Swiss online retailer study 2019 Customs duties hinder exports from Swiss online retailers
The online retailer survey conducted by the Zurich University of Applied Sciences shows that customs duties are the biggest obstacle to exporting for Swiss e-commerce, followed by logistics and high costs in general. The market, marketing and data also pose major challenges for online shops.
As ever more parcels stream into Switzerland from foreign online retailers such as Wish, AliExpress, Zalando and Amazon, Swiss online shops are finding it harder to export. Three quarters of Swiss online retailers sell their goods predominantly in Switzerland and would like to export more. But increasing protectionism, high import/export duties and complicated customs clearance are making their lives difficult. This is the outcome of a representative study by the Institute for Marketing Management at ZHAW that surveyed over 300 Swiss online shops. Costly shipping and logistics, high costs in Switzerland, foreign laws and the strong franc are further major export barriers (see figure 1 on the right). The market situation abroad and taxes (such as value-added taxes) are also discouraging most domestic retailers from increasing their exports.
The market and marketing are the greatest challenges
Competition in the market is intensifying in general, and price and competitive pressure in most online retail sectors is high. Marketing, too, is one of the largest challenges faced by Swiss e-commerce: as marketing budgets are squeezed, it is becoming ever more difficult and expensive to achieve a high penetration rate and corresponding sales. Also on the increase is dynamism – the number and complexity of the digital marketing tools in use, such as search machine marketing (primarily Google Ads), newsletters, content marketing, social media marketing (mainly Facebook and Instagram ads), display advertising, re-targeting, video and influencer marketing.
Data and technology present problems, especially for SMEs
In third place on the “Swiss e-commerce worry barometer” in figure 2 is data. Data management and data integration are obviously providing challenges for online retailers, especially small and medium-sized companies, as is technology, including IT infrastructure, online shop systems and other software solutions.
Organization and logistics, such as parcel delivery and returns, pose a high to medium-level challenge for over a third of surveyed companies. Warehousing (e.g. storage space, costs), customer service (e.g. support, complaints), manufacturing and payment seem to be less of a challenge for most.
Reducing export hurdles and developing solutions
Despite online sales of most product ranges increasing each year, success in online retail is by no means guaranteed. For Swiss retail to grow further, customs duties and other export barriers will need to be reduced. Domestic and international politics need to stop putting obstacles in the way of the digital economy and instead promote entrepreneurship and start-ups.
Online shop operators would do well to develop new e-commerce strategies, establish new forms of distribution, look at the possibility of solutions with partners and acquire further expertise.
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