{"id":860,"date":"2016-06-22T00:00:00","date_gmt":"2016-06-22T00:00:00","guid":{"rendered":"https:\/\/www.motionpoint.com\/?post_type=blog&p=860"},"modified":"2016-06-22T00:00:00","modified_gmt":"2016-06-22T00:00:00","slug":"this-content-is-not-available-in-your-country","status":"publish","type":"blog","link":"https:\/\/www.motionpoint.com\/blog\/this-content-is-not-available-in-your-country\/","title":{"rendered":"Can European Companies Thrive Without Geo-Blocking?"},"template":"","blog_categories":[7,5],"resource_categories":[],"targeted_localized_audience":[],"document_categories":[],"class_list":["post-860","blog","type-blog","status-publish","hentry","blog_categories-international-business-strategies-europe","blog_categories-international-business-strategies"],"acf":{"blog_short_description":"The European Commission has declared war on geo-blocking. But is the practice as anticompetitive as the group says?","news_inline_styles":"","blog_video_id":"","article_body":"

The European Commission recently issued a proposal to ban geo-blocking<\/a>, a common online practice in which companies limit access to their international websites based on a user\u2019s geographic location. This prevents consumers from buying products and services in other countries, where they might have lower prices.<\/p>\n

One of the best-known examples of this price discrimination is the \u201cAustralia Tax.\u201d In Australia, local prices on some products can be as much as 88% higher<\/a> than in other markets.<\/p>\n

The Commission, which is the executive body<\/a> of the European Union, decried the practice as anticompetitive, particularly within the EU. \u201cIn the online world, all too often consumers are blocked from accessing offers in other countries,\u201d it said in a statement. \u201cSuch discrimination has no place in the single market.\u201d<\/p>\n

According to a 2015 survey<\/a> conducted by the Commission, more than 60% of EU-based retail websites geo-block customers. Nearly half of those sites provided no upfront information about the companies\u2019 delivery restrictions, or other geo-based restrictions.<\/p>\n

At its simplest, the Commission\u2019s recent proposal would prevent geo-blocking, optimize cross-border parcel delivery, and reduce discrimination of regionally-preferred payment methods.<\/p>\n

Most consumers understandably bristle at geo-blocking. So do consumer advocates. \u201cWe are now living in a global village that\u2019s supposed to resemble a level playing field\u2014a single digital market would empower businesses and boost growth in the global economy,\u201d wrote one technology blog<\/a>. <\/p>\n

But is the practice as anticompetitive as the Commission insists? We recently spoke with Francesco Rocchi, a Global Online Strategist with our Global Growth team, to learn more.<\/p>\n

It\u2019s About Money<\/h2>\n<\/p>\n

An EU without geo-blocking would certainly create growth in the region. Nearly 70%<\/a> of EU-based Internet users now shop online. In 2014, online commerce in the EU was worth \u20ac368 billion<\/a> ($414 billion). And while domestic e-commerce will grow by around 14% in the next two years, cross-border revenue will surge by 40%<\/a>\u2014a projection that doesn\u2019t factor the Commission\u2019s proposal, should it successfully pass. (Approval is projected to happen next year.) One-fourth of respondents to an Accenture study<\/a> believed that they could grow revenues by at least 25% if they could sell online and cross-border in Europe. Some are already shifting \u201cto a more offensive position aimed at tackling the cross-border challenge in Europe,\u201d the report found.<\/p>\n

With over 90%<\/a> of EU consumers supporting \u201csingle market\u201d cross-border e-commerce and retailers also warming to the notion, why is geo-blocking still so common in the region? <\/p>\n

It\u2019s all about companies obtaining the maximum possible margins in their respective markets, Francesco explains.<\/p>\n

\u201cLet\u2019s say a retailer offers a particular product on its Dutch e-commerce site for \u20ac50,\u201d he says. \u201cAnd now let\u2019s say the same retailer offers the same product for \u20ac30 on its website serving Poland. The price is lower due to several economic factors. But Dutch customers understandably want to save money and buy from the Polish site\u2014but if that happens, the retailer will lose \u20ac20 on each Dutch sale.\u201d<\/p>\n

Hence, geo-blocking. Even when Dutch customers try to access the Polish site directly, they will be sent to the retailer\u2019s Dutch site via a \u201chard redirect.\u201d Profits are preserved.<\/p>\n

A Win-Win Scenario<\/h2>\n

Francesco sees a way that businesses can maintain control over their local-market pricing, while eliminating geo-blocking and serving all EU consumers.<\/p>\n

\u201cA company serving multiple European markets is clearly interested in channeling consumers to the optimal versions of its website,\u201d he says. \u201cAnd by \u2018optimal,\u2019 I mean not only the appropriate site that maximizes their margins, but also provides products that are most relevant to those shoppers.\u201d<\/p>\n

For instance, take a grocery e-retailer, Francesco says. Italian customers will be probably interested in seeing homepage deals on spaghetti, while German customers will probably prefer seeing specials on pretzels. All consumers will prefer seeing this content in their languages of choice.<\/p>\n

However, the Commission\u2019s proposal does not prevent market-specific price discrimination (or \u201cprice localization,\u201d as we call it), Francesco says. \u201cThey\u2019re proposing that customers receive unfettered access to a company\u2019s websites serving nearby markets,\u201d he explains. \u201cBut retailers can still use geo-targeting to display a price that\u2019s appropriate to foreign shoppers.\u201d<\/p>\n

This ensures the playing field remains level for businesses across multiple markets, while consumers are empowered to conduct cross-border transactions, in their preferred languages, if they wish. It\u2019s a win-win.<\/p>\n

\u201cIf a company can drive a high percentage of their customers to the desired local version of a site, it will greatly benefit in terms of conversion rate,\u201d Francesco says, \u201csince people prefer to shop and purchase in their language of choice. Average margins and returning traffic are likely to increase, too.\u201d<\/p>\n

The Consumer-Friendly Path<\/h2>\n

Companies can achieve this consumer-friendly shopping experience through several key initiatives, Francesco says:<\/p>\n

    \n
  1. Offering market-specific versions of their websites<\/b> in locally-preferred languages, to boost traffic, engagement and conversions <\/li>\n
  2. Generating organic traffic to the appropriate market website<\/b>, through translated site maps, and the proper linguistic \u201chreflang\u201d tagging for search engines <\/li>\n
  3. Providing \u201csoft redirection\u201d opportunities<\/b> to direct customers to the appropriate local website (rather than the alienating hard redirects currently in use) <\/li>\n
  4. Optimizing the user experience on the localized website<\/b>, to incentivize customers to remain on-site. (\u201cThis can be achieved through localized campaigns, content, inventory, and more,\u201d Francesco says.) <\/li>\n<\/ol>\n

    MotionPoint\u2019s Globalization Platform<\/a> offers a suite of technologies to help companies deploy these improvements, Francesco says.<\/p>\n<\/p>\n

    From scalable translation solutions, to traffic-boosting Global Sitemap technologies, to \u201csoft redirection\u201d solutions such as EasyLink\u00ae and more, MotionPoint\u2019s platform empowers companies to smartly increase cross-border traffic and sales in the EU\u2014and beyond.<\/p>\n","article_body_code":"","news_image":{"ID":8604,"id":8604,"title":"Hero_Geo-Blocking-100.jpg","filename":"Hero_Geo-Blocking-100.jpg","filesize":165171,"url":"https:\/\/www.motionpoint.com\/wp-content\/uploads\/Hero_Geo-Blocking-100.jpg","link":"https:\/\/www.motionpoint.com\/blog\/this-content-is-not-available-in-your-country\/hero_geo-blocking-100\/","alt":"","author":"2","description":" \t","caption":"","name":"hero_geo-blocking-100","status":"inherit","uploaded_to":860,"date":"2016-06-22 00:00:00","modified":"2016-06-22 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