UK online shopping to be probed by OFT
Published April 28th, 2006
Around 130,000 UK businesses now sell online, in a market representing about 2.5 percent of all household spending (over £18 billion a year in total). In the last five years, internet retail sales in the UK rose by over 350 percent, compared with growth of only 20 percent 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 study will explore consumer confidence in this area and, in particular, whether the current consumer protection regime meets any new challenges raised by this mode of selling. It 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. These sectors have been chosen because they represent at least a third of all online spending (see note 6) 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.
Throughout the course of the study the OFT will consult widely with businesses, trade bodies, consumer groups and public sector organisations. It will also research consumer and business perceptions and needs, enforcement practice, and consider international experience in this area.
John Fingleton, Chief Executive of the OFT, said:
‘The Internet is fast becoming a hugely important channel for consumers and businesses. Its rapid evolution means that we need to ensure that the consumer protection regime gives current and future users the confidence to realise the internet’s potential for shopping. This study is core to the OFT’s mission to make markets work well for consumers. The OFT is committed to looking proactively at identifying and addressing new and future challenges, so as to ensure that consumers and the economy benefit from the innovation and choice that the internet can offer.’
Related Articles
