The economic opportunity from accessing online selling in the EU’s peripheral areas

Firms in the EU’s peripheral regions face several challenges compared to firms in urban regions. Smaller addressable market size and customer base, weaker infrastructure, and lower innovation rates are a few examples of such challenges, which all translate into an overarching challenge of socio-economic cohesion in the EU.

However, when it comes to technological readiness, the peripheral regions are not far behind the urban economic centres. Thus, selling products online offers a valuable business opportunity for firms located in the EU’s peripheral regions. This has become even more important as economic activity increasingly has concentrated in the urban regions of the EU.

In the spring of 2020, the EU Commission’s DG GROW opened a process of evaluating the EU Postal Services Directive, an important regulatory framework for national postal operators in the EU. Against this background, this study analyses three relevant research questions for e-commerce and postal sector business and policy decision-makers:

• What is the value of B2C e-commerce from peripheral regions in the EU?
• How much of this value is supported by the EU postal networks?
• How much of it is exported to other countries, thereby supporting further social cohesion and growth in peripheral areas?

The main conclusions of our study are:

• Firms located in peripheral areas of the EU that sell products online to final consumers – e-sellers in peripheral regions – generate online revenues of an estimated EUR 110 billion that support approximately 300 thousand jobs in EU peripheral regions. The online revenue generated represents approximately 2 per cent of EU peripheral GDP. As retail is a key sector in the economy and is increasingly going digital, this number can be expected to rise in the future. In fact, our research reveals that revenue and employment growth of e-sellers in peripheral regions have in recent years outpaced that of the general economy, by 59 and 24 per cent, respectively.
• Approximately 75 per cent of peripheral e-sellers’ online revenue is generated by sales to customers based outside the local region and, in total, e-sellers in EU peripheral areas export products for a value of approximately EUR 11 billion to other countries. Out of this, 70 per cent is intra-EU exports and 30 per cent is extra-EU exports. This confirms the key role that digital tools play in furthering the achievement of the Single Market – a key EU political objective.
• Approximately 40 per cent of the value of products sold online by e-sellers in peripheral regions are shipped by the national postal operators. In 2019, the EU postal operators thus shipped an estimated EUR 45 billion worth of products. This corresponds to over 110 thousand jobs in the EU’s peripheral regions supported by online retail activity via the postal channel.

The study is commissioned by Amazon.