E-commerce: should it be regulated? - Trustpilot

 E-commerce: should it be regulated?

Understanding what e-commerce means is more than just selling goods online. While brick and mortar retail still accounts for the largest share of total trade, e-commerce - both business to company (B2B) and company to consumer (B2C) - has grown significantly in recent years, particularly in - border areas. . Situation. A report by international logistics company DHL indicates that this market may exceed $ 1 trillion in 2020, accounting for 22% of all global e-commerce.

The economic effects of this movement are becoming more apparent. You only need to look at the market value and projected sales growth of companies like Amazon and Alibaba, as well as malls boosting platforms like Facebook and Google (Google Shopping), to understand why problems with e-commerce are more and more common. More space. In international trade discussions.

Consolidation of the global e-commerce market is becoming an increasingly important challenge for local or new companies looking to compete with superstars such as Amazon. Explains winner-takes-all logic of major retailers' defensive mergers and acquisitions. In reality, this is no longer a struggle for niche markets, but a search for survival. After all, there are already signs that the supply platforms will take care of almost everything a consumer needs and wants to buy. As a result, the only way for local retailers, especially small and medium-sized stores, is to sell on these huge platforms or markets, and to comply with the rules of the game and enforce the platforms (there is something more important here, which is for the platform to collect and use all the data arising from the relationship between Consumer and Seller - but this will be the subject of another post).

Despite the fact that negotiations were at a standstill, the Trans-Pacific Partnership Treaty (TPP) was helpful in revealing that e-commerce is one of the new battlegrounds in global trade. Basically, TPP was intended to set the direction of the digital economy by defining rules and procedures, including e-commerce in goods and services, as well as topics such as standards, rules and definitions for digital products, server locations, source codes, etc. All of this is seen as a "barrier" to the markets of digital e-commerce giants. Consequently, the TPP will have surprising implications for signatories and non-signatories, particularly in terms of the policy space for services and e-commerce. Although the Trans-Pacific Partnership is currently paralyzed, it has become a source of inspiration and a springboard for new business negotiations.

Developing countries need to pay attention to these terms, as engaging in e-commerce agreements, without a rigorous internal discussion about where we want to go and what to do, can hinder this sector even in the medium future. And long-term economic growth. The case for Chile is symbolic: the country's retail business is already dominated by the world's e-commerce giants.

There are already successful players in the race for the e-commerce space, but they have different strategies. China has effectively shut down the e-commerce market for US companies like Google and Facebook, and has restricted Amazon's activity to selling the goods it has in its own warehouses, preventing it from exploiting the super-powerful arms market. Thus, China paved the way for emerging giants such as Alibaba, JD.com and Weibo, which today have a global perspective and collectively are much larger than Amazon. China realized it lagged behind in a critical sector and used protectionist tools to grow its nascent digital industry. For foreign companies that can operate in China, all data must be stored on servers located there.

On the one hand, the United States is committed to encouraging widespread liberalization and deregulation of the global digital marketplace given that nearly all of the major global digital platforms, except for China, are American, as are the e-commerce giants with the largest presence in the West.

Europeans, aware of the network and platform impacts in the digital world and in e-commerce, and fearing the consequences of delays in introducing these technologies, also play an important role in trade negotiations with less developed regions in favor of liberalizing labor markets and services, including e-commerce, for the benefit of their companies. Competition and consumer welfare may not be the only reason behind the recent billion-dollar antitrust fines against Microsoft and Google.

The United States and China are two extremes. Brazil is not a leading country in the digital realm, so too liberal or extreme protectionist programs must be approached with caution. But Brazil cannot hide and defend incompetence, or it will repeat the well-known mistakes of the past that helped us come here. Perhaps the smarter option would be to develop a strategy that leads international digital economy operators to create operating bases in Brazil (with servers and open source) and form national digital clusters with local partners.

This discussion should also take into account that retail is by far the most employed sector in Brazil, especially low-skilled people, and also one of the sectors that brings together the most ICMS. Consequently, the potential expansion of international e-commerce in a country will not have neutral social or financial implications, including affecting tax payments and social security benefits.

The national strategy for the integration of Brazil into the global digital economy should include measures in at least three areas: internal regulation of e-commerce; Building "opportunity"; And an international inclusion.

The internal organization of e-commerce should be based on the assumption that it is not just a remote selling channel, as modern technology allows you to buy and sell experiences fully or more than it is in the real world. This has implications for consumer rights, economic law (in particular, competition protection), taxation, and more. In addition, the Marco Civil da Internet and all its bases must be viewed from the perspective of economic development as well as issues of democracy and freedom of expression. Even the transportation infrastructure and warehouse and their regulations must be adapted to meet the growing demand for fast deliveries, high performance capacity and international expectations. We also need to simplify laws and regulations. However, some recent initiatives require attention. An example of this is a law suspended by an STF court order requiring online retailers to group ICMS into two states for cross-border transactions.

Creating opportunities is an especially important topic. Despite the trend towards consolidation in e-retail, there is still room for market growth, particularly in niches. FedEx analysis shows that mid-sized ecommerce sectors are growing faster than mainstream. This is due to the ability to provide online sales and services with greater customization and specialization. This is clearly part of a corporate culture in which the government contribution opportunity focuses on business environment policies, innovation incentives, and human capital, which includes literacy, communication, learning programming languages, machine learning, and digital technology.

Finally, the international supplement should be the beacon guiding the previous two pillars. For this, the country needs to rapidly develop its plans to open up trade, including with the aim of invading foreign markets. It would be a mistake to keep the economy shut down. Accelerating the opening of a digital market without a strategic plan would be another mistake.

But one thing is clear: Brazil is far behind the digital economy agenda, and it is a veritable war of thrones in the 21st century. While the present moment is one of the structural reforms that stabilize and reorganize the economy, it is imperative to clearly understand the context and propose public policies that reflect the economic boundaries of the future. We cannot wait for the government or the market itself to provide solutions that will cease to exist in this complex new world. They just won't show up.