Consequences of Brexit to eCommerce sector

Consequences of Brexit to eCommerce sector

You may not have realized it yet, but in addition to the traditional import and export processes, Brexit will affect the eCommerce sector between the United Kingdom and the rest of Europe as well. I suppose when you think about it, probably the rest of the world too.

Under the current regulation apart from Germany, the United Kingdom is the second biggest European territory for carrying out eCommerce business. However, with the arrival of Brexit this could change completely.

The current thinking is that there should be an agreement between the United Kingdom and Brussels to prevent a situation that affects buyers and companies considerably. However, it is possible that if no agreement can be reached regarding online commerce, an assessment will have to be carried out to see what extent Brexit will affect everybody. If this should be the case then we will need to have a Plan B to execute immediately.

How will Brexit affect electronic commerce with the United Kingdom?

Nowadays, the United Kingdom is one of the countries where a greater percentage of people make online purchases from continental Europe. “Although we still do not know how Brexit will affect the pound sterling, which is the official currency of the United Kingdom, we already know that certain factors will affect both buyers and sellers alike. Both European and non-European countries, must take this into account when considering if it will be worth it or not to invest in digital commerce with the United Kingdom”, explains Tino Hyland, general manager of Hyland Shipping.

In fact, according to a recent study by the Ecommerce Foundation, online commerce between countries with commercial borders continues to represent challenges such as the speed of delivery or the final cost of the end product.

In addition, other challenges are detected, such as the damage caused to products or services when they reach the buyer, the problems of fraud, the difficulty regarding complaints and repairs, technical failures, difficulties in finding information regarding the guarantees or other legal rights or the fact that some companies do not market their products in certain countries and, therefore, buyers have no option to obtain them.

The consequences of Brexit on electronic commerce are the following:

Changes in legislation and regulations. As the United Kingdom becomes the third country facing the European Union and, therefore, move on to operate like any other country in the world, it is very likely that it will change its internal legislation, as well as regulations regarding electronic commerce, to rights and the protection of consumers and on certain products, factors that will surely hinder the fluidity of the commercial relations that have existed up to now.

The United Kingdom has historically and strategically been a key market for companies outside the EU that have established themselves in this territory to get closer to the other neighboring countries. However, we already know of some companies that, since the announcement of the Brexit, have chosen to move their European headquarters to another country and others that are carrying out their own private trade agreements with those countries and companies of the EU that most they interest at commercial level.

Same products and services, higher prices. With the departure of the United Kingdom from the EU the pound sterling will depreciate and, in turn, the products will experience a rise in prices, both for the purely administrative costs, as well as for the tariffs and taxes that will be imposed on foreign products in the customs and the costs for the maintenance of the waiting product, until having a green light for its shipment to the final consumer.

Difficulties of the Ecommerce to find specialized personnel. The Brexit will imply a flight of talent to other European and international countries, so, in addition to all the above, e-commerce companies may find it difficult to hire talent and qualified personnel, which, after all, could be translated in a serious loss of profits for companies. The departure of the United Kingdom from the European Union implies that foreign persons will be required to have special visas to work in the territory, so that the selection processes may be extended, become more expensive and become impossible.

Lack of consumer confidence. By not being part of the European Union and, therefore, not fulfilling their products and services with the same regulation or requirements as the European ones (Trusted Shops seal), a decrease in the confidence of foreign consumers in products and services may be perceived. services marketed from countries that are part of the United Kingdom. “In addition, consumers may feel distrustful of the fact that the UK will not be governed by the same legislation regarding personal data protection, which presumably will not ensure that private information will continue to be so,” concludes Hyland.

At Hyland Shipping we have been transporting merchandise of users and companies by land, sea and air from Ireland to European Union countries and Turkey, and vice versa for more than 35 years. Now, more than ever, we can help you overcome the obstacles of Brexit so that your Ecommerce does not suffer. Do you want to know our services? Contact us without obligation.

Leave a Reply

Your email address will not be published.