Trust encourages e-shopping

Technology has transformed the way we celebrate Christmas, from the nature of presents we buy to the way we go about acquiring them. Reports from abroad say that despite the international economic problems, this was a very good festive season for online shopping, and year on year people continue to spend more money online.

What’s the situation in Malta? According to an e-commerce survey commissioned by the Malta Communications Authority in September 2010, 51 per cent of Maltese shop online and research for information online. The most popular items bought online are clothing, electronics and computer hardware, books, DVD, flights and hotel accommodation. The nature of items purchased from Maltese websites changes in nature, as air tickets (from Air Malta), concert and event tickets, and books are the most sought after online.

The majority of online shoppers think prices on internet are cheaper and it’s easy and more convenient to shop online.

PayPal is the most preferred method of payment as it is deemed secure. Indeed the biggest concern for these shoppers is not fraud but delays on delivery and items not delivered.

However there is still a significant number, 44 per cent, who think it’s more risky than buying from physical shops. The reasons given for not buying online are that people prefer to try out items before buying and they are concerned about security.

With a view to addressing the trust issue and thereby increasing confidence in online purchasing, a few weeks ago the MCA launched a new trust mark for local e-commerce sites – the “eShop” trustmark.

The authority said this trustmark will be awarded to those sites which are fully compliant with legal obligations and which adhere to a code of practice. The code of practice has been specifically designed to ensure that compliant sites provide consumers with all the information they need to make a purchase and feel confident that they will get what they pay for and that their rights will be fully respected.

A second trustmark – the “eInfo” trustmark, is also available for sites that do not allow online purchase, but offer information regarding products or services that are available from brick and mortar outlets. This is an interesting concept which allows entrepreneurs who are taking the first steps in using this medium to start off on the right track.

These two new trustmarks update the original label launched in Malta in 2007.

“Not only has online shopping increased in general terms, but our latest statistics show that there has been a marked increase in online shopping from local sites, coupled with increased spending,” explained an MCA spokesman told i-Tech.

“The authority is very keen to drive the take-up of an e-commerce trust mark by local online service providers as it considers this tool an important self-regulatory measure which can serve to improve the level of compliance with best practice in online operations, thereby engendering consumer trust in local online shopping. Moreover, the authority believes that the trustmark can also be used as a vehicle to facilitate the transition from information based online services to transaction based online services and hence the introduction of the eInfo trustmark. We believe that the commercial success of any online business largely depends on the soundness of the business model adopted and the manner in which the activity is marketed.

“In addition, since online transactions are carried out among parties that have never met before and may have little or no idea about each other’s reliability, trust becomes a determining factor which cannot be ignored. The eShop and eInfo trustmarks are intended to build trust in websites awarded the trust marks.”

Since online shopping is by nature a cross-border phenomenon, Malta has to move with current trends, especially within the framework of the EU. The MCA, being Malta’s regulatory body for e-commerce and recognised as such by the EU, has to keep abreast of developments.

“Consumers, local and foreign, will be reassured that traders bearing the eShop and the eInfo trustmarks have safe commercial procedures, valid all over Europe, in line with the e-Commerce Directive, the Distance Selling Directive and the Data Protection Directive. We believe that the fact that the trustmark is operated by the national supervisory body for e-commerce provides additional weight to the trust marks since they are not operated on a commercial basis.

“It is worth noting that the European Parliament’s resolution of September 2010 on completing the internal market for e-commerce calls for the introduction of a new Europe-wide trustmark scheme with the aim of boosting consumer confidence and encouraging cross-border trade across Europe. Therefore, we believe that these trustmarks will provide the stepping stones for local businesses to align their online business with the relevant legislation and hence making it easier for them to join a future European e-commerce trustmark,” said the MCA spokesman.

Traders who are interested in applying for the trustmarks will find all relevant information on http://eshop.mca.org.mt .

But what are the local traders actually doing online? What’s the view of Maltese e-shops on the challenges and opportunities they are facing? i-Tech will present these insights in the second part of this article on e-commerce in Malta.