The eCommerce Innovation Lab (EIL) is a national office within the United States that positions the U.S. Commercial Service as a pacesetting resource for U.S. businesses through empowering client-facing staff with a baseline understanding of digital trade, enabling quicker response to client needs by providing value-added digital client counseling. This helps ITA to adapt alongside industry in remaining ahead of the curve on client service, trade promotion, and trade policy development through more knowledgeable and effective collaboration.
EIL has created a U.S. field-based client digital strategy counseling process that focuses on these key concepts:
- eCommerce is a sales channel crossing all industries that sell or promote brand awareness online. eCommerce as a sales channel is part of a businesses’ B2B and/or B2C digital strategy;
- A digital strategy addresses the basic needs of a business required to succeed in cross-border ecommerce sales channels. Our counseling process focuses on identifying these needs;
- eCommerce Key Performance Indicators allows businesses to understand where their digital efforts are paying off;
- eCommerce Business Service Provider Directory (BSP) provides much needed follow-up to our digital strategy recommendations that will help the client to succeed in overseas markets
Assessment of Current Buyer Behavior in Market
Online sales of consumer goods have grown substantially in Slovenia in recent years, as has the use of credit cards for in-person and online transactions. Approximately 90 percent of Slovenians aged 10-74, as well as almost all companies with ten or more employees, have broadband internet access. According to recent statistics, more than 54 percent of Slovenian internet users make monthly web purchases, while the average amount per purchase has doubled. Net eCommerce sales in Slovenia in 2020 exceeded 440 million USD. Net eCommerce sales growth in the past three years was 50 percent. ECommerce growth has been most pronounced in the food and beverage, automotive, toys, and pet food and product markets. 76 percent of websites in Slovenia have developed online versions of their webpages optimized for mobile devices.
Local eCommerce Sales Rules & Regulations
The EU’s Electronic Commerce Directive (2000/31/EC) establishes rules for online services throughout the EU. The Directive requires providers to abide by the relevant rules and regulations in the country in which they are established. Online providers must respect consumer protection rules such as including contact details on websites, clearly identifying advertising, and protecting against spam. The Directive also exempts companies from legal liability for unknowingly hosting illegal content or when third-party intermediaries transmit illegal content. In 2012, the European Commission issued its work plan to facilitate cross-border online services and reduce barriers.
In 2003, the EU began applying Value Added Tax (VAT) to sales of Electronically Supplied Services (ESS) by non-EU based companies to EU-based non-business customers. U.S. companies subject to the rule must collect and submit VAT to EU tax authorities. European Council Directive 2002/38/EC offered additional guidance on EU rules for charging VAT. These rules were extended indefinitely following the adoption of Directive 2008/8/EC.
U.S. businesses affected by the 2003 rule change are primarily those based in the United States and selling ESS to EU-based, non-business customers or to businesses that are EU-based and selling ESS to customers outside the EU who no longer need to charge VAT on these transactions. Such businesses have a number of compliance options. The Directive established a special scheme simplifying registration with each member state and allowed companies to register with a single VAT authority in the country of their choice. Companies may have to charge different rates of VAT according to where their customers are based, but VAT reports and returns are submitted to just one authority. The VAT authority responsible for providing the single point of registration service is then responsible for reallocating the collected revenue among other EU VAT authorities. Additional information on this process is available at https://ec.europa.eu/taxation_customs/business/vat_en.
Local eCommerce Business Service Provider Ecosystem
Slovenia’s telecommunications infrastructure is well developed, and broadband internet is readily available at a reasonable price. ECommerce market revenue is expected to be approximately EUR 383 million in 2021 (USD 460 million), with an annual growth rate of almost 50 percent, well above the previous 8 percent growth, mainly pandemic caused. The largest eCommerce market is in electronics and media, with an expected 2021 sales volume of EUR 187 million (USD 224 million). The average revenue per user is currently approximately EUR 312 (USD 374).
Domestic eCommerce is expanding rapidly in Slovenia due to lower prices and an increasing variety of products. Online purchases within the EU are not subject to customs duties. Despite global competition, more than half of Slovenian online buyers (54 percent) shop only at domestic online stores. Popular Slovenian eCommerce sites include: www.ceneje.si, www.mimovrste.si, www.nakupovanje.net, www.enaa.com, www.mercator.si, and www.trgovine.net. Cross-border eCommerce is growing as more Slovenians purchase goods and services online from other EU countries and the United States. Slovenian consumers use all major international eCommerce sites, including www.amazon.com, although many Slovenians choose to purchase online from EU-based websites of popular American online companies such as Amazon Germany to avoid duties. The most common items purchased online include electronic goods, fashion products, housing equipment, books, medicines, health supplements, travel bookings, and airline tickets.
Business-to-business (B2B) eCommerce is still in its infancy in Slovenia, as many companies continue to rely on more established systems with relatively outdated processes and limited sales channels. Slovenia’s automobile industry, with significant sales to Germany, France, and Italy, is in the process of expanding its B2B commerce infrastructure.
Online payments are generally handled through international credit cards such as MasterCard, VISA, or Diners Club, although Pay Pal is also growing in importance. Moneta, a Slovenian secure payment provider, is often used for payments relating to domestic purchases.
Approximately 72 percent of Slovenians used some form of social media in 2021. Facebook and Twitter are the most popular social media sites, but there are several Slovenian sites targeted toward younger users (16-24). Online networks are used primarily for instant messages, chats, forums, and blogs.