagram 1):


the business relationship between the online shopping site and the service provider that
delivers the parcels;
the business relationship between the online shopping site and the end-consumer.
Generally speaking, the service provider that delivers the parcels has no contractual relationship
with the good's end-consumer. The delivery service provider's customer is the online shopping
site, to whom the delivery service provider guarantees a certain quality of service, on a
contractual basis.
The nature of the contractual relationships between the various stakeholders stems from the
fact that the delivery service is part of the service provided by the e-retailer (in economic terms,
it is an "input" in its production function). E-retailers are free to pass through on the cost of this
input to the end-consumers as they want:


at a lower price than the actual cost;
at cost;
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 14


taking a margin on the service;
explicitly showing (or not) the cost of the service on the invoice sent to the endconsumer.
Diagram 1. The contractual relationships at work in e-commerce
As we can see, e-retailers' pricing policies vary widely here. Sometimes delivery is free of
charge, either for orders over a given amount or for all amounts (the price shown is allinclusive). If not, delivery costs are invoiced to the customer (the price of the item and the
delivery price are shown separately). The delivery charges are sometimes a flat rate for the
specific type of delivery chosen (home delivery or delivery to a relay point), regardless of the
fact that the cost of these two types of delivery are different. It is common to find sizeable price
differences from one website to another for the same delivery service by the same carrier. These
stem from the online shopping site's business strategy, not from discriminatory practices on the
part of the carrier.
4.2 The economic impact of parcel delivery needs to be seen in the broader perspective
of the e-commerce value chain
According to research firm Xerfi's figures for France14, in 2011, nearly 315 million parcels were
shipped by online sellers in a delivery market worth an estimated €2.5 billion. This translates to
an average revenue of €8 per parcel for delivery operators. In cost terms, delivery to the endconsumer is thought to represent, on average, 10-30% of the total charges borne by an eretailer to run its business (see supply chain diagram), excluding the cost of buying the goods
sold. These percentages therefore overestimate the share of delivery costs in an e-retailer's
operating costs.
14
Xerfi (2012), "Logistique et e-commerce", August 2012.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 15
Since more precise information about costs is not available, an alternative is to consider delivery
costs as a percentage of e-retailers' revenue. The studies available and our own in-house
analyses15 show that delivery costs represent only 5-10% of e-retailers' turnover, depending on
their business - figures that suggest delivery prices are not such an important factor in the ecommerce's competitiveness. Supposing that delivery costs represent 10% of an e-retailer's
turnover, a 20% reduction in delivery costs would represent 2% of turnover.
Source: La Poste in-house study (2011), XERFI e-commerce et logistique (2012): according to our interpretations,
delivery represents a market worth over €2 billion in the overall e-commerce services value chain worth over €10 billion,
i.e. roughly 20%.
4.3 The growing number of industry players is a sign of the sector's attractiveness and
competitive drive
Until recently, logistics services for e-commerce were mainly provided by traditional distancesellers (mail orders) and the incumbent postal operators. E-commerce was long considered a
non-profitable business by both express operators and traditional logistics providers. Their
business model was based on a business-to-business (B2B) system that was difficult to adapt to
the constraints of business-to-consumers (B2C) online sales (small volumes, handling of
individual parcels, home deliveries, etc.) and which effectively prevented them from entering the
market. However, the growth of e-commerce has been such that, since 2008, specialised elogistics providers have emerged and express operators and major traditional logistics operators
have adapted their service lines to support their historic customers' multi-channel strategy.
15
A study commissioned by USPS (Smarter strategies for free shipping, a Forrester Consulting thought leadership paper
commissioned by USPS, January 2011) showed that, according to retailers, shipping costs range from 5% to 20% of
their total turnover. In 2011, Amazon's sales amounted to $48 billion, when the shipping costs came to $4 billion.
Shipping costs represented 8.3% of turnover (Amazon's 2011 Annual Report). A report produced for the UK postal
regulator (Frontier Economics and Postal & Logistics Consulting Worldwide (2010), Research on the wider market for
packets/parcels services, report for Postcomm) explains that the goods most commonly sold over the Internet are
clothing, music, games, office supplies and books. For these products, postal delivery charges are thought to represent
around 5-10% of the total price.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 16
According to the founder and CEO of envoimoinscher.com (a website for comparing parcel
shipping prices and delivery services), Jean-Baptiste Renié, "Everyone wants a share of France's
fast-growing parcel delivery market. On one hand, the global express heavyweights such as
FedEx, DHL and UPS; on the other, delivery networks installed in neighbourhood shops, such as
Kiala, Mondial Relay and Relais Colis."16
Competition is becoming keener along the whole e-supply chain: both upstream (procurement
from the supplier, receipt and storage of the goods, order preparation, website management,
etc.) and downstream (delivery to the end-customer and handling of returns). The recent arrival
of pure players like Supplyweb and Shipleader, for example, and the development of high valueadded services are fuelling rivalry between e-logistics specialists. Additionally, some e-retailers
act as logistics operators on behalf of smaller e-retailers via their marketplace17. Amazon,
Pixmania and more recently 3Suisses offer this type of service. 18.
Online shopping sites can use various types of transport providers to deliver their parcels, such
as carriers, logistics operators (who receive the goods, repackage them, prepare the orders then
hand them over to a carrier), postal operators, express operators, or go through a
marketplace19.
In many European countries, postal operators are still the benchmark players on the domestic
market for the delivery of goods sold online to consumers20: in France, La Poste still holds
around 60% of the market; in Germany, Deutsche Post-DHL holds 63% and in the Netherlands,
PostNL holds 69%. The markets are in a process of a complete restructuring, though, and the
incumbent operator and new entrants alike stand to gain from the e-commerce boom.
On the market for intra-EU cross-border parcel deliveries, the incumbent postal operators hold
far smaller market shares and face stiffer competition from private operators such as Fedex,
UPS, DHL, etc.
4.4 Services are increasingly tailored to e-retailers' delivery requirements, especially for
SMEs in the e-commerce sector.
This competition, along with the business opportunities opened up by the development of ecommerce against the underlying downturn in mail services, is spurring postal operators to offer
delivery services that are increasingly tailored to the demand from e-retailers and consumers, at
both national and cross-border level.
Delivery operators have invested - and are continuing to invest - heavily in upgrading their
services to satisfy their customers' requirements. They are expanding their service offers,
16
Article published in the magazine Challenges dated 13 December 2012, p. 38.
See Appendix 3.
18
Launched by Amazon in 2009, "Fulfillment by Amazon" is a dedicated service that lets small-scale e-retailers
outsource the entire supply chain. Amazon adds a "Shipped by Amazon" label to items listed on its marketplace, so its
online services are consistent. "E-merchant" is a turnkey e-commerce solution launched by Pixmania in 2006. Drawing
on the group's experience and infrastructure, the solution is intended as much for "pure players" as for "click-andmortar" retailers (i.e. offline brands that also have an online presence). Carrefour, Elite, ST Dupont, Universal Mobile
and Bouygues Telecom are among the customers that have outsourced their e-commerce logistics to Pixmania.
19
Some large online shopping sites (Amazon, eBay and Pixmania) offer smaller businesses the option of combining their
volumes with the larger site's volumes to consolidate the flows and lower their costs, via a marketplace.
20
Notable exceptions can be found, however, in the United Kingdom, Ireland, Spain, Portugal, Switzerland, Poland and
Italy.
17
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 17
bringing in new delivery systems21 (networks of relay points, or parcel kiosks) and enhancing
their quality of service (guaranteed delivery times, parcel tracking, etc.).
La Poste Group, for instance, has a proactive policy for e-retailers on the domestic market
(reliable deliveries, online parcel tracking, online franking, etc.). Part of this policy was to launch
two ranges of parcel services in 2010 purpose-designed for this type of customer: MyChrono by
the Chronopost express branch and So Colissimo by the ColiPoste parcel branch.
The So Colissimo offer, which was created specifically for e-commerce, offers online shoppers a
wide choice of delivery methods:
-
-
At the shopper's choice of location: at home or at the office, in one of the 5,600 relay
points in the Group's PickUp network (scheduled to have nearly 7,000 by end-2013), in a
post office or in a parcel kiosk (automated locker) (Cityssimo22);
With parcel tracking throughout the delivery process.
The My Chrono service, which was purpose-designed for online sales, is a home delivery service
that delivers by 1pm the next day, Monday to Saturday. The parcel is insured and the recipient
has to sign for it.
In addition to these "parcel" solutions, e-retailers can also use "small packet" solutions for
packets weighing up to 2kg. More specifically, the Lettre Max solution offers e-retailers next-day
delivery of small goods weighing up to 1kg and up to 2cm thick. It includes online tracking,
compensation for loss, damage or theft, at very competitive rates (€1.58 excl. tax up to 50g per
piece; €4.69 excl. tax for parcels between 500g and 1kg per piece). The average price of the
most frequently-used weight bracket is between €2 and €3. Small businesses can also receive
volume discounts for relatively small amounts. This product range is particularly suitable for new
e-retailers, whose volume of business is still small but growing: it gives them a chance to
develop their business with a reliable, affordable delivery solution.
At the same time, La Poste launched a turnkey solution for SMEs and very small businesses.
Known as the "Box E-commerce", it helps entrepreneurs, very small businesses and SMEs get
started in online commerce. As a service solutions integrator, La Poste combines several of the
Group's solutions in this offer: shipment of goods sold online, the Scellius secure online payment
solution managed by La Banque Postale, ID Timbre and personalised stamps to boost off-line
notoriety, etc. It also offers a number of special deals from its partners, such as listing in the
shopping.com directory, the purchase of keywords with Google, transaction management with
PayPal, storage with Neolog, and the integration of accounting or sales administration software
suites.
La Poste expanded its service offer by buying out two companies in 2012. The first was
Mixcommerce, a leading e-commerce delegation player23 in France in early 2012. The second
was Orium, a specialist in cross-channel logistics solutions and customer relationship
21
See Appendix 3.
Cityssimo spaces are automated parcel-collection sites accessible on a 24/7 basis (except for Cityssimo spaces subject
to shopping centres' opening hours). There are currently 31 Cityssimo spaces in France: in Paris and the Ile-de-France
region, Lyon, Lille, Aix en Provence and Nantes. When the parcel is ready for collection, the recipient is informed by email or text message, including a code for retrieving the parcel within 10 working days. After that date, uncollected
parcels are returned to the sender.
23
E-commerce delegation is a form of service whereby a specialised operator takes complete charge of a company's
Internet-based business activity. The operator sets up and manages the technical aspects of the company's website and
takes care of search engine optimisation, marketing promotions and logistics.
22
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 18
management for e-commerce businesses, in August of the same year. More recently, the Group
bought out Morin Logistic, the top e-commerce logistics player in France, on 8 January 2013. By
applying a proactive strategy to address the e-commerce market's expectations, La Poste will, in
the medium term, enable numerous small e-retailers to develop their business with the help of
the Group's logistics solutions.
The Group has a very comprehensive range of international services. The entry-level "small
packets" range sold by the mail branch, in particular, is a valuable complement to the services
offered by the parcel and express branches, namely ColiPoste and Chronopost. The "small
packets" line includes "PostExport", a set of ready-to-mail pre-paid solutions for shipping goods
up to 2kg abroad; "Paquet prio", for more urgent packets up to 3kg, depending on the
destination; and "Paquet éco", a more economical solution for packets up to 2kg, etc. The
shipping services for small goods were developed specifically to meet the needs of smaller
customers and are ideally suited to e-retailers' requirements. In 2012, sales of this product
increased by 41% in volume terms. Over 10 million packets were shipped from France to other
countries and 30 million imported packets (all origins combined) were delivered.
4.5 Postal operators are making cross-border arrangements to boost trust and make
parcel deliveries more efficient despite the complexity of flows trading between countries
The difficulty of shipping parcel flows from one country to another can be explained by the
historical configuration of small-parcel carrier networks (0-30kg) and national postal operators,
based on their dominant flows, which are overwhelmingly domestic. These networks are often
built in "interconnected star" shapes to channel and consolidate regional flows to a regional
sorting centre before shipping them to other regional sorting centres. The economics of parcel
transport requires flows to be consolidated, so it is rare for a parcel sent from A to B to be
shipped there in a straight line. In some countries, the geographic layout and the population
density make it possible to service the majority of the population using a "hub-and-spoke"
network. As volumes increase, it becomes feasible for an operator to run more direct links and
modify its network to limit the distances travelled.
Historically, international shipments have been consolidated at a single point for subsequent
bulk shipping to a single point in the destination country. For air transport, the consolidation
point is often the shipping country's main airport. It is not always the regional sorting centre
closest to the destination country. In France, the Ile-de-France region ships proportionally more
export parcels than the other regions. Overall optimisation of transport costs can result in a
shipment from point "a" in country "A" to point "b" in country "B" taking a rather long route. For
instance, a shipment from Strasbourg to Kehl might transit through Paris and Frankfurt.
The cost of international transport is not simply proportional to the distance between the origin
and the destination; it also depends, for example, on the impossibility of making direct links due
to insufficient volumes. It is also the result of more frequent intermediate reloading operations
and hence higher costs than domestic shipments. But even so, it represents a real saving by
comparison with the costs of a widespread system of direct cross-border links.
Moreover, in the parcels field, international flows are structured more by the consumption
markets than by the production markets. This is especially true in distance sales ("business-toconsumer" - B2C) and trade between consumers ("consumer-to-consumer" - C2C), where the
common language structures the flows. Belgium (Wallonia) and French-speaking Switzerland are
the top export destinations for La Poste in France, for example, whereas commercial and
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 19
industrial flows go primarily to Germany. For La Poste, it would therefore make more sense to
optimise the links to Belgium or French-speaking Switzerland rather than the links between
France and Germany.
Diagram of cross-border goods-shipping flows
Despite these difficulties, initiatives are under way to make cross-border parcel delivery services
more reliable and more efficient for both industry and individual operators.
In industry, initiatives were launched in 1996 to make parcel-shipping networks more
interoperable. More specifically, nine northern-European postal operators set up the "enhanced
parcels group" within IPC. The group, now comprised of 29 parcel operators 24 and renamed EPG
("E-Parcel Group"), is a parcel delivery network that ensures top-level quality standards among
the group's partners. This quality of service, which is available at competitive rates, relies on a
tracking system and an efficient customer service department. The tracking system uses
standardised barcodes and the customer service department works through an always-up link
between the different operators' call centres. Group members have also undertaken to meet
target parcel-shipping delivery times (next-day delivery or delivery within two days of the
parcel's arrival in the incoming exchange office) and respond promptly to customers' requests.
Since 2006, IPC has been carrying out monthly performance monitoring of affiliated operators'
priority and non-priority parcel shipments through the "Parcel Performance Reporting" system.
At national level, La Poste is also developing innovative solutions to improve its international
parcel-shipping services. For example, since November 2012, the software programs and
international parcel franking systems that La Poste offers its customers, allow them to print out
24
Österreichische Post (AT), bpost (BE), Swiss Post (CH), Czech Post (CZ), Deutsche Post (DE), Post Danmark (DK),
Eesti Post (EE), Correos (ES), Itella (FI), ColiPoste (FR), Chronopost (FR), Royal Mail (UK), ELTA (GR), Magyar Posta
(HU), An Post (IE), Iceland Post (IS), Poste Italiane (IT), Lithuania Post (LT), Latvia Post (LV), P&T Luxembourg (LU),
Malta Post (MT), TNT Post (NL), Norway Post (NO), Poczta Polska (PL), CTT Expresso (PT), Posten Logistic (SE), Posta
Slovenije (SI), Slovak Post (SK), USPS (US).
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 20
labels and barcodes that are compatible with those of several European operators. This
facilitates international transit, including return flows to the sender country.
To sum up, delivery operators are constantly adapting to e-commerce:


they are adapting their offers of logistics services for distance-selling websites;
they are diversifying delivery methods for end-consumers;
Lastly, they are carefully selecting their investments (especially in cross-border services, where
there are only small volumes on which to recoup targeted investments), based on customers'
stated requirements and each project's specific financial constraints.
5. Over-regulation could dampen e-commerce's development
This section will help the reader understand our
detailed answers to questions 2, 8, 9, 13 and 14.
As we saw earlier, e-commerce's attractiveness lies mainly in its competitive prices by
comparison with off-line commerce. The shipping costs for goods sold remotely would not
appear to make e-commerce less competitive than traditional commerce.
What is holding back the growth of small e-commerce websites is less a problem of parcel
shipping costs than a feature specific to Internet-related businesses and a problem of general
consumer trust in the various parties involved. The competition among delivery operators means
that most e-retailers enjoy attractive rates and service lines that match their needs. The
universal postal service for parcels, as currently defined by the Postal Directive, acts as a safety
net for the smaller operators. Against this backdrop, any additional regulation would prove
counterproductive.
5.1 A competitive, brisk market that satisfies most e-retailers' demand
The competitive buoyancy of the parcel delivery market mentioned earlier guarantees e-retailers
of a certain size access to a variety of parcel shipping solutions that are helping to fuel the
growth of e-commerce. They range from "basic" offers with basic services up to "value-added"
offers that include parcel tracking at every step of the way, signature on delivery, insurance,
etc., all at competitive rates.
This is especially true as some e-commerce websites have a considerable power of
negotiationfacing the delivery operators (strong concentration of e-retailers corroborated by
confidential data on La Poste's clientele).
5.2 The regulatory framework ensures that even small websites have access to basic
postal services at affordable prices
Admittedly, small online shopping sites with limited business and therefore relatively small
volumes of parcels, and consumers who ship only a few parcels per year as part of their C2C
trade,25, are not the most attractive customer segment for some delivery operators.
25
Though marginal, parcel shipments by consumers have been boosted in recent years by the development of C2C
(consumer-to-consumer) electronic commerce, driven by e-commerce platforms such as eBay and PriceMinister. On
average, 13% of Europeans sold goods or services over the Internet in 2010. This average masks significant differences
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 21
However the existing regulatory framework provides a suitable solution for these small e-sellers.
More specifically, the universal postal service guarantees them access to affordably-priced parcel
shipping offers, sold individually, for parcels weighing up to 10kg or 20kg, depending on the
regulations in force in the Member States, sent to destinations in the same country or in any EU
country. In 2011, 12.5% of the parcels handled by La Poste came under the universal service.
This figure is consistent with the Commission's estimate, according to which 10% of all parcels
handled in Europe come under the universal service.
This relatively minor usage of the universal service "safety net", especially by small-scale
professionals, is due to the fact that e-retailers in France have access to products with exactly
the same features as the universal service but at lower prices because of volume discounts
(Colissimo Access range). Retailers are likely to be offered discounts on domestic and
international product ranges if they top relatively low thresholds (a few parcels per working
day).
Even though some delivery operators (such as international integrators and large-scale logistics
operators) show little interest in this customer segment, other operators, and primarily postal
operators, take a different approach and foresee the growth potential of these e-commerce
players.
With this in mind, La Poste Group has developed a whole range of e-logistics services that
include much more than parcel shipping services and are designed specifically to help small eretailers develop their business in domestic and international markets.
Data on La Poste's "business" customers shows that its services are ideally suited to small
professionals wanting to send goods abroad (small-scale senders, for example, are overrepresented in international deliveries by comparison with domestic deliveries). Of the 21,000
business customers who use La Poste's international parcels division, 98.8% are small-scale
senders that send fewer than 1,000 parcels a year. They represent nearly 70% of export parcel
volumes, but only 3% of the total volumes handled by La Poste's parcel division (see table
below).
Total parcels
International export
parcels
% of total volume
% of total volume
[0-5,000]
10%
86.8%
[5,000- >10,000]
90%
13.2%
100%
100%
No. of parcels per yr
Total
Source: La Poste Group data
Under these circumstances, there is no justification for extending the universal postal service for
parcels, especially as no market failure has been observed. Moreover, imposing additional
constraints on postal operators with regard to parcel deliveries would only increase the cost that
the latter already bear. If these cost increases could not be passed on and factored into the
prices, it would have an adverse effect on parcel operators' profitability and could eventually
jeopardise their economic viability.
from one country to another (only 1% of Bulgarians, Greeks, Cypriots and Romanians sold goods or services over the
Internet in 2010, as against 28% of Danes, according to Eurostat figures).
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 22
And as we have already mentioned, an extension of the universal parcel service could not, in
itself, guarantee lower delivery charges for end-consumers: any decrease in delivery charges
would benefit the e-retailers, who are not obliged to pass on the decrease in the delivery
charges invoiced to the end consumers.
5.3 And yet the inherent characteristics of Internet-based business do not smooth the
way for small e-commerce websites
The universality of the Internet led us to expect markets to expand and the range of products
and services to proliferate, making Internet-related markets more transparent and competitive.
But only a handful of businesses manage to emerge on Internet-related markets, often with one
business in a dominant position. For example, Google dominates the search engine market (with
more than 9 out of every 10 visits in France, Germany, Spain and the United Kingdom in
September 2012, according to web analytics firm AT Internet), eBay dominates the online
auctions market and Internet Explorer the browser market.
Likewise, in the electronic commerce sector, a few global players dominate the markets. In
countries where online commerce is relatively well developed, such as France, Germany and the
United Kingdom, despite the presence of a large number of merchant sites (either operators that
make the bulk or all of their sales over the Internet - i.e. "pure players" - or traditional
operators that have developed their online business - i.e. "click-and-mortar" businesses26), the
online selling business is still highly concentrated around a few major merchant sites (see
Appendix 4 for a description of the situation in France) and appears to be more concentrated
than off-line commerce.
This tendency for a handful of players to dominate the Internet can be explained by the
existence of major network externalities27 and the need to invest heavily in advertising and
communications to stand out from the crowd and become more visible on the Net. These
network effects create a retroactive spiral: any rise in demand will lead to a rise in supply, which
in turn fuels demand, and so on. With networked services, therefore, on the supply side the
strong will typically grow stronger while the weak grow weaker (Shapiro and Varian, 1998) 28.
Network effects tend to promote a concentration of supply, as consumers gravitate towards the
services most in use.
Under these circumstances, it can be hard for small websites to get ahead, unless they offer
products that are differentiated in some way from those sold on the big online shopping sites, or
unless they invest heavily in advertising campaigns to give their product or brand a higher
profile and increase their notoriety. Competition on price alone seems untenable for these small
websites today. And as it happens, tightening the regulations on delivery services would not
solve the problem.
26
Pure players dominate French e-commerce, whereas in the United Kingdom, off-line retailers lead the field. In
Germany, traditional distance selling operators are well represented.
27
In most Internet-related businesses (auctions, online sales, electronic communications, etc.), their usefulness or their
ability to satisfy a consumer hinges on the number of users of the service, on both the supply side and the demand side:
there is no point for a user to log onto an auction site or a marketplace platform if there are not enough users and
suppliers present (i.e. if there are insufficient services offered). For the suppliers, the point of offering services on the
network hinges on the number of users (i.e. potential customers) and competitors.
28
C. Shapiro and H. Varian (1998), Information Rules: A Strategic Guide to the Network Economy, Harvard Business
School Press.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 23
5.4 A broader problem of trust, in spite of well-developed consumer safeguards
Judging by Eurostat's latest household survey, the problem of shoppers' trust in parcel deliveries
needs to be qualified. Whereas the prospect of delivery problems deterred 4% of Europeans
from shopping online in 2009, 11% and 10% of Europeans, respectively, refrained for fear of
fraud (concerning payment) and because of reluctance to disclose personal information.
A number of reports have underlined the importance of a secure, reliable online payment
infrastructure to combat the fraud and illegal acts that discourage consumers from using this
sales channel, especially on international markets (Ho et al., 2007). Despite the steps taken by
e-retailers and payment providers to make payment systems more efficient and secure, a recent
report by the European Central Bank (2012) shows that bank card fraud is on the rise. In 2010,
fraud is said to have represented a total of €1.26 billion, up 12.1% on 2009. Half of this fraud is
reported to concern remote payments.
To boost consumer confidence in cross-border e-commerce in particular, steps should probably
be taken to clarify the role of each stakeholder in the e-commerce supply chain, specify the
nature of their contractual relationships and inform consumers more extensively about the
regulations in place to protect them.
Bear in mind that, in transactions involving consumers (B2C and C2C), the e-buyer deals with
the e-seller but has no contractual relationship with the delivery operator. The latter is bound by
contract to the e-seller, whether the e-seller is a professional (B2C transaction) or a private
individual (C2C transaction).
The contractual relationships between buyers and professional sellers are governed, at national
and European level, by various texts that give the consumer a high level of protection. This
protection is provided both before and after the contract is signed. Beforehand, a set of texts
defines the rights applicable to consumers (contractual information, right to withdraw from the
sale, etc.). If disputes arise after the contract has been signed, it provides alternative methods
for settling disputes, legal proceedings and collective redress proceedings 29.
The recent Consumer Rights Directive adopted on 25 October 2011 (and which must be
transposed in all of the Member States by 13 December 2013 so that it can be applied from 13
June 2014) harmonises national consumer protection rules30. These major advances mainly
oblige distance sellers to give consumers perfectly clear information before the contract is signed
(tax inclusive price, payment and delivery terms and conditions, cooling-off period, cost of
returning goods, complaints handling, etc.). They also extend the right of withdrawal period to
14 days and require distance sellers to provide a standard contract-cancellation form. The
application of this directive should foster the development of cross-border trade by providing
greater legal security for both consumers and professionals.
29
France is on the point of bringing in this type of consumer protection system. The aim is to give consumers an ex post
avenue of redress so that they can obtain redress for any damages through a class-action suit.
30
Prior to this directive and its forthcoming transposition into national law, consumers were not without rights and
protection where distance selling is concerned. In France, for instance, Articles L.121-16 et seq. of the Consumer Code
regulate distance selling and already provide consumers with a high level of protection (professionals are under
obligation to provide pre-contractual information, the terms and conditions of sale, how to exercise the right to cancel
during the cooling-off period, delivery deadlines, etc.).
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 24
Additionally, the proposed directive on out-of-court settlement of consumer disputes (the
Alternative Dispute Resolution Directive)31, which may be adopted in March of this year, will give
consumers "access to an effective and inexpensive way of solving their disputes with traders,
regardless of the goods or services that they buy, however they buy (online or offline) and
wherever they buy in the EU". At the same time, it will help businesses because "access to
alternative dispute resolution will be key to managing customer relations and enhancing
corporate image, and also to save the costs of litigation". The directive provides for setting up
out-of-court entities that will resolve disputes within 90 days. They will have to meet certain
quality criteria, i.e. be well-qualified, impartial, transparent, effective and fair. Professionals will
be under obligation to inform customers about the mediation bodies and undertake to refer
disputes to them.
The contractual relationship between the e-seller and the service provider that delivers the
goods to the end-consumer on the e-seller's behalf are governed by ordinary law on contracts
between service providers and principals in a business-to-business relationship.
The shipment of goods via the postal network is also subject to the provisions of the postal
directive. Article 19 of the directive states that postal service providers are to provide
"transparent, simple and inexpensive procedures for dealing with postal users' complaints,
particularly in cases involving loss, theft, damage or noncompliance with service quality
standards". The procedures set up must "enable disputes to be settled fairly and promptly with
provision, where warranted, for a system of reimbursement and/or compensation". These
procedures cover all postal products, whether or not they are part of the universal service.
The complaints system established at La Poste32 allows anyone to file a complaint, free of
charge, with the Group, which undertakes to reply within a reasonable time frame. Anyone who
wishes to have their case re-examined at the end of the complaint process can lodge an appeal,
in the same conditions as the initial complaint. Anyone not satisfied with the reply may then
apply to the La Poste Group Mediator, who issues an opinion, with supporting arguments, to
serve as a recommendation between the parties 33. Lastly, the Act of 9 February 2010 gave the
postal regulator new powers to handle complaints by postal service users that could not be
satisfactorily settled by the postal service providers' own procedures. Anyone can refer a matter
to the ARCEP (France's telecom and postal regulator) after having exhausted all of the avenues
of redress made available by La Poste. Every year, the regulator publishes a summary and a
review of the complaints brought to its knowledge 34. This comprehensive complaints-handling
system encourages La Poste to constantly improve its services to increase its users' satisfaction.
Competition law is another tool that can be used to protect consumers and maintain healthy
competition. It is a binding framework for businesses, and especially businesses in a dominant
position (such as incumbent postal operators). The latter are liable to heavy fines in the event of
31
Alongside the proposed ADR Directive, there is also a proposed Online Dispute Resolution (ODR) Regulation, which will
set up an EU-wide online platform for handling consumer disputes that arise from online transactions. The platform will
work with the mediation bodies and serve as an interface between consumers and professionals, referring them to the
national mediation body competent to handle the dispute. The regulation also states that Member States will be able to
extend use of the platform to purely national matters within a Member State.
32
Six call centres have been set up to answer consumers' requests for information and complaints about their national
shipments, along with a dedicated call centre for international shipments and two dedicated call centres for businesses.
In all, the system draws on over 600 employees.
33
This company mediation system is also provided for by Article 19 of the postal directive, which states that "Member
States shall also encourage the development of independent out-of-court schemes for the resolution of disputes between
postal service providers and users".
34
Few matters are referred to ARCEP, which shows that La Poste's complaints-handling system works.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 25
non-compliance with Articles 101 and 102 of the Treaty on the Functioning of the European
Union (TFEU) - which regulate, respectively, agreements that may restrict competition, and
abuses of a dominant position - and to the payment of damages to the victims of the offence.
5.5 Under these circumstances, ex ante regulation of the dominant position not only
serves no point but may also prove counterproductive
The Green Paper holds that some delivery markets are dominated by a handful of operators
whose behaviour prevents e-retailers and consumers from taking full advantage of the
competition. The Commission is considering introducing ex ante regulation that would, it says,
establish sustainable competition on the market. The regulatory measures considered include,
for example, transparency obligations, the provision of access to the network, and obligations
with regard to prices. These regulatory constraints would apply to operators with significant
market power.
This approach stems directly from the directives applicable to the electronic communications
sector35. However, according to the Commission's recommendations in this sector 36, several
cumulative criteria are to be met for a market to be susceptible to ex ante regulation. The first
criterion is the presence of high and non-transitory barriers to entry. The Commission also
stresses the need to carry out a prospective analysis, factoring in market convergence. Lastly,
ex ante regulation should not be applied to markets whose structure tends towards effective
competition.
In the parcel delivery sector, these conditions are not met. Accordingly, ex ante regulation
should not be imposed.
Regarding the first point, most observers agree that there are few barriers to entry in the postal
sector (no reputation effects, no switching costs, low sunk costs37). The main barrier to entry
might be the existence of economies of scale, but the reports cited consider that even this
possible barrier is not insurmountable. These findings are upheld and even amplified when we
look more specifically at the parcel market, either home deliveries 38 or deliveries to relay points
(the French regulator39 considered that this model, which saves alternative operators from
having to cover the "last mile", limits the barriers resulting from economies of scale).
Moreover, it has consistently been acknowledged that the postal delivery network is not an
essential facility. This conclusion was recently confirmed for parcel delivery services by the
French regulatory and competition authorities40.
35
Directive 2002/21/EC of 7 March 2002 on a common regulatory framework for electronic communications networks
and services (Framework Directive). Directive 2002/19/EC of 7 March 2002 on access to, and interconnection of,
electronic communications networks and associated facilities (Access Directive).
36
Commission Recommendation of 17 December 2007 on relevant product and service markets within the electronic
communications sector susceptible to ex ante regulation.
37
Ecorys (2005) ―Development of competition in the European postal sector‖, Final study; Heitzler, S. (2009),
―Traditional regulatory approaches and the postal service market‖, Competition and Regulation in Network Industries,
10(1), 77–105; Panzar, John C. (2009). ―Interactions between regulatory and antitrust policies in a liberalized postal
sector‖, in: Handbook of Worldwide Postal Reform, ed. by Michael A. Crew and Paul R. Kleindorfer, Edward Elgar.
38
Trinkner (2007) Applied Industrial and Regulatory Economics – The Case of Liberalizing the Mail Market Dissertation
39
ARCEP Opinion No. 2011-0195 of 8 March 2011 (French regulatory authority); Competition Authority Decision No. 11MC-01 of 12 May 2011.
40
ARCEP Opinion No. 2011-0195 of 8 March 2011 (French postal sector regulatory authority); Competition Authority
Decision No. 11-MC-01 of 12 May 2011.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 26
The incumbent operators continue to hold substantial shares of the B2C parcel market in a
number of countries. Even so, it should be borne in mind that the Commission, in its
recommendations41 for the electronic communications sector, notes that the competitive nature
of the market should be assessed not in a static manner but dynamically, taking into account
"the convergence of products and markets which may give rise to competitive constraints being
exercised between operators active in distinct product markets". On the parcel market, the
convergence of the B2B and B2C markets ensures that the parcel market is effectively tending
towards a competitive situation.
On the supply side, first of all, note that B2B and B2C services are very similar in their upstream
processes. One of the differences in the delivery process is the lower density of B2C depots,
though this density is likely to increase with the e-commerce boom. Delivery to the workplace is
also becoming more frequent - a feature that B2C and B2B deliveries have in common. Another
difference between B2B and B2C used to be the ―delivery failure rate‖. However B2C operators
are taking innovative steps to reduce the failure rate (delivery to a neighbour, notification by
text message, choice of the delivery time slot, lockers).Note also that delivery to a relay point
makes B2C delivery identical to a B2B delivery as far as the logistics are concerned. Lastly, note
that B2B operators are becoming involved in B2C deliveries. On the demand side, B2C
consumers now have similar requirements to B2B consumers. Today, private individuals expect
high-quality delivery and tracking options that used to be reserved for B2B customers. While
B2C operators are upgrading their quality of service, B2B operators today are also offering nonpriority services to cater for their customers' desire to save money. The convergence of the
different segments has been noted by not only the operators but also the regulators42, certain
competition authorities and the European Commission43. These convergences are a sign that the
market is indeed tending towards a competitive situation.44.
It would appear therefore that all of the conditions necessary for an ex ante regulation to be
applied to a possible dominant position on the parcel market are not met.
Moreover, it is very widely recognised that access obligations can curb investments and slow
innovation in sectors subject to access regulation. The characteristics of the parcel delivery
sector are such that access regulation seems to have a particularly strong disincentive effect on
innovation. Deterring innovation in the delivery sector in this way would have a very detrimental
effect on the growth of e-commerce.
Above all, an obligation of access to postal operators' delivery network would lead the
competitors to concentrate their business in the upstream segments, thereby depriving
consumers of the innovations these competitors might have brought to delivery (whereas it is
precisely in the delivery business that there are the most openings for innovation and where
consumer demand for new services is the strongest).
41
Commission Recommendation of 17 December 2007 on relevant product and service markets within the electronic
communications sector susceptible to ex ante regulation.
42
ARCEP, Observatoire des activités postales: [regarding the Express and Non-Express segments]: "It is becoming
increasingly difficult, though, to tell these two segments apart, as the operators are offering increasingly similar
products". Postcomm, Laying the foundations for a sustainable postal service Annex 1: Analysis of Markets Decision
document November 2010: ―After consideration of the points raised by interested parties and additional information, we
conclude that B2B and B2C are part of the same B2X market‖
43
Brussels, XXX SEC(2011) 1641 COMMISSION STAFF WORKING PAPER Online services, including e-commerce, in the
Single Market Accompanying the document COMMUNICATION FROM THE COMMISSION: ―Moreover, the market sees a
higher convergence between express and parcel services, especially in terms of the products offered.‖
44
ITA-WIK (2009) ―The Impact on Universal Service of the Full Market Accomplishment of the Postal Internal Market in
2009‖, Annexes.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 27
Additionally, access obligations dampen the incentive for the incumbent operators to innovate,
since it can no longer reap the full benefits of its investments and has to share them with its
competitors. This observation has, for example, led the European Commission itself to note that,
"[t]he existence of such an obligation — even for a fair remuneration — may undermine
undertakings' incentives to invest and innovate and, thereby, possibly harm consumers. The
knowledge that they may have a duty to supply against their will may lead dominant
undertakings — or undertakings who anticipate that they may become dominant — not to
invest, or to invest less, in the activity in question. Also, competitors may be tempted to free
ride on investments made by the dominant undertaking instead of investing themselves. Neither
of these consequences would, in the long run, be in the interest of consumers."45.
This negative effect of access obligations has always led the authorities to be very cautious
about enforcing obligations to supply and to confine them to sectors with essential facilities.
However, regulation and competition authorities have already deemed that the parcel sector
does not comprise any network segment that could not be reproduced by a competitor (see
above).
Lastly, access obligations (especially when they are accompanied by tight regulations on access
prices) are mainly designed to lower the prices and hence the income of the incumbent
operator. This drop in income reduces the operators' ability to finance their investments. Once
again, this is an even more pressing problem for postal operators whose mail business no longer
generates the funds to finance these investments.
6. Delivery operators and e-retailers are continuing their efforts to streamline crossborder exchanges and boost consumer satisfaction
This section will help the reader
understand our detailed answers to
questions 14, 16 and 17.
La Poste Group and the postal industry as a whole are well aware that, to boost the growth of ecommerce, we will have to improve quality of service, simplify delivery processes and constantly
tailor product and service ranges to users' demand. Accordingly, we are continuing to make a
huge effort to upgrade the services described in Sections 4.4 and 4.5.
One of the initiatives under way at La Poste Group to facilitate parcel receipt and meet consumer
expectations consists in making delivery times more flexible. So Colissimo, for instance, has
developed an option called "Mon Rendez-Vous" that lets online shoppers choose the most
convenient time slot for their home delivery from the range of available times, which has also
been extended from 5pm to 9pm (to date, this offer is only available in the centre of Paris).
Work is also in progress on launching delivery services that send online shoppers advance notice
by text message or e-mail so that they can choose their delivery time slot anywhere in France
and, if the delivery fails, reschedule a delivery time.
A similar initiative is under way at industry level.
The difficulty in developing services that let online shoppers choose their parcel reception
location for cross-border exchanges lies in managing multiple databases listing relay points in
different countries.
45
Communication from the Commission — Guidance on the Commission's enforcement priorities in applying Article 82 of
the EC Treaty to abusive exclusionary conduct by dominant undertakings.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 28
IPC, with the help of bpost, Deutsche Post, Post NL and La Poste Group, decided to take up the
challenge and in 2012, launched "Easy Collect Solution". The aim is to create a consolidated
database of parcel relay points in the countries involved in the project. An e-retailer could then
go through its domestic postal operator to obtain the list of parcel relay points in the recipient's
country. The service is expected to be operational in summer 2013. The solution will eventually
offer a wide choice of cross-border delivery options for online purchases (home delivery, delivery
to a relay point, a post office, a 24/7 parcel kiosk or automated locker, etc.).
To cater to e-retailers' cross-border shipping needs,
international service line from April 2013 to include:


La Poste Group
is
expanding
its
a small packet delivery service (for parcels up to 2kg) that requires no signature on
delivery. It provides basic tracking and sells for roughly 30% less than what is currently
on offer (delivery of parcels up to 30kg, with tracking and with signature on delivery and
guaranteed shipping times to 16 destination countries); and
a tracked, pre-paid return service (Retour Colissimo International) from the main
European destinations46 for parcels up to 30kg, at the same price as what is currently on
offer.
In addition, So Colissimo's domestic services will also be extended to Belgium for a small €1.50
surcharge. This is a tracked delivery to the home (with or without signature) or to one of 1,200
bpost post offices, for parcels up to 30kg. Parcels are delivered within 48 hours.
The postal industry is also taking steps to provide simple, easy solutions to the problem of
returns. In 2010, IPC launched the "Easy Return" (ERS) solution for cross-border returns. In
June 2012, 17 postal operators47 undertook, in time, to offer e-retailers this international priority
return solution. E-retailers will then be able to offer their international customers a prepaid
return label (this return offer will be included in the service package the e-retailer sells its
customers). Put simply, this solution will let an online shopper in Country A return goods
purchased online from an e-retailer in Country B, without having to complete any special
formalities with the postal operator and without having to bear the costs directly (the unsatisfied
consumer will simply hand over the re-labelled parcel in a post office or at the location shown on
the return label).
Lastly, IPC has launched the EMSEVT v3 project to improve quality of service. This is an
enhanced version of the existing tracking system, designed to track all postal items (parcels,
registered letters, declared-value items, etc.) using technically standardised labels. Many postal
operators have already budgeted for carrying out the EMSEVT v3 project during the 2012-2014
period. In the medium term, the project could standardise labelling and information-exchange
protocols.
46
Germany, Belgium, Czech Republic, Denmark, Finland, the United Kingdom, Ireland, the Netherlands, Luxembourg,
Estonia, Italy, Slovakia and Slovenia.
47
An Post (IE), bpost (BE), Correos (ES), Czech Post (CZ), Deutsche Post DHL (DE), Iceland Post (IS), Itella (FI), Le
Groupe La Poste (FR), Magyar Post (HU), Poste Italiane (IT), Posten (NO), P&T (LU), Royal Mail Group (UK), Swiss Post
(SW), TNT Post (NL), Slovak Post (SK) and Slovenia Post (SI).
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 29
V- Appendices
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 30
Appendix 1: The growth of e-commerce varies widely from one Member State to
another
On the supply side, we can see sizeable differences in the way this retail sales channel is
developing in Europe. Where 78% of UK retailers say they use the Internet to sell their goods,
the figure drops to 19% in Romania (Eurobarometer 300).
Source: Eurobarometer 300.
According to the latest data published by Eurostat, an average 20% of businesses in the
wholesale and retail sector have an online sales business (online sales represent at least 1% of
their turnover).
On the demand side, use of this sales channel necessarily varies widely also (given the existing
supply). Over 70% of British, Dutch, Danish and Swedish consumers shopped online in 2012.
The figure drops to 5% in Romania (Eurostat, Information society statistics).
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 31
Source: Eurostat, Information society statistics[isoc_ec_eseln2].
Source: Eurostat, Information society statistics [isoc_bdek_smi].
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 32
Research by Borsenberger and Oddo (2012) provides some explanations for the widely varying
status of e-commerce's development among European countries. The authors have identified
various macroeconomic and microeconomic factors they believe account for the development of
e-commerce at national and international level. The macroeconomic factors include Internet
access, secure payment systems, an efficient delivery network and government support.
Microeconomic factors include household wealth, consumer preferences and the product offer.
In an endeavour to establish the relative importance of each of these factors and find out
whether some factors are particularly influential, the authors gathered data on a variety of
demographic and socio-economic variables in the 27 Member States, the retail sector (online
and off-line), the number of public services online (which reflects the extent of e-government's
development), the quality of the logistics infrastructures (the scope of this index extends beyond
the quality of the postal delivery service) and the legal system.
After performing econometric modelling, the authors conclude that the main drivers for both
domestics and cross-border e-commerce are the number of households with an Internet
connection, the level of household wealth, households' proficiency in using the Internet and the
degree of security of online transactions.
At cross-border level, sharing the same language and being geographically close have a positive
impact on the growth of e-commerce. At national level, the number of retailers on the market
seems to have a negative impact on the number of online consumers, suggesting a substitution
effect between online commerce and off-line commerce. This substitution effect is not apparent
at cross-border level, which may suggest that consumers who shop online on a foreign website
are buying specific goods that they cannot find on their domestic off-line market. The quality of
the legal system (which online consumers can call on in the event of a dispute with an online
merchant) is also an important e-commerce growth driver. The quality of the logistics
infrastructure appears to be of lesser importance.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 33
Appendix 2: X2C marketplaces
An electronic "marketplace" is an online virtual space in which buyers and sellers meet to carry
out transactions for goods or services. The platform provides the different parties with tools to
streamline trading (online payment system, inventory management, authenticated information
about the seller and/or the buyer, various guarantees, etc.) and a showcase.
The marketplace operator (the intermediate platform) stands to gain by broadening its service
range and therefore its audience (this builds loyalty and keeps customers coming back), and by
pooling the marketing, commercial and technical costs with the affiliated sellers. The seller
stands to gain by acquiring a new sales channel at a lower cost, since the technical
infrastructure belongs to the marketplace operator. Affiliation with a marketplace can, however,
end up making a small shopping site dependent on the platform and, in the long run, hinder its
development.
Historically, eBay is one of the first "pure player" marketplaces to bring non-professional buyers
and sellers into contact48, based on a model of set-price transactions or bidding. The car-boot
sale model that eBay transposed onto the Internet influenced its approach to the marketplace:
there was little control over the goods offered for sale, no integrated payment system, no
catalogue system, etc.
The next key step in the development of this form of intermediation was the creation of
Amazon's marketplace on its own Internet site in the late 1990s/early 2000s. This is a hybrid
marketplace that also has a fully-fledged e-retailer business running parallel to its role as an
intermediation platform. It is now the benchmark model for marketplaces. Taking the opposite
approach to eBay, Amazon gave precedence to professional (or semi-professional) sellers and
made its marketplace an extremely regulated, secure space. Sellers are subject to strict rules
about their responsiveness, and the conditions for shipping orders and taking back returns. The
payment system if fully controlled by Amazon. In exchange, Amazon gives its professionals an
efficient and effective retailing channel and management tools that facilitate their business.
Within its marketplace, Amazon positions itself as a trusted third party: its role is to give
consumers that best possible quality of service, whether they buy on Amazon or through a seller
affiliated with the marketplace. Thanks to this initiative, Amazon was able to address "long-tail"
products and offer its customers a universal choice.
In France, one of the first players to follow Amazon's suit is the PriceMinister website, which was
created in 2000. This marketplace is reserved for consumers. It guarantees the transactions by
ensuring that the affiliated sellers are paid and that the buyers receive the goods ordered online.
Since then, the majority of the marketplaces that have sprung up are "pure players" or "clickand-mortar" players that open their showcase to third-party sellers. Rue du Commerce opened
its marketplace in 2007, followed by Pixmania in 2008, Fnac in 2009 and Cdiscount in 2011.
The success of marketplaces is a direct outcome of the development of e-commerce and the
proliferation of online shopping sites. Getting listed on the marketplace of a heavyweight like
Amazon is a way for a small-scale seller that has recently entered the market to raise its profile
with consumers.
48
eBay has since opened its marketplace to professional sellers.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 34
The most widespread business model for marketplaces is based on charging a commission on
sales. On some marketplaces, professional sellers whose sales volume tops a set threshold have
to pay the platform a monthly subscription fee. Marketplaces also generate income through
advertising. Because of the very broad audience generated by the multitude of goods and
services on offer, marketplaces attract advertisers and can charge for their audience.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 35
Appendix 3: The different delivery methods offered by parcel delivery operators,
tailored to consumers' lifestyle
Online shopping sites can also offer their customers a range of delivery methods. According to a
survey conducted by Crédoc for Fevad, La Poste, Reed Exhibitions and CCI Grand Lille on 24
October 2012 and designed to reveal the profile of distance-selling and online shoppers, home
delivery is still the most widespread type of order retrieval, though delivery to relay points is on
the rise.
Source: Crédoc.
An alternative to home delivery is parcel delivery to a relay point. Historically, relay points first
appeared in France in the 1980s at the initiative of mail-order sellers such as La Redoute (the
"Relais Colis" network) and Les Trois Suisses (the "Mondial Relay" network). The principle is
relatively simple: the parcel is shipped to a partner shop or business, which then hands it over
to the end-customer.
The development of distance-selling over the Internet has given this delivery method fresh
impetus. In recent years, new players have entered the market (Kiala, La Poste via Pickup
Services, etc.) and the proportion of parcels delivered to relay points, as against home
deliveries, is steadily growing. Today it is said to stand at between 15% and 20% of B2C
parcels, i.e. around 50 million parcels per year (source: Competition Authority, Decision No 11-
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 36
MC-01). Kiala's recent takeover by UPS is a sign that this delivery method is popular with
consumers.
There are many advantages to this form of delivery. It avoids failed home deliveries; it
addresses the after-sales service issue by providing a channel for returns and exchanges; the
relay points have set, long opening hours, often six days a week, and are scattered throughout
France near town centres in very urbanised locations.
In the last few years, a new method for retrieving parcels has been gaining ground, namely
parcel kiosks (automated lockers) such as the Cityssimo spaces set up by La Poste in France.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 37
Appendix 4: Description of the French e-commerce market
According to Fevad (e-commerce and distance selling federation), the number of active
merchant sites in France stood at 117,500 in 2012, up 17% on 2011 (following a 23% rise
between 2010 and 2011). From 2005 to 2012, the number of merchant sites was multiplied by
eight.
Source: Fevad.
Insee's figures also show that the majority of these businesses are very small. In 2009, 87% of
general or specialised distance selling businesses had no staff at all, as against 59% in retailing
as a whole. Distance selling businesses are therefore, proportionally, more likely to be very
small businesses.
Percentage of very small businesses in retailing and among distance selling
businesses
Total
No
employees
1-2
employees
3-5
employees
5-19
employees
Small
business
total
Retailing (excl.
automotive)
411,195
59%
19%
11%
5%
95%
General or
specialised
distance selling
9,517
87%
7%
3%
1%
98%
Source: Insee, SIRENE data, 2009.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 38
Despite the large number of websites, online sales remain a very concentrated business. Around
800 sites record over 10,000 transactions per month, while over 29,000 sites record fewer than
10 transactions per month. Fifteen sites are visited every month by 66% of online users and the
top sites receive over 10 million unique visitors per month. At the opposite end, 27.2% of sites
record between one and ten transactions per month. Moreover, the relative share of these very
small sites has been declining over the past three years in favour of medium-sized sites, as
numerous chains with a network of stores enter the sector.
Source: iCE Fevad – January 2012.
Over October-November 2012, nearly two-thirds of online users (65.1%) visited at least one of
the Top 15 sites on average each month. In all, an average 28.9 million online users visited one
of these sites.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00
Page | 39
TOP 15 MOST VISITED "E-COMMERCE" SITES IN FRANCE
Site
Unique visitors per
Unique visitors per
month
day
1
Amazon
14,653,000
1,616,000
2
Cdiscount
10,446,000
873,000
3
Fnac
10,253,000
861,000
4
eBay
9,986,000
1,436,000
5
La Redoute
7,883,000
609,000
6
Groupon
7,217,000
742,000
7
PriceMinister
7,145,000
690,000
8
Voyages-SNCF
6,975,000
517,000
9
Carrefour
6,609,000
414,000
10
Vente-privée
6,249,000
1,154,000
11
Rue du Commerce
5,404,000
354,000
12
Darty
4,721,000
281,000
13
Leroy Merlin
4,339,000
272,000
14
Pixmania
4,229,000
239,000
15
3 Suisses
3,970,000
250,000
Source: Médiamétrie/NetRatings – Categories created specifically for Fevad – France – All
connection locations combined – Monthly average for October and November 2012 – Internet
applications excluded.
The data also proves that business is far more concentrated in e-commerce than in offline
commerce (Xerfi study). Under these circumstances, e-commerce sites need to offer
differentiated product and service lines to stand out from the large online shopping sites.
Source: Xerfi study.
La Poste – Société anonyme (limited company) with a capital of €3,400,000,000 – 356 000 000 RCS PARIS
Head Office – 44 BOULEVARD DE VAUGIRARD – 75757 PARIS CEDEX – Tel: +33 (0)1 55 44 00 00