I always think there are huge opportunities for growth in intra-EU trade. It's a market with over 500M people and a $17 trillion GDP. While the EU has taken away a lot of trade barriers, language and unfamiliar regulations remain a huge barrier, but also a huge potential for growth.
If a company in California has ample opportunities to sell in Florida (>2000 miles away), why then is it significantly more difficult for a company in Greece to sell in Denmark, which is a much shorter distance.
There is a notable lack of an open European marketplace along the lines of Alibaba. There are many challenges in making that model work for the EU, especially ~24 languages and big cultural differences, but the tech industry is in a good position to overcome such boundaries.
> If a company in California has ample opportunities to sell in Florida (>2000 miles away), why then is it significantly more difficult for a company in Greece to sell in Denmark, which is a much shorter distance.
The US has a federal "interstate commerce clause" which means that individual states cannot regulate trade with other states. The federal government has all the control, which would be like the European Union having control.
The US version is a bit more far-reaching but the Common Market[1] allows me to sell almost anything in any EU country.
Incidentally, Amazon is one such example. If I buy something on the German amazon.de the contract is formed with Amazon EU S.à r.l. in Luxemburg and the goods are often shipped from a Polish warehouse.
The difficulties companies face within the EU are largely language and culture related rather than legal.
And quite often Amazon will even ship within Europe. Many articles on Amazon UK have a note that delivery will take 2-3 days instead of 1 day, which is always a sign that they ship it from a warehouse somewhere else in Europe (mostly Germany).
And this seems to work for FBA articles as well. But they can handle that due to their own logistic network. Parcels within Europe are still rather expensive, compared to a domestic Parcel. I can still send articles much cheaper from London to Inverness (Scotland) than to Brussels, even though Brussels is closer.
But that's probably just a function of the low B2C trade across borders, which leads to a sparse delivery network.
No, they are not really. Schengen is mostly about border controls. For example, Switzerland is in Schengen but they are not part of the EU customs zone, so goods cannot be freely moved across the border (although there are a lot of bilateral treaties to make this easier).
But the EU has their own version of the Commerce Clause, the Common Market.
How would you suggest going about overcoming these differences? I live in the EU. I've thought about this for some time and I can't really think of a scalable approach.
One aspect of the problem is taxes and regulations, which for the most part has to be addressed politically. The different jurisdictions are a cause for friction, too.
The even more significant barrier however is the linguistic and cultural one. It's not sufficient to just translate a say English language website to French in order to start selling in France (and providing proper idiomatic translations for each of the main EU languages is difficult enough). There are cultural differences right down to which website designs are popular in any given EU country at a time. You often can tell where a website is 'located' just by looking at its design.
I've been living in the EU (Croatia) now for three years and I'm honestly baffled that people here think that these are legitimately barriers to trade. As another commenter noted: We're all using GMail and AirBnB and Etsy, despite our "cultural differences".
I think that, in the quest for a cheaper laptop, people won't care much that the product description isn't a grammatically perfect rendering of their local Norwegian subdialect. In fact, I bet a site that mandated English (I know, shudder all you want, but it's true) as the language for sellers would mop up here. Everybody 40 and younger (AKA "your target market") speaks/reads English flawlessly.
Taxes and regulations? Big problem. Totally agree with you. This is probably what's kept Amazon such a bit player in Europe.
Cultural and linguistic differences? Not a major issue.
Taxes and regulations shouldn't be a problem. If you send an article from Croatia to Germany, you won't have to worry about any regulations or taxes that are different from sending it within Croatia. But any non-express parcel will take 3+ days and cost at least 3x as much, which is why people prefer to buy domestic.
No, I don't think that's necessary. It immediately seems like a platform specifically designed to support things like EU-wide compliance, marketing, payments and other business functions could potentially be beneficial to a wide variety of businesses.
Selling Gmail (ad's or hosted apps) isn't intra-EU trade (in so far as Google's an American company headquartered in Mountain View, though they do have many offices in the EU).
The implication of a consultancy company is that their work is done ad-hoc and in a one-off fashion, requiring lots of work from the company which stupidly only scales with the number of employees.
Software that successfully automated away the most toilsome parts of the job, allowing a handful of people to support intra-EU between any of the 28 member countries would do quite well.
Bezos is infamous for his ego, and I think he just doesn't see it.
Actually, I think that this is the chink in Amazon's armor, the bare patch on Smaug's underside.
Only a few European countries have Amazon stores and the brand loyalty for them isn't strong. A single EU store would become quickly popular and has the potential to be bigger than Amazon, given that the EU is larger than the US in market size.
There is, it's Amazon. They're closing in on $20 billion in European sales, growing at double digits, with something like 50,000 employees. If you look at what they're doing in Europe, Amazon is getting more aggressive by the year in terms of expanding and investing there.
I use Amazon in Europa a LOT, but funny enough it is not ONE amazon in EU, it is many - and I have to search for products on all of them, because what is available in amazon.de might not be available in amazon.co.uk. And there are obviously language barriers - and having to do math to convert currencies etc. It is anything but smooth right now - unless you are in one of the countries, that have their own amazon.tld, of course.
I want amazon.eu, where I can filter by products, that can actually be shipped to my EU country - one stop shopping. I would probably stop buying online from local shops in my country entirely.
"I want amazon.eu, where I can filter by products, that can actually be shipped to my EU country"
100 hundred times this! I avoid using Amazon just for their shipping information stupidity - I have to use checkout to be able to see if selected item can be shipped to my country. I find it funny and bizarre that it's easier to order online from China (which is half the World away) than from neighboring countries that belong to the same free trade zone. Ebay has an "EU only" search option, but it's useless as Ebay itself has become smaller Aliexpress cousin with same items and higher prices.
And a small European country like Ireland doesn't get its own Amazon store so they have to rely on Amazon.co.uk, where everything is priced in Sterling (not Euro). Irish customers can't avail of Amazon Prime, shipping times take longer etc. A federated Amazon.eu with a continent-wide distribution network may help. Goods priced in Euro certainly would.
Yeh it's a joke seeing as they are based here. And so many of us have to use Parcel Motel service to send things to Northern Ireland and have it driven down. Surely Amazon can make a little extra margin by doing that itself.
1. Get a pair of really giant hands
2. Repeat the bit "seeing as they are based here" and make really giant air quotes when you say "based"
3. Profit (without tax)
I think what the poster was saying is that the major sites are still country-specific, like I moved to Germany and here I use amazon.de, amazon.uk is a different site, so is amazon.fr, etc.
I've been looking into this a bit, but put off by the fact that EU VAT for digital products isnt really being enforced upon US companies, so not sure there is much of a market for it. Also, as a brit I'm not sure how brexit might screw up the business model.
It's amazing how much you pay for UK products in Germany, way way more than the cost of shipping. Of course that particular opportunity will be gone soon, but I'm sure there are other routes.
To what extent does the EU need to substantially consolidate language further to become more effective? There are two dozen major languages spoken in the EU. Nearly half of the EU can't communicate well with the other half because they share no common language. How do you get the EU to pursue a standardization of language, such that ~95% of people in the EU are fluent in at least one EU-wide common language (whether Spanish, English or other)?
A large part of the EU population below a certain age is reasonably fluent in English already. It's only a matter of time until that part amounts to 95%.
Still, the language of commerce in a country for the most part is the official language of that country. I'm not sure as to what can be done about that.
Beside the old generation from the former eastern block (who studied Russian instead of English) pretty much everyone speaks enough English to communicate.
I've traveled to EU a lot and even in a country like France I had zero problems getting by.
"I've traveled to EU a lot and even in a country like France I had zero problems getting by."
Only if you travel along established tourist routes. Go to a local marketplace or try to ask for directions in a smaller town and you will find it hard in many EU countries. Yes, in Northern countries even most elders speak English fluently, but in South I have had many situations where finding a single English speaking person was a challenge (notably in Greece and Italy).
I don't believe it. I live in Croatia and everybody under 30 speaks English beautifully. Almost everybody under 40 speaks functional English. Most people under 50 understand commercial English, even if their grammar is shit.
You probably didn't struggle to find an English-speaking person. You struggled to find a person willing to speak English with you. That's a subtle, but important, difference.
Most of my neighbors pretend not to understand English around tourists because it saves them enormous hassle. At first, I was appalled when I realized this. Now, I confess to doing it myself. It gets exhausting answering the same questions from unresourceful tourists over and over again.
Locals don't want to be your tour guide. They just want to enjoy their coffee in peace.
Agreed. English might be a de-facto standard to some extent and many people use it if they have to. But the truth is, people are lazy and most people find it easy to communicate in their mother tongue and tedious to communicate in English.
Look at what happened to facebook when they started offering localized versions, their growth suddenly exploded over here.
I believe this will take a long time, and it certainly is a major barrier.
But that's a political problem. After the UK quits, only Ireland has English as their native language. While it's easiest to use English across the EU, it's not really desired to have a trade language that is different from all major languages spoken.
And in addition to that, even though most young people can communicate well in English doesn't mean they want to shop in an English store. You need to have a very good proficiency (probably C2) to know the English words for all articles you have in your household.
But translating a website shouldn't be a big deal anyway.
I disagree it's a political problem. Or in other words, it's only a problem if you put politics in it.
Let me tell you an old story. I'm spanish. We had in the late 90's a mail list about the Delphi programming environment. Delphi was made by Borland, a private company that had translated the IDE to French and German.
At a certain moment there was a vocal group in the list that very insistently demanded that everybody made a petition to Borland to create a Spanish translation of the IDE (the manuals had already been translated). I didn't care, not only because I had already read every manual when Delphi was released, before they were translated, but also because I believed that any pro should know enough English to move around, instead of depending on the ones that had already done the job.
I tried to stay away from the discusion until a friend tried to force my hand very publicly with the argument that Spanish was no less important than English in culture or number of speakers or quality programmers... the political problem!
So I had to answer the obvious: English was not only important to communicate with English speakers. I can talk with people from Sweden, Russia, Poland, Greece... instead of learning a dozen languages. It's not a matter of what should be, it's a matter of what is!
And that was twenty years ago. Today my teen son has no problem chatting in Minecraft with people all around the world.
About shopping in an English store, they do. Google Translate works great if there's a problem. There is that musical instruments shop that everybody uses and another of bikes, both in Germany. People are used to the English words for that stuff anyway. The difficult thing, even in local shops is hearing many terms translated. What is a "flanger" called in Spanish? No idea. Or a "chorus", etc. We just used that as is. Household stuff are in local stores, no need to shop them online.
Anyway, if you look a little above, you'll see my comment that I think it would be a good idea to create a company that help other companies to operate in a multinational space. I was thinking more on taxes and regulations, but of course decent translations would be nice to have.
If a company in California has ample opportunities to sell in Florida (>2000 miles away), why then is it significantly more difficult for a company in Greece to sell in Denmark, which is a much shorter distance.
There is a notable lack of an open European marketplace along the lines of Alibaba. There are many challenges in making that model work for the EU, especially ~24 languages and big cultural differences, but the tech industry is in a good position to overcome such boundaries.