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Law never goes out of style! The legal aspects of the fashion industry and the workings of e-commerce in Europe

 

E-commerce plays a vital role in the retail trade, and the enormous growth of online shopping is evident for most product categories in all European regions. It has a serious edge over traditional commerce since it is not limited to a certain territory, and therefore can reach a wider circle of potential customers. 
At the same time, e-commerce is connected to certain threats, especially connected to the fact that customers cannot really check out a product and verify its characteristics before they purchase it. Moreover, marketing activities undertaken by e-commerce stores often involve the latest technologies, which could threaten internet users’ data privacy and security. 
These issues, combined with the growing size of e-commerce, prompted both EU and Polish legislators to introduce legal measures, which would protect consumers. Therefore, when you start an e-commerce venture, you must think about particular legal solutions, which are not present in traditional commerce. 
The very nature of e-commerce requires different regulations because of numerous conditions: in the offline world, we can look at a product before we purchase it, and have direct contact with a seller, whereas online, it is not possible, and we have to resort to distance contracts. If our business is digital, we also process much more information than traditional stores do. Such conditions require that we have knowledge of basic legal acts, which are described in this article since they regulate e-commerce and responsibilities, connected to it. 
The legal basis, which hugely regulates e-commerce is the Act of 30th May 2014 on Consumer Rights, which went into force on 25th December 2014. The Act imposes on the e-commerce store owners different obligations, such as 
 
  1. The obligation to provide information - all information about the rights and obligations of customers should be expressed in a clear and direct manner at the latest at the moment when there is a proposal to start a distance contract, so it should be posted on the store’s website.
  2. The obligation to confirm the conclusion of the contract - a customer should receive a confirmation of a concluded contract on a durable medium (for example, e-mail) at the right time, but at the latest at the moment, when an order is delivered 
  3. The necessity to make changes in the shopping process - a customer must agree to every extra payment, at the latest at the moment, when they voice a willingness to start a contract. Additionally, a seller must give a customer the technical possibility of confirming that they are aware of a legal obligation to pay for an order they place. It can be done via a special button with a phrase: “I order with the obligation to pay”.
  4. Extension of the withdrawal period - a consumer has the right to withdraw from a distance contract within 14 days with the use of an appropriate form (a template form provided in the Act). If the consumer is not informed about such a possibility, the withdrawal period is extended to 12 months.

As of January 1, 2021, a new consumer law came into force, and it will revolutionize the entire e-commerce sector. Under the new regulations, about 3 million one-person businesses will gain consumer rights that will allow them to return goods purchased online under the same conditions as private individuals. Extending the protection, which typically was granted only to customers, to some entrepreneurs will impose on e-stores additional obligations related to verification of agreements and their connection to customers’ professional activities.

The obligations introduced by GDPR are also very important for an e-store, e.g:
 
  1. Collecting consents - the Administrator is obliged to collect consents, which should be given consciously, so their content should be clear to users. The user should always be informed how their personal data will be processed, by whom, and for what purpose.
  2. The obligation to obtain separate consent for profiling - i.e. for collecting data about the user (e.g. his/her behavior on the website, purchases, and location) and doing customer segmentation on the basis of collected data (e.g. for remarketing purposes).
  3. The obligation to keep a register - an administrator is obliged to keep a register of personal data processing activities (of other administrators,  the data processing purposes, security measures, and systems in use, etc.).
  4. Obligation to report a personal data breach - The Personal Data Controller has 72 hours to report an incident to the supervisory authority.
  5. Transfer of data outside the EU - when transferring data outside the EU, a specific level of security must be guaranteed for the data transfer and data processing (it has to be in line with GDPR). This is one of the more controversial points, as big advertisers, such as Google and Facebook, have their servers outside the EU. 
  6. Penalties - introducing the possibility of penalty upon non-compliance with the regulations (up to 4% of the company's annual turnover or €20 million).
 
E-commerce is growing dynamically almost all over the world, which allows making up for low store sales of closed shopping malls. The report summarizes this year's most important changes and trends, assesses the main industry players - including financial institutions, whose participation was essential for such a rapid development of e-commerce, and focuses on the main forecasts for the most important markets for e-commerce:
  • Europe, including Poland,
  • The United States and America,
  • Asian markets, with a particular focus on China, which is the largest e-commerce market in the world. Chinese export policies also impact most other e-commerce markets. The value of e-commerce in China exceeds $2 trillion, accounting for more than half of the world's online turnover.
 
Market research shows that 2/3 of Europeans shop online more frequently than before the pandemic, and many of them declare that they will continue to do so after the pandemic.
The market segment with the highest growth in online shopping is food products. The global sales of grocery goods from online stores and restaurants will reach 136 billion dollars in 2020. Food e-shopping is set to grow by 25% annually for the next few years. An increasing share of global online sales (50-85% of sales, depending on the market) is conducted through digital platforms owned by digital giants such as Aliexpress, JD.com, Amazon, Rakuten, Mercado Libre. Cross-border e-commerce - purchases on foreign e-commerce platforms - is also on the rise; the EU law changing in July 2021 will significantly impact this segment. When it comes to payment methods, digital wallets, which are the most modern solutions, record the highest growth, and customers using them make purchases of higher value.
 
This year, Poland is one of the fastest-growing e-commerce markets in Europe.
Over the last four years, the average annual growth of e-commerce in Poland exceeded 20%, while in the EU, the numbers were slightly lower. According to forecasts, the pace of e-commerce growth is expected to exceed 30% this year, which will translate into revenues of about 15 billion euro. The slowest-growing markets in terms of online sales growth were: Iceland - 3%, Austria - 4%, Ireland and Belgium - 7%.
The world of e-commerce is growing at a staggering pace, and tracking information has never been more important. It is clear that data is the best way to understand what customers want, but it is equally important to use it to retain current loyal customers.
As e-commerce is growing, competition between retailers will only increase. Those who will thrive are those who can manage data best. 
 
Sources: 
 
 
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