Around 130,000 UK businesses now sell online, in a market
representing about 2.5% of all household spending (over £18 billion
a year in total), according to Government figures. In the last five
years, internet retail sales in the UK rose by over 350%, compared
with growth of only 20% for all retail sales. In 2005, the typical
online shopper spent £560 online, and forecasts suggest that this
could grow to over £860 per year by 2010. Other research has,
however, also identified consumer concerns when shopping online
about security of payment, or potential problems with
delivery.
The OFT has taken some action to protect consumers on the
internet in the past. Recently it acted to ensure that the major
supermarket chains provide clearer information about online pricing
of products. It has also worked with businesses to address consumer
concerns about delivery and cancellation rights, obtaining
agreements guaranteeing that Amazon.co.uk and BOL.com include
delivery charges in refunds.
The OFT also actively promotes self-regulation by online and
offline traders, particularly through its Consumer Codes Approval
Scheme. SafeBuy, a code of practice for web-based retailers, has
recently completed Stage One of the two-stage approval process.
The new study will examine whether:
- consumers are confident when shopping on the internet;
- consumers receive the right level of regulatory
protection;
- consumers are aware of their rights when shopping online;
and
- businesses understand and comply with the regulations for
online shopping.
The study will concentrate on four representative 'case study'
sectors: domestic electrical goods, music sales (including
downloads), airline ticket sales (including accommodation bought at
the same time), and online auctions.
The OFT says these sectors have been chosen because they
represent at least a third of all online spending and are good
examples of the internet as a growing and developing marketplace.
It is also anticipated that these sectors will provide useful
lessons to apply to other areas of internet shopping.
Market studies such as this are performed under the Enterprise
Act of 2002. The OFT will make contact with businesses and other
stakeholders, to hear their views, but it stressed that the purpose
of the study is to conduct exploratory research, not to investigate
particular companies.
The OFT expects to publish its findings in spring 2007.
