When buying online, Maltese prefer to buy from foreign merchants rather than Maltese ones. The Malta Communications Authority has launched the National eCommerce Strategy to support the take-up of eCommerce and the provision of eCommerce-related services.
On Thursday, October 16, the Malta Communications Authority presented the National eCommerce Strategy 2014-2020 at the annual eCommerce Forum held at the InterContinental Malta, St Julian’s. The Parliamentary Secretary for Competitiveness and Economic Growth, Josè Herrera, presided over the launch.
The strategy aims to support the take-up of eCommerce and the provision of eCommerce-related services by local businesses which is still low compared to the rest of the EU. At the same time the strategy also addresses the prospects for Malta to attract foreign companies providing eCommerce or ancillary services to establish operations locally.
The result of consultation with key stakeholders, the eCommerce Strategy proposes programmes and actions framed within four main pillars: engendering trust in eCommerce to grow the demand side; transforming micro-enterprises to face the challenges resulting from the widespread adoption of eCommerce in Malta; taking SMEs and industry to grow beyond the local market and capitalise on the latest technology to penetrate foreign and niche markets; and making Malta a global eCommerce player.
The MCA’s eCommerce Forum also launched Blink, a new online directory service for eCommerce, presented the results of a survey on the use of eCommerce by individuals, and also discussed VAT treatment of electronically supplied services.
Blink is one of the actions resulting from the consultations held prior to the drafting of the eCommerce Strategy. This comprehensive online directory provides local businesses easy access to a list of entities that supply the products and services required to set up and manage an online business. It also aims to support businesses in going through each step needed to launch an online store.
Local enterprises offering products and services for start-ups or established businesses that would like to deploy an online store, are invited to apply and get listed in the directory. This process is voluntary, quick and free of charge.
At the eCommerce Forum, MCA also presented its 2014 edition of the Internet and eCommerce Use by Individuals study. The objectives of the ninth study in this series are to gauge the growth of eCommerce use in Malta and Gozo and compare the results to previous editions.
The study established that 54 per cent of all respondents (including those who don’t use internet) engage in eCommerce, up from 51 per cent in 2010 and 30 per cent in 2008. Indeed, the majority (55 per cent) of those who use internet have bought something online in the previous three months. Only 25 per cent have never bought anything or commissioned others to buy for them, despite the fact that they go online.
The frequency of purchases is also significant, with 28 per cent buying online at least once a month and 34 per cent buying at least once every three months. Compared to previous years, the frequency has gone up especially for monthly buying.
The main reason given for not buying online is that the user is not interested or doesn’t feel the need to do so (32 per cent), followed by lack of knowledge on how to do it (26 per cent) and a preference to see and try an item before buying (22 per cent). Security doesn’t seem to be an issue. In the 2010 edition of this survey, preference to try out the products and security were the two most important issues.
The biggest spenders are in the 18-29 year age bracket with 97 per cent. These are followed by other age groups which progressively report a decrease as the age goes up. In fact, only 40 per cent of those aged 66 years and over buy online.
In terms of the amount spent, the majority (55 per cent) spend up to €500 a year, while 25 per cent spend up to €1,000 a year, 12 per cent up to €2,000 a year and six per cent spend more than €2,000 a year.
The survey confirmed the trends and the need for action highlighted in the National eCommerce Strategy, for the Maltese would rather buy from foreign than from Maltese merchants. The most popular country of origin for their goods is the UK with 91 per cent, followed by China (China and Hong Kong combined) with 44 per cent, Malta with just 34 per cent, and the USA with 24 per cent. Other EU countries follow with lower percentages. The most popular foreign merchants are eBay, Amazon, Sports Direct, Asos, Play.com and Book Depository.
The most popular items bought from foreign websites are clothes and shoes (63 per cent), IT and electronic goods (45 per cent), books (35 per cent), and flight tickets (28 per cent). The nature of the items changes for goods and services purchased from Maltese websites. In this case the most popular are flight tickets (35 per cent), books/CD/DVD (23 per cent), booked service/appointment (11 per cent) and IT electronic goods (10 per cent). The most popular online merchants are, in order of ranking, Air Malta, Maltapark, Agenda, OOII, Maltasupermarket, Ticketline, BLD and Scan. The reasons given for not buying from local websites are no need to (36 per cent), prices are not as competitive as those on foreign sites (32 per cent), and limited choice (30 per cent).
Price and shipping fees remain the most important factors in the choice of buying from one rather than from another website. Positive reviews about the retailer and products, a good product description and security features of the website come next. Potential shoppers like websites that have good search facilities to find what they want, are user-friendly and have good site navigation. Pay Pal has supplanted the credit card as the preferred method of payment (80 per cent versus 44 per cent).
The eCommerce Forum also discussed issues related to indirect taxation of electronically supplied services. Robert Attard from EY explained the challenges of how taxation may be applied according to OECD and EU regulations, the latter changing the rules affecting the place of supply as from January 1, 2015.
The National eCommerce Strategy 2014-2020 is available at www.mca.org.mt. For more information about Blink, visit www.mca.org.mt/blink.